You still hear it a lot around town: it’s hard to raise money for early-stage startups.
The truth is it’s hard to raise money for anything. But there are an increasing number of options for entrepreneurs coming out of places like MIT and Harvard. One of the most recent is TechU Angels, a seed-stage angel investing firm led by Natanel Barookhian (pictured), an MIT Sloan School graduate who splits his time between Boston, New York, and the rest of the world.
TechU Angels has a team of eight people spread around the globe. The firm was launched publicly in early 2014 and hasn’t disclosed how big its fund is. It has the capacity to make five to 10 deals a year at around $250,000 per investment, Barookhian says. It can lead seed deals and/or co-invest with other funds. And its main focus is on entrepreneurs from MIT.
“We want to be a support to the Institute as much as we can,” Barookhian says. At the same time, the team isn’t looking solely at MIT, or at Boston companies. “That’s part of the plan, not to be focused on one area. Our team is really dispersed, because we want to be everywhere,” he says. “We bring a very global perspective and global relationships to a lot of our companies. That’s very difficult to find at the seed stage.”
The firm has a broad sector focus on technology companies. Barookhian says he looks for “entrepreneurs who have good industry experience” and startups that are “founded by people who are leading researchers in the space.”
TechU Angels has invested in four startups to date: Bevi, which makes smart water coolers for offices; Accion Systems, which is developing a space propulsion system for small satellites; LedgerX, which is working on technologies for digital currencies (including a Bitcoin options exchange); and an undisclosed software company. Bevi and Accion are in the Boston area, LedgerX is in New York, and the fourth company is in the San Francisco area; the first three, at least, have founders from MIT.
Barookhian previously co-founded C-Crete Technologies, a cement nanotech startup that won the MIT $100K competition in 2010. Prior to studying at MIT Sloan, his background was in consulting and venture capital.
(An aside: The photo of Barookhian above was taken in Nebraska when he went to visit Warren Buffett. Key takeaway: “He’s very disciplined in his approach. When you hear him discuss his strategy, it’s always that he could find hundreds of different strategies and opportunities, but as long as he picked one strategy and did it really well and was consistent about going with that strategy across the board and in all his investments, he would develop a thought leadership and expertise and get things right 9 times out of 10.”)
TechU Angels joins what seems like an increasingly crowded field of seed- and early-stage tech investors in the Boston area. Other emerging players include Romulus Capital, Xfund (which has ties to Harvard), and NextGen Angels, which recently expanded to the Boston area from DC and New York. Of course, there are plenty of more established funds in town, as well.
So far, Barookhian says TechU Angels hasn’t seen much competition for the kinds of deals it has been pursuing; there seems to be plenty of room for everyone to operate. “There’s a big pool of companies here, if we’re not running into each other,” he says.
One key differentiator, he says, is that his team is looking globally at companies and opportunities. Some investors “tend to be focused on a particular city or region,” he says. “We think that’s the wrong approach. There are only so many deals, and it’s not very helpful to your startups if you’re thinking regionally and not globally.”
