It's been 5 and a half years since I made my first angel investment. SHIFT was my first investment, and after being acquired by Brand Networks for $50M, they are also my first exit. I figured it would be a good time to write down why I invested and what I learned.
When I was living in LA, I knew Clark Landry from his experience at Adconion, Traffic Marketplace, iWin, Top Level Domains, etc. He was a proven guy from the Web 1.0 era and college buddies with Bong Koh. When Bong told me Clark was working on a new idea, I knew I wanted to meet.
In January 2010 Clark and James Borrow (described to me as “a young guy with a cool trick”) walked into my office in full black suits. Clark is older than I am, but he looks really young, and James was ~22. James is from Chicago, so maybe he was channelling his inner Tom Hanks from Big. Anyway, they looked like they were headed to a Jr. Prom and I almost fell out of my chair laughing. I was a very junior punk kid at Redpoint back then and they didn't need to dress up to impress me. Clark was smooth. James was a little green, but he knew his stuff.
The new Facebook ads platform was a bit like the wild west. It looked promising but nobody knew if it was a place to build a legitimate business. James (who had interned for Clark) had come up with a way to buy fans on Facebook for 50 cents and sell them for 2 bucks. The pitch was that Clark was going to give him some guidance, help him raise ~$200k, find some customers to run a few tests, and they'd figure out if this was a real opportunity in 6 months. I knew that advertising on Facebook was going to be big. Bong gave Clark an amazing reference and you could sense he would find a big opportunity. The price of the round was incredibly reasonable when you look at today's "seed" market, so I made a small personal investment. A few months later, the early tests were working, they raised a proper round from VCs, and moved from testing mode to building a real business.
Since then, they've changed names twice and have gone on to build an amazing Social Ads Platform. By bringing social data, advertising, and marketing teams together, the SHIFT platform has become the leading cross-network social advertising platform for brands and agencies. They are the only company to date to be included in every social advertising API launch program (FB, Twitter, Linkedin, Fb Atlas). They've built a great business by helping brands like Ford, Amex, Verizon, etc., successfully perform cross platform marketing, and they'll be a great addition to Brand Networks.
What have I gotten out of it?
Most importantly, a couple of great friends. Clark has become one of the best angel investors in LA and we've been lucky enough to share a bunch of deals. I always knew betting on Clark was a good idea. He'd done it before and had a great reputation. On the other hand, I had no idea how James was going to perform. Turns out, he wasn't a one trick pony. I've really enjoyed watching him grow as a CEO, build a great team, and turn into an industry thought leader. In the end, investing in startups is always about finding the right people. From a product/market standpoint, this investment was super early/risky, but James and Clark are a couple of the best entrepreneurs I've backed, and they've produced a great win for me as an investor.
Peter Thiel might tell you not to invest in guys in suits, but these two worked their butts off and proved him wrong. Thanks guys!