Seattle angel investor and venture capitalist Bill Bryant has been around the block a few times in the tech industry, estimating that he’s met some 5,000 entrepreneurs in the past 25 years.
So what does Bryant — an investor in companies such as Isilon Systems, Swype and Z2Live and an early employee at startup companies such as Visio, Qpass and Netbot — look for in the entrepreneurs he backs?
That was one of the topics Bryant addressed Monday night at a Seattle angel investor and entrepreneurial meetup in Seattle.
As you might imagine, it is more art than science trying to pick the winners from the losers. Bryant admits that angels must be prepared to lose all of their money, noting that the exit environment is especially challenging right now given how long it takes (an average of nine years) for companies to reach a sale or public offering.
“I’ve met, I am sure, like 5,000 entrepreneurs over the last 25 years, and have been pitched like 2,500 times. And what that has given me is a calibration around entrepreneurial archetypes that I’ve observed that tend to be more successful than others. There is a viewpoint that entrepreneurs are risk takers, for example. I don’t believe that. I believe that entrepreneurs are calculated risk takers. They assess and understand risk, and capture those risks….
So, I find entrepreneurs who are pragmatic and grounded and are not giving me crazy ideas about the size of market or things like that. They definitely are inspirational, because entrepreneurs need to be able to sell to team members and partners and customers and investors, and so there is a Galvanic aspect to it. They are visionary for sure, but grounded at the same time. And I know that is sort of dichotomous.”
Bryant continued after sharing a story of Isilon co-founder Sujal Patel, who he said exhibited many of the traits he looks for in an entrepreneur.
“It is just an assessment of individuals that I think are more likely than not to be able to succeed,” he said.
Later in the program, Bryant was asked about what makes a good entrepreneurial pitch.
“I really want to understand what an entrepreneur’s motivation is and their passion around this idea that they are working on, because again it is a long-term deal for them. And I want to understand why why this idea, versus any other thing that they could be doing with their lives. And (I) listen for something that is a just bit orthogonal to conventional wisdom….
When I talk with entrepreneurs, I use the phrase permission to believe. You have got to give an investor permission to believe because on the face of it we could all sit there and dissect the business and talk about a million reasons why they are going to fail. It is just so easy to tick through the list of things, so you’ve got to suspend disbelief to invest fairly early. And so that is what I am trying to hear.”
In a lighthearted moment, Bryant also shared some of the angel investments he wished he’d jumped on. One was Cheezburger Network — the massive online comedy network led by Ben Huh — and the other was Twilio — the cloud communications startup led by former Amazon.com manager Jeff Lawson.
Bryant, who tends to invest more in enterprise businesses, said he just couldn’t get his mind “wrapped around” the idea of Cheezburger. “I was like, seriously,” said Bryant, adding that fellow angel investor Geoff Entress unsuccessfully tried to convince him to invest.
In terms of Twilio, Bryant said he should have picked up on the vision behind Lawson’s idea, but at the end of the day just missed it.
All things considered, Bryant said the climate is so much better for entrepreneurial projects in Seattle these days than when he started in the business 25 years ago and there were only a handful of angels, just three venture capital firms and no support services like law firms and recruiters.
“It is infinitely easier, orders of magnitude, exponentially easier to get companies going today,” he said.