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Rudy Garza is a native of Austin and a recognized Texas leader in the technology start-up industry. He started G-51 Capital in 1996 a few blocks from the University of Texas campus and now has served as an investor and board member for over 20 companies, selling numerous to publicly traded strategic acquirers including SAP, ADP, Prudential, and Cisco Systems among others. Rudy has demonstrated success in seed-stage business identification and development not only in Texas but across the country, leading to the firm’s nationally ranked return performance. He is an active leader in the venture community, including longstanding participation in NVCA and the Texas Venture Capital Association. He has led syndicated investment deals with numerous angel investors, institutional and corporate venture capital firms nationwide. You can follow Rudy on Twitter @TexasSuperAngel
Video interview with Rudy Garza, transcript follows & video above.
- I was wondering if you get any women or female entrepreneurs coming to pitch you with their startups?
We do get a number of women coming to pitch us with their startups. I think if you look back over the last 3 to 5 years, I’d say the number of women entrepreneurs has probably doubled or tripled from what we were seeing 3 to 5 years ago.
- Gee that’s fabulous isn’t it? Can you tell me the sweet spot or theme of the companies that you like to invest in?
Yes sure. G51 Capital are a Super Angel Investor. Super Angel definition to G51 is that we place typically anywhere from $1/2million to $1million for initial investment. We generally lead the Series A & we provide very hands on support & nurturing of the companies & the entrepreneurs. We’ve invested in a number of different companies over the years. We started the company back in ’97 & the model nowadays is less is more. Entrepreneurs have become more sophisticated & they know cap tables & they know doing more with less helps them retain larger ownership percentages on the back end. We’re excited to be working in that arena.
- Do you like to invest locally or do you look all over the US?
We look all over the US for our investment opportunities. We just announced a Stanford fund where we’re working with what we call our hyper networker in Larry Chiang. He’s quite the energetic individual & he’s very passionate about working with engineering students & computer science students in Stanford. He’s been teaching E141 Class, Entrepreneurship for Engineers. So we’ve teamed up with Larry & we’re going to go out & find a Stanford founder. We think that model of affiliating with different universities & those associated ecosystems is a smart platform to work from going forward. So Stanford is going to be the first test bed for us.
Fabulous, that sounds really interesting.
- I’m wondering whether you’ve noticed any differences with women when they’ve pitched their businesses? Or if you invest in them when they run their startups? Are there any differences that you note compared to men?
I always hate to generalize but I think we found that women entrepreneurs are sometimes better listeners & are willing to take advice. Sometimes the male counterparts might be a little more set in their ways & need a little more deliberation for that. But what’s nice is that when these entrepreneurs recognize that they have strengths & weaknesses & we can help support their weaknesses & they recognize that, then it works out really well. I think women entrepreneurs tend to come in with an open mind on that. So I think that’s a real positive of working with women entrepreneurs.
- Would you have any advice for women entrepreneurs or females that are looking to raise venture capital?
My advice for female entrepreneurs is try to understand what kind of capital your company needs. Try to right size your capital raise & your investors that you look for with the right markets. So for example if you were looking for $1/2million you may not want to go to a Sequoia or a Kleiner. You also have to understand the opportunity around your startup. So if you don’t have a billion dollar opportunity again you wouldn’t want to go to a Sequoia or a Kleiner. If you have a smaller opportunity, there’s going to be some businesses that can be very well 100% funded by angel groups. And there will be businesses that will require angel groups & super angels. And there will be businesses that will require angel groups, super angels & traditional venture. Beyond that you can add the growth capital partners on the other side when opportunities really take off & you have some magnificent opportunities. So try to look at your business & figure out what your capital requirements are going to be & right size your capital requirements with the prospects for your company for the investors that you are going to contact. If you right size those quickly you will meet with your people, you’ll be more effective & you’ll raise money faster.
- Fabulous & just to clarify for the audience, how would you define a Super Angel which obviously you are?
The G51 definition of a Super Angel is someone who invests post angel but is not traditional venture. I think the traditional angel investment in today’s market is around $350k. I think the typical incubator funding ranges pretty broadly from $25k to another $100k or $150k. What tends to happen is those companies are able to develop their products & build an initial team on that money but often they haven’t been able to exercise enough commercial traction to justify a traditional significant venture round of funding. So that’s where Super Angel money comes in. They’ve delivered a beta product, they’re ready to move forward & with $1/2million, $1million or $2million they can prove the commercialization opportunity around their technology. That’s my definition: It helps them prove the technology commercialization around their product or company.
That’s really great & it’s given me a clearer definition. Thank you so much for that & thanks again for your time today Rudy.
You bet! Good luck! Thankyou!