An investment made today can lead to business and product growth tomorrow. So it makes sense that investment puts a focus on the future. It’s a big reason why David Hall got involved in venture capital and joined D.C.-based Revolution.
“What I love doing and what I love most about the job is being future oriented and investing in and talking with entrepreneurs that are trying to shape the future,” he said.
Hall, who received his MBA at Harvard Business School, is managing partner of Revolution’s Rise of the Rest Seed Fund. Like the bus tour of the same name, it focuses on startups outside the largest tech hubs. It has also invested in multiple D.C.-based companies.
Technical.ly CEO Christopher Wink recently interviewed Hall for an episode of our “Off the Sidelines” podcast. In this recently wrapped podcast series — presented thanks to support from, full disclosure, UBS’ Project Entrepreneur — Technical.ly spoke to notable figures in the investing world about getting started with angel investing.
In honor of the inaugural 10-episode season’s completion, we rounded up thoughts from Hall that we thought would be useful to others looking to get started. Here are a handful of lessons from the interview:
There’s opportunity beyond San Francisco and New York.
Statistics show that 70% of venture capital goes to just three cities — New York, San Francisco and Boston. Rise of the Rest Seed Fund, on the other hand, looks at areas outside of those three locales.
“If we move and create a thousand jobs in cities like Des Moines, Nashville, Omaha, New Orleans, that’s a meaningful impact on that community for the ability of those new jobs to pay for new schools, new roads and reinvigorate these cities that we call rising markets and does help drive the next wave of the American economy,” Hall told Wink.
For Revolution, it’s not an act of charity, but rather an investment thesis. Hall pointed out that many top engineering schools and Fortune 500 companies are located outside of those three metros, as well. Tapping into the talent that’s there, he said, can build communities as well as companies.
“I think we’re helping to create these ecosystems that are perfect crucibles to spin off the next generation of great companies,” he said.
“Play at your level.”
Hall likens getting involved with angel investing to basketball.
“Everybody thinks they can play basketball. When you go out and play against the pros, there is a real skills gap where it really matters,” he said.
Likewise, there are different levels of investors, from institutional firms like Revolution to folks who earned money in another field and are looking to get started. But no matter their experience, investors can still play at their own levels, and be successful. It’s a matter of finding what that level is.
“You really want to play at your level, so that you can maximize the benefit of your investment,” he said, “either for being able to learn more about an industry, being able to have a little fun or being able to seek return.”
Invest in what you believe in.
Technology can apply across many different industries, which means there could be lots of ways to shape the future.
“Follow your passion, follow your interest and then look to make those types of investments,” he said.
When making an investment decision, looking at well-built and well-designed technology matters. But to achieve scale, Hall has observed another factor in getting a product to market: “It’s all about timing, and sometimes the idea can be too far ahead of the time.”
So how does one get the timing right? Leaders can have a big influence, he said.
“The magic happens when really good ideas meet with leaders who help time the market who also help execute the market,” he said. “But also the market itself has a time and a maturity process.”
Consider an entrepreneur’s passion.
What is an entrepreneur’s motivation? That’s an important question for Hall as he considers how a business will grow. While profit motive is necessarily involved, it goes beyond that.
“Entrepreneurship is a series of peaks and valleys for a company to go from an idea on a napkin to an IPO, it has has to to have gone through several iterations of why are we doing what we are doing, and which direction are we headed,” he said. “If the only motivation for the entrepreneur is to make millions of dollars, that is going to be a hard mission to sustain through the dark nights,” he said.
For the company itself, having a mission that aims to achieve impact can act as a “true north” for the company through all of the individual choices they make along the way.
“It becomes a sustaining vehicle that helps both guide decision making, but also orient the company towards the right trajectory,” he said.-30-