1Mby1M Virtual Accelerator Investor Forum: With Ray Chan of K5 Ventures (Part 3)

Sramana Mitra: How many companies have you invested in so far?

Ray Chan: Over the last seven years, we have invested in over a hundred companies. Of course, a lot of them disappeared. Some of them are still going on.

Sramana Mitra: Where I’m going with the question is what have you learned from investing in these hundred companies? How long does it take to get to FDA and get to a milestone where you can exit? How many of these hundred have you gone through with that cycle?

Ray Chan: Usually, the milestone cannot go beyond a year or a year and a half. The money we invest is not a lot. We don’t usually look beyond a year and a half. Most of the companies we know, they fail or need more money. We can learn very fast whether this company is worth a second round or a follow-on investment.

Sramana Mitra: What trends are you seeing in your portfolio right now? Who’s doing what? What are the themes that are emerging in your deal flow? If you look at the last 12 months deal flow, what’s interesting?

Ray Chan: For some reason, we’ve been getting a lot of health-related companies whether it’s digital health or medical device. For some reason, we see a lot of them coming into our network. Southern California and San Diego are concentrated with a lot of healthcare-related companies.

In the tech area, we have a lot of people in machine learning and natural language processing. Sometimes, if you look under the layer, substance is not there. That type of technology is the talk of the town. As I mentioned to you, the AI area is huge. A lot of AI companies are concentrated in the Bay Area. In terms of funding, they are pretty much covered by a lot of investors in the Bay Area.

Sramana Mitra: In medical devices or digital health, what are the themes?

Ray Chan: Monitoring. I love monitoring companies. The trend is to monitor health. For example, sleep. A lot of people are getting into improving people’s sleep. There’s this company called Sleep Watch. It helps people sleep longer and track their sleeping patterns.

Sramana Mitra: Monitoring is very big right now.

Ray Chan: Yes. Disease management is also very huge. We are able to tap into the platform to get data that we need to understand the body much better. From there, we are able to understand what is the right exercise and how much time we need on sleep.

Sramana Mitra: It was a very helpful overview of the direction your funds are taking. Thank you for your time. 

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ray Chan of K5 Ventures
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