1Mby1M Virtual Accelerator Investor Forum: With Frank Malek of Impacteo (Part 2)

Sramana Mitra: Let’s say we send you a company. You will figure out from your network who is the likely investor that you want to do the deal with and have them price the deal and lead the deal. Is that what you’re saying?

Frank Malek: Yes, we prefer that. That’s right.

Sramana Mitra: You said you invest all over Europe and North America.

Frank Malek: That’s true. Recently, we made two investments in Europe. There’s one in South America. We’re doing one here in the Bay Area where we’re doing our due diligence. At some point, you’ll probably ask me about why are we investing outside of the Valley. A big part of that is, if you talk to other angel investors, you’ll see that there’re probably more dollars going to fewer deals. The bar is much higher for seed companies than ever before. The seed deals look like A’s. The valuations that we’re seeing are too frothy in the Valley and in the US.

Sramana Mitra: In the mainstream deals, you’re absolutely right. There are still lots of stuff going on outside of the mainstream unicorn-chasing business.

For example, if you’re willing to do smaller investments with early exit strategy, then there’s a whole pool of companies out there that the unicorn-chasers are not going to touch. That’s a market where we are seeing investors position themselves. Is that something that you do?

Frank Malek: We’re interested in smaller deals but we’re not interested in lifestyle businesses. We are investing to get exits.

Sramana Mitra: Smaller deals doesn’t mean lifestyle, right? Smaller deals mean lower TAM. If you don’t have a billion-dollar TAM, the unicorn-chasers are not going to touch you but the corporate acquirers will.

Frank Malek: Absolutely. We are not looking for home runs although we’ve had lots of unicorns and an IPO recently. We’re really happy about that. We’re not looking for those. We’re quite happy with a lot of singles, doubles, and triples if I may use baseball terminologies. It’s unrealistic to base your fund on those unicorns. We don’t have a big fund. From an economic perspective, we don’t have to bring unicorns to make sense.

Sramana Mitra: How big is your fund?

Frank Malek: It’s less than $50 million. We invest quite carefully and really try to work with teams that we’ve invested in before. In Europe, one thing that we found out is, there’s quite a bit of talent here. There’re a lot of great ideas. The mindset may be a little bit different. There’s just a great amount of opportunity and talent that we’re seeing in other markets. Our fund is about $40 million. It’s our first fund. We are hoping to be able to close a follow-up fund later this year.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Frank Malek of Impacteo
1 2 3