Thomas Korte

Update 12/22/11: Setjam was acquired by Motorola (more on Techcrunch).

I just invested in SetJam. I did not know about them this morning and it only took 2 hours and 52 minutes from the first introduction to funding SetJam!
Find out why and learn how you can deal with angel investors:

• Saturday 9.18 am – David Rose asks me if I’d be interested in SetJam with /cc Ryan the founder
• Saturday 9.40 am – I email Ryan asking to talk by phone
• Saturday 10.35 am – I call Ryan (while on the playground with my son – bad daddy!) and we talked for 45 minutes. At the end of the conversation I tell him that I am 90% likely to invest
• Saturday 12.10 pm – I email Ryan & David telling them I am in and will send paperwork on Monday

So, what happened you wonder …. How do some companies get investors to fund them in less than three hours. Here are my thoughts on SetJam:

The market:
Just a few days ago a I tweeted about the “TV war” and how a lot of startups are going to benefit when big players get into a fight (Apple TV, Google TV, Yahoo TV, Netflix, Amazon, Blockbuster). I like companies that throw themselves into the ring when it gets hot. Startups are faster, more versatile, and usually have less “competitive issues” than the big players. There is a high chance startups fail, but if they succeed, they win big. SetJam is smack-middle in the “How are we going to consume TV in a few years” space.

The product:
I worked at Google for seven years and most of my technology-opinions have been formed or validated there. I like products that aggregate content *and* add value in the process. I like products that enhance the user experience of things we already do online. And I like products that seek to have users spend minimal time on their site: a value-add aggregator should always seek to send visitors back to the original content. SetJam does exactly that.

The people:
I only talked to Ryan the CEO. He is smart and has business acumen, he has good “online instincts” and integrity. How can I tell? Well, I interviewed hundreds of people while at Google and one develops a sense for asking the right questions to find out. It also helped I respect the person who introduced him (David Rose). Ryan has worked for David for five years.

Peer validation:
If I am wrong with all of my instincts, assumptions and hopes, I am not alone. Some 20 other angel investors, including four of my fellow Xooglers in NYC,  have invested in the company. With that many great people giving advice, making intros, interviewing key-hires, testing the product, there is a much higher chance that the company succeeds.

The deal:
No one ever talks about this, but it is an important part of the decision to invest in a company. What are the terms of the deal? Obviously I won’t disclose the terms but they are fair. The founding team understands the value of early investors and does not just want their money. I appreciate that.

The document:
Another important fact was that all of the documents were well prepared and easily accessible. David gave me access to his “deal room” on Angelsoft (think salesforce for angel investors) and I could quickly understand what they do, what their plans are, and what traction they already gained.
Within Angelsoft I could also read the conversations other investors had with Ryan and see who else was investing. Using Angelsoft made the process of funding SetJam much easier and faster.

So, what can you take away from my experience when you are fundraising? (obviously, pre-requisite should be for you to have a great product, an outstanding team and traction)

• Choose early angels wisely. The first few investors in a round will be your champions and will provide peer validation for other angels.
• Structure the investment properly to attract good investors. The deal has to be appealing.
• Be available: Ryan responded within minutes (on a Saturday morning)
• Be organized. Ryan emailed me all documents immediately after we hung up.

It’s important to point out that such a turnaround is highly unusual, even for me. It is more common to take weeks, sometimes months before investing in a company.

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