Family Office Association- Kansas City – Why I Invest in Digital Media
Throughout my life, I’ve been fortunate enough to embark on adventures, from being a Venture Principal at Capital Express to hosting MoneyHunt on PBS before Shark Tank became a phenomenon. I’ve led 1,500 kayakers across 14 miles of open sea and trekked 1,100 miles of deserts in the Middle East. I started the first tech incubator in Havana. I also had two kids at 50.
But thing I am most proud (ex the kids) of is that I helped create 1,100 jobs from scratch, mostly in Digital Media.
Digital media encompasses various platforms, including publishing or user-generated content, mobile apps, podcasts, music, websites and blogs, digital photos and movies, media and advertising infrastructure, online display advertising, video and streaming software, ad servers, networks, programmatic ad platforms, social media, and vertical social networks with defined niches.
What makes digital media attractive to me is its ability to redefine media, without killing it. It requires very little capital to start, and running costs can be kept super low. Buyers are cash-rich and competitive, and exits are disproportionately huge. So you’d think everyone would be doing it, right?
Well, it’s sometimes hard to do.
To ensure that I’m investing in the right companies, I use a process and filter that includes having a mobile and data USP, improving existing user behavior, aiding chronic pain with tech. In the five ears before covid, my funnel saw 5,214 deals, engaged 240 companies, offered terms to 18, activated 15, and angel-funded 12. We then raised PE/VC for five, and exited three to date. My performance resulted in a 31.9% CAGR for the five year period pre-covid.
So, perhaps, we have a habit of offering fair deals.
My theses that ran these filters have always been to mitigate risk, maintain a nimble capital base, keep optionality, have a low entry cost, be influential, and avoid the dreaded time suck. Of course, not every venture I invested in was a winner, but we always process losers and learn from them. For example, a nice-to-have product in a nascent industry or a very early solution in a nascent market may not be the best investment are great 20/20 hindsight, but should not be a recurring theme!
And one more thing about the 1,100 jobs… what I value most in my investments is the people. Win or lose, great people carry over. More than 30 people have worked with me twice or more.