Introducing Angel Interviews, a series dedicated to debunking the assumption that entrepreneurs need to look outside of Philadelphia for angel and early stage investment. Every so often we’ll interview a local angel and ask him or her about investment criteria and how to get in contact. If you’re an angel investor that deals primarily with technology companies or you have any suggestions about how we can improve this series drop us a line.
When Technically Philly asked Farid Naib about the state of early stage investing in Philly, he doesn’t even hesitate to display his enthusiasm.
“Philadelphia absolutely has a good early stage program with all of the angels and early stage VCs out there,” says Naib.
And he would know. The founder of Document Depository Cooperation has a long history of success both founding and investing in local technology companies such as Gain Capital and FNX Solutions. However, Naib asserts that Philadelphia does have one issue that needs resolving: entrepreneurs need a better method to connect to local angels.
We spoke with Naib, who has a long investing portfolio that ranges from a coconut water company to an “as seen on TV” company and about angel investing in Philadelphia and beyond.
We’ve heard local entrepreneurs say there are not enough investors in Philadelphia. Investors say there are not enough entrepreneurs. Where do you fall on that spectrum, being both?
Why do you think that perception circulates?
There are enough opportunities that capital is relatively picky. They can be afraid to go into the better opportunities, as it were. A lot of the startups are fairly -I hate to use the work “naive” – but inexperienced for what they need.
You are implying that it is an education problem?
There’s a great shortage of financial guy to come in and explain these things. You know, in case of an exit what will happen? The entrepreneurs need to be a little knowledgeable. The VCs are all reputable, but people often don’t understand the terms. There needs to almost be a “Startup for Dummies.”
How long have you been actively investing?
I did my first angel investment in 1985. I got more serious probably around 1999. That’s when I did my first good one [laughs].
Why did you get involved?
I’ve been relatively successful in my startup career and it’s a way to give back. I’m much more of an investor in the team than the idea. The few times I’ve invested in the idea, I’ve lost out. My best investment was probably Gain Capital which just went public this year.
What do you look for an investment
Management team first, idea second.
Any specific industry?
I’m very diverse, I have investment in companies like Vita Coco I have another in a company that services WaWa’s refrigerators. Though I mostly invest in technology, that’s where I bring the most to the table. Especially financial services and risk management, that is kind of the sweet spot for me.
Are you open to people approaching you and pitching you?
Companies approach me all the time. For example a company called PayDivvy approached me and I put some cash in. The best way to approach me is to send me an email with a business plan and I’ll respond. I don’t write business plans for people. I’ve been an entrepreneur in residence at Wharton so I know it can vary.