5 Things I Need To See Before I Consider Making an Angel Investment

The original version of this article by Brad Micklin and Yitzi Weiner appeared on HuffingtonPost.com

Huffington Post recently had the pleasure of interviewing Chris Cunningham. Chris is the Chief Revenue Officer at Unacast, the world’s largest network of beacon and proximity data, connecting the physical world to the digital for online retargeting and attribution. Chris is an active tech start up investor and founder of C2 Ventures, a privately-held investment firm with a focus on consumer, data and financial techs that provides seed capital to early stage digital media companies. Chris has been named one of the “Most Important People in Mobile Advertising” by Business Insider, as well as being an Ernst & Young Entrepreneur of the Year Finalist 2 years in a row. He’s been a featured speaker at International CES, Cannes Lions, IAB’s Annual Leadership Meeting, dmexco, and f.ounders. He is a contributor to CNBC and Bloomberg TV via on-screen appearances, and is former co-chair of the IAB Social Media committee and Native Advertising Task Force.

Yitzi: It is a pleasure having you with us, Chris. What is your “backstory”?

Chris: Serial entrepreneur from the tech and advertising world who has experienced all facets of building companies that scale, introducing new products into market and team building. Pioneered ad products centered around widgets, apps, and location data. Took those experiences and started C2 Ventures understanding first time founders need real time in the trenches support of their business. The core goal of C2V is close the gap between founders and VC’s to avoid classic start up mistakes.

Yitzi: Can you share a story of your most successful Angel or VC funding? What was its lesson?

Chris: I was the first investor and only advisor into Arbor.io a data company driving net new revenue for apps and publishers leveraging used data assets. I worked very closely with the founders for more than a year leveraging my network to fast track their commercial efforts. Arbor sold for over $150MM to Acxiom two years later bringing a 30+X return to shareholders. I learned that there is no match for the power of top tech and the teams that support it. Arbor had a world class CTO out of Google and supporting team that build products and pipes which drove huge value in the publisher ecosystem.

Yitzi: Can you share a story of an Angel or VC funding failure of yours? What was its lesson?

Chris: After having three exits in my first two years I had my first failure. Unlike the other 12+ companies I invested in in which I was in constant communication with the CEO had constant communication and the CEO wanted advice and support I invested in a founder who did just the opposite. Did not share with me or other investors, tried to do everything himself and when it came down to raising more money he made the classic mistake of only having one option on the table vs multiple and that crushed us in the end as the potential investor pulled-out and now they are on life support.

Yitzi: Which person or which company do you most admire and why?

Chris: Elon Musk. Yes he is an obvious choice as far as star power but he is solving two very complex problems at the same time in auto and space. I appreciate the fact he does this in parallel and blows up the perception that people can only do one thing well. Founders invest, investors start companies, people advise the more you see and do the better you become and Elon is the rule. I also love that he is always first to make the right call with his customers when things go off the rails like offering extended power for tesla owners post the hurricane.

Yitzi: How have you used your success to bring goodness to the world?

Chris: I love this question and in short C2 Ventures along with Unacast have been the best things that have happened to me career-wise as I’m allowed and asked to give back. I’ve been told countless times by start-ups I invest in, advise or just friends with I had a positive impact on their business and there is no better feeling.

As you get older I think it’s your responsibility to give back to the ecosystem that gave you an opportunity and to the next crop of founders who can avoid classic pitfalls if you just spend the time with them, listen, ask questions and truly invest in their success.

I give time to anyone that wants it no matter where I met them in my personal or professional life. People go through ups-and-downs and that’s life, but supporting one’s low is a gift.

Yitzi: What are your “5 things I need to see before making a VC investment” and why?

Chris: The C2 Ventures formula is as follows:

  1. Does it hit my thesis which is mobile first: Consumer Tech or Data. You can’t invest unless you have a thesis you understand and are passionate about. You need focus and can’t invest in everything. On the flip-side, if someone brings me an esports deal, drone company or something else, I instantly pass because while I might think it’s going to be huge and successful, I can’t support it the way I can of those in my thesis.
  2. Is the founder that 1% type that has the hit, how do I feel within 5 mins of meeting them. Is there chemistry. In addition are the founders tech savvy, I think this is a massive advantage. The Founder is everything! That’s almost 75 percent of the call. I know the founder has the it within 5 mins of meeting him/her. They have to be willing to run through burning buildings to do what it takes and evolve/pivot their business which will naturally happen along the journey. I met the founder of Zenrez at SXSW four years ago and decided on the spot he was special. Fast forward today and the company is growing fast. I’ve participated in all his rounds and have an active advisory position.
  3. Can I provide instant value through my network and relationships. Part of the Arbor success story I mentioned earlier was the speed of which they could go to market through my network and relationships. In this game speed is everything and so is getting to the right person.
  4. Do I clearly understand the space and the opportunity, does the pitch come easy, can I digest it quickly. The deals I invest in I understand with one go, no slides or follow ups. I had this one company in the AI space that I had to have four calls with and I still didn’t get it. I had to shut down the conversation right away.
  5. God forbid if the CEO had to step down or got hit by a bus could I step in and run the company.

Yitzi: I have been blessed with the opportunity to interview and be in touch with some of the biggest names in Business, VC funding, Sports, and Entertainment. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might read this, or we might be able to introduce you.

Chris: I would love to have breakfast with Richard Branson . He strikes me as someone I could chat with for hours and also learn a great deal from given he has had so much experience launching new ventures against the odds and not caring what the public eye thinks. The reason its Richard is he has defied so many odds over his years of launching Virgin and takes so much risk to get there. Almost dying risk! Taking risk, not caring about adversity or being told he can’t do that are some of the biggest attributes of being a winning founder and Richard exemplifies that.

Yitzi: Chris, it was such a delight learning from you. Thank you!

Source: http://www.huffingtonpost.com/entry/chris-...

Location: Visit data is the market of the future

Pre-packaged segments are giving way to the free flow of location data pipes

The history of location data has been largely written by a market that buys audience segments for look-back re-targeting. That means a DSP, DMP or agency trading desk, can buy a segment for their commercial use. Keep in mind, this data has already been prepackaged by the location provider, so it has little use other than for re-targeting — and there’s the opportunity.

Based on what smart buyers of location data are doing, there are excellent applications for this data for both verification of location, and attribution (the holy grail of digital advertising).

The key question every advertiser wants answered is: Did someone turn around and walk into my store to buy my shit?

Perhaps the best-known tech company moving aggressively into this space is Foursquare, which in 2016 introduced its Attribution product, which has since implemented by TGI Fridays, Flipboard and even programmatic advertising companies such as Drawbridge to connect digital and mobile ad experiences to store visits. The results have been eye-opening: clear evidence of a 12% lift in store visits as a result of a consumer’s interaction with ads.

Combined with the rise of simplified Audience Sharing connectivity via companies like mParticle, this has opened the floodgates for a new breed of ‘piped’ data, allowing brands to easily share specific audiences and locations data with each other while bypassing traditional data exchanges, cutting out the middleman, and improving ROI. But that’s really just the beginning.

As the pipe continues to open-up and near or real-time data becomes increasingly easier to share, the use cases for location data are growing quickly, setting-up a seismic shift in the marketplace.

Evolving use cases for location data

Brands can now leverage these location data pipes to create interconnected experiences that leverage consumer predispositions across the digital and physical worlds in new ways to drive in-store revenue and improve omnichannel customer satisfaction.

Online publishers, who have struggled to make their data meaningful to these same brands, are now positioned to offer them ideally-suited mobile audiences with a history of specific mobile behaviors, making it easier to foster partnerships that demand a superior market valuation from traditional bricks and mortar operations.

This has created a brave new world for marketers seeking to engage mobile consumers with creative experiences that are at once personalized, scalable, and friendly to the LTV of both parties customers.

“The use cases for location data go much further than simply re-targeting users by buying off the shelf, pre-packaged data segments.”

One scenario gaining momentum is using location data for modeling purposes (e.g. a buyer of location data using it to conduct matches and/or complete an in-house analysis of what they know about a user). A specific use case could involve mobile gaming apps offering retail brands high-value interactions with committed gamers who, for example, would be happy to watch a retailer’s rewarded video ad at a key moment in the game loop in order to advance to the next level of their favorite game.

Predicting tomorrow’s location data market

These new applications for location data share the common trait of being able to inform decision-making at the top of the funnel, greatly impacting how and who marketers target based on how many times a user has entered a physical store, and what they’ve done while there.

This will create a future where location data markets are built around buying and selling visits data like a commodity, and NOT on the simplistic exchange of pre-packaged segments. The result will be a tremendous shake-up that takes money and control out of the hands of trading desks whose business models may make them may slow to respond, and tilts the balance of power in the location data ecosystem towards brands and marketers.

That said, actually aggregating and making sense of the minutiae of the visits data — including things like Device ID, latitude-longitude coordinates, relational context for places and dates, IP addresses, dwell time, etc. — ain’t easy. So, while each of these data sources has great value as an individual commodity, extracting that value is very technically complex, leading to a surge of location-data based technologies and techniques.

In Conclusion

By ingesting and applying visits data at-scale, clients are free to manipulate it like putty to form new market opportunities. As the business cases for doing so continue to prove themselves out and gain acceptance, the value of the data will grow, and visits will become firmly established as a commodity in the information economy.

Every company I speak to — Oath, Pandora, Pinterest, Blis, Ground Truth, etc. — have unique goals or challenges, it’s never ‘one size fits all.’ With raw visit data, they are free to use location as they please (and can do so because they have some smart fucking people that know what to do with it).

If you are not already thinking about visits data and how it fits into your location strategy, or you’ve yet to bring the people in-house to support that strategy (think: data scientists), you’d best get on it, because this is going to be the biggest, most critical shift in the young history of location data markets.

5 reasons I’m invested in Embrace.io

A few weeks ago, I shared the news on my investment in Embrace.io and their raise of $2.5 million from investors including Eniac Ventures, the Chernin Group, Techstars Ventures and BoxGroup.

After spending a year in stealth mode, listening to their market and building, Embrace.io launched with a clear mission: helping developers better understand how their apps are performing. Having lived the challenges of building, releasing and managing enterprise-scale apps from my days as CEO of appssavvy, I totally got this value proposition.

A large percentage of an app’s performance issues have nothing to do with crashes, though they tend to get treated that way. So, when something goes wrong, engineers are forced to crawl through the muck of issue discovery and diagnosis using a bunch of disconnected tools that weren’t even made for mobile. It’s a waste of time, a pain in the ass, and app teams hate it.

So, when I saw what Embrace.io has to offer (basically, a single tool to identify, visualize, diagnose and fix app performance problems), and the layer of detail they’re able to get to on the individual user level, I knew I was looking at a winner on the tech side. But what makes a company really worth investing in for me goes way beyond their tech. In the case of Embrace.io, here’s everything I saw that convinced me this one was going to be a winner:

Founders who’ve had success. Eric Futoran (cofounder of Scopely, which just raised another $60 million) is a winner, period. So are Eric’s cofounders, Maggie Shih and Fredric Newberg. As people who have built, taken to market and performance-managed some of the top grossing game apps of all time, including Walking Dead and Yahtzee, they’ve experienced first-hand the problems they’re trying to solve. Intimacy with a market's pain, combined with the talent and partnerships to solve it, provides a superb launch pad for any startup.

The mobile app ecosystem is exploding. As of this writing, there’s more than 5 million apps between Apple’s App Store and Google Play, with maybe 2,500 per day being added. More apps, means more performance problems, which means more need for tools like Embrace that make apps easier to manage. In the same way that BlueKai used cookies to create better profiles, Mopub made monetization easier, mParticle solved for central data piping, and Unacast is aggregating and harmonizing location, Embrace.io is solving app performance for a growing and fragmented mobile marketplace.

Licensed products vs. ad businesses are refreshing. In my article on selling data, I talked about the tangible benefits of a licensed revenue arrangement as compared to always getting stuck on the likes of CMP models. Embrace.io gets a similar nod of approval for having a SaaS business that scales and provides revenue predictability. This the route we go at Unacast, and I’d encourage more founders to factor this type of ‘investor think’ into their own pitches and revenue models. It’s a real difference-maker.

Visibility (this is huge). For the first time, by using Embrace.io’s platform, app teams have the ability to see all the in-app data for a given user's session, including network calls, memory, CPU usage, SDK interaction, clicks and screenshots. When there’s a problem, the engineer can dive-down into each user’s individual timeline, quickly diagnose an issue, and correlate it to a specific outcome (e.g. loss of an IAP, voluntary app closure, or an uninstall). Bridging that gap between a technical performance issue and a specific user experience, or business outcome, is a massive evolution for the apps business.

The power to change an industry. When apps can be more efficiently produced and managed, they will run better. When apps run better, user experiences improve. When user experiences improve, brands, advertisers and marketers will be able to create more compelling native engagements in those apps, improving monetization. When all this happens at-scale, we have a more efficient apps industry. Publishers are making better product (and have more time to focus on making cool stuff, rather than fixing broken stuff). Enabling techs and other businesses will rise up to bolster the industry and claim their piece of the pie.

Consumers will consume, companies will grow, mergers/acquisitions/exits will abound and we’ll be well on our way to the next big thing. Embrace.io is one of those rare companies that has the people, partners, vision and technical know-how to lead us there.

- Chris

Unacast is out to change the world of advertising forever - and it just might succeed

Thomas Walle and Kjartan Slette started Unacast after coming to a major realization: that the average person spends 30% of their time in front of their phone and computer. But what about the other 70%?

We spend the rest of our waking hours in the "real world" - the offline space. Advertisers spend so much effort trying to understand consumers' behaviors during the time we spend with our devices; shouldn't we also be spending more time understanding consumer behavior everywhere else? "There needs to be a way to understand what people do in the real, real, real world," says Walle. For Unacast, that way forward involves sensors that track people's movement. Every time someone interacts with a sensor, they leave a footprint behind. These sensors have stories to tell, and advertisers to help.

In essence, Unacast ties together online and offline data in a way wasn't previously possible, and certainly not at scale. Targeted proximity communication, based on a very specific physical location, is used to give consumers very specific offers. Data generated from interaction with a beacon is able to deliver a target ad to a mobile or desktop device.

Unacast realized the value in standardizing what is, admittedly, a pretty fragmented market. There are already products deploying sensors, but each Proximity Solutions Provider (PSP) can only understand a fraction of the user's behavior. If Unacast is the company that is able to aggregate all this data, then they stand to have a better understanding than any individual player.

Jump to the present day, where Unacast now has partnerships with 66 of the largest PSPs that cover 2 million or 40% of the world's commercial beacons. A wealth of reputable adtech platforms have partnered with Unacast, including MediaMath, JUICE Mobile, Lotame, SITO Mobile, Blis, and Sense360. To state it plainly, that makes Unacast the largest aggregator of proximity data in the industry, and part of why Unacast has been able to attract $5 million in funding.

It's more than funding that's coming in to Unacast: awards are beginning to roll in as well. The company won best "Verticals & Marketplaces" for its Real World Graph™ platform product at the Location Search Association 2017 Ad to Action Awards in San Diego.

Unacast is used to provide more relevant & advertising online; that's how they provide value to end consumers.

The potential of proximity data is nearly endless - enough to make any advertiser drool.

With proximity data, you might have the ability to say a particular consumer was in this Dunkin' Donuts store for 15 minutes and target them accordingly. Eventually, we will even be able to track consumer behavior within the stores themselves.

While Unacast has plenty of work to do before it has conquered the advertising space, it has the ability to go after plenty of other applications down the line. How can Unacast make ecommerce experiences more relevant? How can it make retail analytics more relevant? How can it influence city planning? How can cities become smarter? These are all long-term possibilities for the 3-year old startup.

Of course, Unacast isn't without its challenges. For one: they need to educate prospects better about proximity data. "Our biggest competitor is the status quo," says Walle. Most people are familiar with geodata, which is information about geographic locations that is stored on a computer. Proximity data tracks the relationship between objects (which can be people, places or things) - in other words, it illustrates how people interact with the objects around them. Demonstrating how proximity data is different and why it has higher accuracy and a different ROI than geodata, is something that Unacast constantly has to show.

The other issue relates to the sheer number of players in the PSP space: there might be up to 400 already in existence. As a result, there's simply no industry standard. Moreover, Unacast has to make a deal with each proximity company individually - a lot of effort, but the flipside is that the rewards are commensurately huge.

Walle and Slette went to Copenhagen Business School around the time of Napster and as a result, spent plenty of time talking about how to save the music industry. The end result was WiMP, which was soon renamed Tidal and sold to Jay Z. By building that platform, Walle and Slette learned how to harmonize a plethora of disaggregated content all onto one platform. It's that experience that is proving incredibly useful as they build out Unacast.

Let's face it: there's been plenty of hype around the Internet of Things: the idea that everyday objects will communicate with one another and the Internet to provide better experiences. If Unacast plays its cards right, it has the potential to be the backend that powers many of these interactions.

"Someone needs to index the physical world," just like Google indexed the online world, says Walle. If history is any indication, the company that led the last revolution typically doesn't lead the next one. If anyone's going to play the part of the revolutionary, Unacast is making a strong case for itself.

Read the original on Inc.com

After Moat Deal, New York City Ad Tech Pats Itself On The Back

Many New York City-based ad tech leaders saw Tuesday’s acquisition of Moat by the Silicon Valley titan Oracle as a testament to the city’s distinct startup ecosystem.

The Moat deal was a victory for the city and “a validation of the tech scene here,” said DataXu CEO Mike Baker, a prolific ad tech angel investor, in an AdExchanger Talks podcast this week.

Baker’s sentiments echoed other New York ad tech founders and investors after Moat’s acquisition was announced.

“SaaS startups are much harder businesses to get off the ground in terms of revenue, and it’s something New York City startups have done more effectively than others,” said Chris Cunningham, Unacast’s CRO and founder of the seed-level investment firm C2 Ventures. Redwood giants like Google, Facebook and Amazon have world-setting advertising businesses, “but they don’t know the ins and outs of how agencies and brands work like people in New York who are really in the trenches.”

It isn’t a matter of good or bad, Cunningham said, “there’s just a consistently different perspective that I think comes from New York City firms being a part of the media agency world and really feeling those same pain points in the ecosystem.”

Joe Zawadzki, MediaMath’s CEO and another prominent ad tech angel investor, told AdExchanger in a previous interview that the New York startup ecosystem mirrors Silicon Valley in the sense that it’s “people who know each other and the space who wanted to keep talent local and invest in second-generation companies in a space they know.”

But whereas Silicon Valley technology builds owned-and-operated vehicles – like app-based companies with their own audiences – Zawadzki said New York ad tech is a more organic part of the agency and brand world that calls the city home.

All of New York City’s venture funding “could fit into one room in one building on Sand Hill Road,” said Lewis Gersh, CEO of the programmatic direct mail startup PebblePost and a former industry venture capital (VC) investor. “So that seed-level activity fell pretty much to people in the industry who had exits under their belt and could step in and support companies.”

The different investment systems between New York and Silicon Valley, where VCs place bigger bets on riskier startups, made it tougher for East Coast startups to achieve early scale.

But in the end, these difficulties instilled stronger business discipline and an insistence on sound revenue models, said AppNexus co-founder and CEO Brian O’Kelley, who has investments across the ad tech space. “As people left AppNexus and other leadership teams to start their own companies,” he said, “they applied that professionalism to the space.”

What distinguishes New York ad tech investors from established VCs is that “these kinds of angel investors (are) trying to add more value personally,” Baker said. “I can tell you directly it’s what I do and my cohort of investors in terms of recycling the gains you make (on previous M&A deals) back into the space.

“And there’s been a lot of gains.”

Read the original on AdExchanger.