Issue link: https://tmcpulse.uberflip.com/i/532968
t m c » p u l s e | j u ly 2 0 1 5 28 t m c » p u l s e | j u ly 2 0 1 5 28 Q | If you broke up the companies by industry, what are your largest areas of engagement? Is it largely energy? Is it energy and health? A | So, we have always been very strong in energy. Surge was actually an initiative that came out of HAN members and HAN invested around 70 percent of Surge 1 and 2. We have been mentoring most of the companies in these first stages of Surge, so we have invested a lot in the Surge fund, and also in follow-on investments in specific Surge companies. That was a pretty obvious fit for us because many of the people were having some connection to the energy industry. Then, there seems to be a legacy in consumer goods, mainly food and beverage deals. And I think that's because of the Sweet Leaf Tea deal that got a very good exit. So that created a sort of Sweet Leaf Tea effect where they kept on investing in the spin-offs of the Sweet Leaf Tea. And that's something that I think is also pretty attractive for new members because it's something that is easy to understand. We also invest a lot in IT and life sciences. The year that I came in, one of the initiatives that was pretty strategic to us was also to create sub-inter- est groups. So the sub-interest groups would help us to do the due diligence and do the vetting. It would be a sort of investment committee. But more importantly, it would be an educational tool for members who wanted to know more about those sectors. So we found out we had a lot of energy people who were interested in the life sciences deals, but of course they wouldn't dare invest in those deals. With these sub-interest group meetings and the fact that some of them were about trends and training people on what were the hot places to invest in the life sciences as an Angel, many of them became more comfortable with investing in life sci- ences, and that has been instrumental for HAN. And we are aiming to have a third of our portfolio in life sci- ences. Three years ago we were nowhere near that, and now today we had our agenda planning session where we select the deals for the pitching session in two weeks and I would say 70 percent of the deals we saw were health related—either health IT or life sciences. So that was awesome. For the life sciences and the energy, we were get- ting so much traction in terms of deals that we decided to split them and we had oil and gas and energy tech, so we have a chair of energy tech, which is taking care of the group and of the deals. And the same thing hap- pened with the life sciences. Now we have health IT chair, because it's very different from the rest. So that means that we have further divided. In terms of IT, by itself, we were investing in a lot of B2B players, but we wanted to diversify, and do a little bit of B2C. We were reaching out to Austin and California to get those kinds of deals. So we have been co-investing a lot with different Angels to try to get those deals. And now we have a committee in place and the co-chairs are very versed in B2C deals, and all of that, so we are getting better deal flow. Q | It seems there are a lot of exciting things happen- ing in this city right now, and I'm sure you see a lot of them in your role. The Texas Medical Center, for one, is investing heavily in innovation... A | I have to say that I have been so lucky in terms of timing, because all of these things have been put together in the last three years, and that's when I came in, so we could engage since the very beginning with these amazing accelerators and programs put together and that are really developing the ecosystem. Again, now we are a lot about collaborating and creating a stronger ecosystem, so we really want to have HAN members involved from the inception, as mentors, but also as presenters, doing the accelerator programs, being able to coach, being there for demo day, and giving a lot of feedback. Instead of having to fish for deals, whenever a demo day is put together, we have amazing deal flow quality that has already been pre-filtered and comes to you. It has nothing to do with the way it was before. Q | What do you see for the future for HAN? A | The future for HAN, for sure, there are a few things that I think are going to be important for us. First, consolidating our number one position as an Angel Network in the U.S., then our relationship with the Texas Halo Fund, our sidecar fund. THF 1 is closing, so they are doing the last deals and follow up invest- ments. We want to put together a THF 2, and we really believe that we want to improve some of the processes, and also the relationship between HAN and THF, to make it more like a hybrid than it is now. We have realized a few things with THF 1, and one of them is that although THF 1 had been designed to follow HAN, it was more the other way around. HAN members are very interested in what THF has to say about a deal. They ask, 'Would you follow me if I invested?' So that's very important. At the end of the day, what's really happening is that THF is very heav- ily signaling the deals, and HAN is following Halo, and I think we want to make that change effective for THF 2. And another thing that we want to do is make it a slightly bigger fund. Our main investors for THF 1 were Angels, not only from HAN, but also from the Alliance of Texas Angel Networks that we created. I think this time, we want to be able to reach out to private equity, not only because we want them as investors, but also we want to have a clear exit strategy from the beginning, so those people know what our investments are and see a clear path to exit. For the full interview, visit TMCNews.org