1Mby1M Virtual Accelerator Investor Forum: With Dennis Joyce of Alliance of Angels (Part 3)

Sramana Mitra: What did BevyUp do?

Dennis Joyce: It allowed the sales representative from a place like Nordstrom to work with their customers in a shared shopping cart capacity. It was a co-shopping platform.

Sramana Mitra: When it came to you, what did they have?

Dennis Joyce: They had a very simple software platform and a vision for co-shopping.

Sramana Mitra: Did they have customers?

Dennis Joyce: They did have a pilot in place with a jewelry company. It was an early market validation of the product. They were able to nail Nordstrom and a few other smaller e-commerce plays. When they came to me, I thought they were very early. They were bootstrapped. They were just a very competent and focused team.

With the exception of Amazon, they had a whole frontier of potential customers. The team was able to execute. They were able to be very lean. They didn’t raise a lot of money. When they were able to find an acquisition that provided investors with an exit, they took it. That was a very intelligent move for the leadership because it gave us our investment back in a reasonable time frame. We were very happy with the team.

Sramana Mitra: What was the entire lifecycle of this company? From the time it started to the acquisition, how many years was it?

Dennis Joyce: I think it was about four years. It was incorporated in 2013. It was one of my first angel investments in the space.

Sramana Mitra: What was the total amount of capital that the company raised?

Dennis Joyce: I think they raised under $5 million.

Sramana Mitra: This is actually an interesting segue into a trend question that I wanted to ask you. We are in 2018. Lots of stuff have already been built. Nowadays, there aren’t as many wide, open opportunities out there to build these billion-dollar companies. 

Compared to the amount of capital and the number of investors who are chasing those opportunities, we’re not going to have 600 of those opportunities. There’s going to be a limited number of those opportunities but there are many niche opportunities. Some of these businesses need to be built for small amounts of capital – under $5 million of capital and sold for a reasonable exit.

Most of the exits that happen in the industry are under $50 million price deals. If you build a company for under $5 million and sell a company for under $50 million, that is still a very reasonable investment with good ROI. Those are healthy deals. It sounds like that is something that you are interested in. Is that true about you personally or is it true about the entire Alliance?

Dennis Joyce: It’s good to get some of those results in. In the case of a software platform selling into the enterprise, if you find out that there’s a long sales cycle and if you feel like the acquirers are really trying to drive down the valuation when they want to acquire you, it’s important to take your shot. If that looks like that this is your perfect opportunity, you can take that. As an investor, there are so many opportunities out there. We’ve seen a full marketplace in certain areas of tech.

However, I do not think we are even at the earliest phases of what we need to do as a society in order to grow. Some of the companies that I’m looking at are in robotics software technology and using robots to do very difficult and dangerous jobs. In areas that are very labor-intensive, you want to think about where we will be in 40 years when we’re using AI and robotics technology to do difficult, dangerous, and hard-to-do jobs. Those are some areas where we’re way behind in development.

In mechanization in the United States, we have fallen behind. Everything is now being built in China. I have a company that is building out a factory. It’s very time consuming because we’ve almost lost that art. We have a lot of work to do. I don’t think that we are filled up under any circumstances. I’m just sitting there sometimes going, “We are late for what we need as a society to move forward.” I think that there’s a whole segment of society to move forward. We have to keep on going and going.

There’s a whole segment of society whose voice is not heard at all. Those would be minority businesses and women-led businesses. We haven’t given a voice to these people at all. Thereres very few founders of minority descent. I’m very passionate about inclusion and really listening to entrepreneurs and innovators of minority groups. We’re not even close to having a balanced ecosystem in tech.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Dennis Joyce of Alliance of Angels
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