1Mby1M Virtual Accelerator Investor Forum: With Jason Cahill of McCune Capital (Part 2)

Sramana Mitra: What about types of companies? What in the segments do you like to invest in? B2B? B2C?

Jason Cahill: We invest in new technologies in older industries. So the flavor on that would be advanced data technologies like artificial intelligence, machine learning, and robotics. There are new type of opportunities in energy, agriculture, transportation, and supply chain.

Those are older industries. If you go into a truck depot in Iowa, you’re more likely to see a grease pencil on a glass board than an iPad tracking chip. We invested in a machine learning trucking company where they have a 25-year dataset looking at everything related to risks of an 18-wheel truck. By building this machine learning process, they were able to reduce the risk for their customers.

They can say, “Hey, I can send Tom, Sally, and Jane on this route from Pittsburg to Omaha.” That’s based on traffic, weather, type of truck traveled, and a lot of other variables, and to be able to say, “How do I reduce my risk the greatest because Jane gets tired after 4 PM.” So that marriage of old industry and new tech is where we really like to play.

Sramana Mitra: Great. What about geographies that are in New York? You’re obviously seeing startups from the New York tri-state area. Is that your catch land or do you have a broader footprint in terms of deal flow?

Jason Cahill: Based on industries, there’s not a lot of agriculture happening in Manhattan. We have a bounded geography. If you watch Boston to the north, DC to the south, Pittsburg to the west, we think of that as our triangle. I look at the three C’s of a successful venture as code, capital, and customers.

With Pittsburg and Boston, I have MIT. Secondly, most of the Fortune 500 is either headquartered or has a presence in New York. Then capital, for sure, is in New York. We have to invest in Austin. It also comes down to coming in early and taking 10% of the company. Maybe I want to be on the Board. Then I want to be a little closer.

If it’s going to be a silly hidden deal where we’re taking a lesser percentage and I have faith and trust in the Board partners, then I’m okay with it being a little bit farther away. But, we’ll probably end up with 75% of the funds in the geography.

Sramana Mitra: If you look at your deal flow for the last 12 to 18 months, what trends are you seeing?

Jason Cahill: I have seen a ton of a Blockchain. I tend to stay away from industries that are highly regulated. They’re very speculative. There are two topics I’ve seen that I find interesting. One is wastes – converting some type of a waste chain into a body chain. That is re-purposing, reducing, and recycling.

There have been a number of technologies that expand in that space. The next would be distributive energy. Politics is always in the background of things like energy. The beauty of alternative energies is, they’re not cost competitive where policy and politics don’t really matter. You can talk to both sides of the playfield and say “Look we’re going to make money and not squabble on policy. I think that’s the trend that I would like to see really play out – everything from sourcing and regeneration to targeting who in the market should be the best production and distribution value chain.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Jason Cahill of McCune Capital
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