Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate (Part 4)

By guest authors Irina Patterson and Candice Arnold

Irina: What is your current source of deal flow?

Mike: That’s a good question. There are quite a few, actually. Some of it just comes in naturally from business plans at Floodgate.com. We probably get about one hundred plans a week from that channel.

Then we get a lot of referrals. Some referrals come from other angels, other venture firms. Increasingly, a lot of the referrals come from entrepreneurs in our network. So, for example, ngmoco, which is a gaming company on the iPhone, we found out about that company from Kevin Rose, who’s the founder of Digg.

One day I was visiting the Twitter guys and I get this call from Kevin and he says, Hey, you’ve got to stop whatever you’re doing and go see this company because it’s going to be awesome. A lot of the companies that we end up funding come from some type of advantage that we get from working with the current companies.

And then some of the deal flow is outbound. We’ll decide that we’re interested in a certain area. For example, last year my partner Ann became interested in social commerce. So, what we’ll do is we’ll say, Okay, let’s go meet the 100 smartest people in social commerce, spend time with them and try to understand what’s really happening and what the opportunities are.

One of the things that I find interesting – and this may be a more general statement – I don’t even think in terms of deal flow anymore. I think in terms of – I like to call it – people flow. I just take a leap of faith that if I spend my time with really good people, that the deals will reveal themselves.

You’re sort of taking this leap of faith that the dots will always connect if you do that. I don’t find a deal by looking for deals. I find a deal by having lunch with somebody really smart and we just start talking back and forth about a topic that we’re interested in and he and she will say, You know, by the way, I know so-and-so is starting a company that’s doing that and he’s really smart. You should go talk to him.

Irina: You think if you just surround yourself with really smart and innovative people that the deal flow will take care of itself?

Mike: That’s sort of how I look at it. The tech business is a business of exceptionalism, and exceptional outcomes are driven by exceptional people. So, if we can spend the greatest fraction of our time with exceptional people, our probabilities of getting lucky in unanticipated ways go way up.

Irina: Can technology help you sort through your deal flow, or do you think technology is inferior to the strategy you just outlined?

Mike: It’s tough. Some of the people whom I work with in the business have some pretty good technology approaches. They put all their deals in Salesforce.com and they track a bunch of things and people.

We don’t do much of that. We leverage technology for keeping track of really great people. For example, Ann teaches at Stanford and she has what we call the Ninja Assassins database. It’s a database of very high potential computer science students.

We try to track those people even after they leave Stanford. But we also track those people to see if we can help them get summer jobs or just be involved in some way in both learning from entrepreneurship and also creating value in the companies that we’re involved with. So, we’ll use technology for things like that.

This segment is part 4 in the series : Seed Capital From Angel Investors: Mike Maples, Founder And Managing Partner, Floodgate
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