1Mby1M Virtual Accelerator Investor Forum: With Ray Chan of K5 Ventures (Part 2)

Sramana Mitra: You said you have a very big geographical focus? How do you define that geography? How do you constrain that geography?

Ray Chan: We do touch on some investments in Canada. We have maybe 10% of our investment outside of California all the way to Midwest or East Coast. Most of our investments are focused within California. We invest very much into Northern California and Southern California companies.

Sramana Mitra: Could you talk a little bit about some of the highlights of your portfolio? Give us a sense of when you encountered this company, what did they have by way of proof points? Why did you choose to go into these companies?

Ray Chan: For example, we have one company in Vancouver. It’s in the University of British Columbia. This company produced micro needles for medical devices companies to access ISF fluid through the skin. It is minimally invasive. The reason why we like this company is because of the knowledge of this team. Also, they’re able to get some endorsements from different companies in terms of agreements they were able to get.

The other company is in the Midwest. It’s in a totally different space. It’s called WeGoLook. They help companies or individuals to deploy people to go and look at and evaluate different things. Maybe they want to buy a car or house. Maybe they don’t want to spend the time to fly over the country to take pictures. They will deploy local people.

We found this company through one of the investing panels. This company actually had a lot of traction. They have deployed a lot of people to take pictures and have very good results. To us, it’s no brainer. This company was eventually bought by an insurance company. Insurance companies also want to have people to go to places and assess different things. Sometimes, we get invited to different speaking panels.

Sramana Mitra: What is your assumption on how much money it would take to build these companies, especially when you’re talking about medical device companies? You’re putting in the first couple of $100,000 checks. How much money do you expect these companies to raise? Are you expecting them to get bought by a larger company relatively early to get the full distribution benefit?

Ray Chan: That’s a very good question. It depends on one thing: the trigger point or milestone, and the value that the money will create. Whether this value is enough to increase the value of the company. For example, in a medical device company. We make an assessment of the value and we determine how many times return do we get. In case of consumer products, we look at the milestone of what they can accomplish, how long it will take, and if it is reasonable. Then, we make the decision to write the check. It all depends on milestone accomplishment and the value they can create from the investment that we put in.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ray Chan of K5 Ventures
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