Tuesday, August 19, 2008

Clay Cook - Entrepreneur & Angel Investor

Today we showcase a story of a man who is, an entrepreneur and a successful Angel investor, helping a lot of Australian business to realize their dreams. Clay Cook is based in Perth, Western Australia.

Let us explore a bit further how Clay is helping others and what he thinks about innovation coming out of Australia. This is what Clay has to say in his interview with me.

• Please tell us about yourself, your background and interests?
My "tags" would go something like… Serial tech entrepreneur, Ineedhits, Minti, Vibe Capital, Gooruze, Angel investor, Father, Husband, Relaxed, Perth, Australia, Nice guy.

• What is the name of your venture firm?
We are Angel investors and over the past couple of years of years have invested around $500k of our own personal money.

• Who are the people behind this and how it started?
It is myself and my wife Rachel Cook. We started investing in 2006 when we invested in 1stRed (formally Red Lottery), and then we continued with investments into Mig33, Omnidrive, Tangler, Orgoo and zTail. We also privately invested in our own start-ups that went outside for further capital including Minti, Vibe Capital, and Gooruze.

• What is the main objective/mission behind your venture?
We are fairly pasive investors mainly because we are busy with other things. So the main objectives for us are our ROI and increasing our network.

• Please tell us how does an angel work? It's one of those professions that seems like black magic to others and sometimes don't understand what exactly they do?
Typically fairly casual and found via trusted referrals.

• What ways/models does an angel get engaged with a business/startup?
Convertible notes or equity investments.

• What sort of due diligence process is followed and what factors attract an angel to be a part of a business?
Probably not enough due diligence, however, we tend to stick to investments in areas that we have knowledge in. For example, most of our investments to date are internet businesses and in the Web 2.0 field.

• What stage would you invest in a company? And what do companies have to show before you're interested?
The most important items we look for are the people and any proof of scaling (i.e.: membership, page views, etc)

• What other services an angel firm provide, for people who are looking for help? Contacts & Experience.

• What market segment verticals are you targeting?
Tech & Web 2.0 & Online Marketing

• How many ventures/companies are using your services?
All can be seen at Claycook.net - Mig33, Orgoo, Tangler, zTail, 1stRed, Omnidrive. As mentioned previously we also privately invested in our own start-ups that went outside for further capital including Minti, Vibe Capital, and Gooruze.

• What sort of marketing you are using to spread the word about these portfolio companies?
Word of Mouth with our relevant contacts and also occasionally Twitter etc.

• What's your thought on being an angel?
It is extremely risky.

• We recently interviewed owners of 65 new/mature tech startups and all of them have said that raising money in general via a VC/angels is very tough in Australia? Why is that so?
Probably because the success rate is low and also the returns when successful are nowhere near the size of US-based exits. Also - other investments in the last 10 years have given far better and more consistent returns (i.e.: shares and property).

• Do you think angels in Australia are more conservative in their approach and don't take many risks in technology-based business?
Yes. Australia doesn't yet have enough Internet millionaires willing to reinvest.

• How does the Australian angel funding industry compare to the one in the US?
We (Australia) pale in comparison.

• Any new ventures you think are worth keeping an eye on?
Mig33 especially and also the mobile video streaming sites like Kyte.tv and

• What do you think the government (federal and state) should do to improve the culture of innovation and the software industry?
Lower or remove tax on Angel/VC ROI.

• What government resources have you used to help your business? And have they made an impact?
no.

• Have you sought any funding/help from govt or other sources?
no - waste of time.

• Do you have any advice for people who want to start their venture?
Work 80hrs+/wk and don't give up.

Thanks, Clay for sharing your thoughts with us. All the best for the future.

For coverage on other Australian startups, innovation, analysis, and tech trends, check this out our coverage on interviews can be found here

1 comment:

Anonymous said...

A good and innovative Entrepreneur can become Angel Investor for his business if he is that much capable. Previously I used to think that entrepreneur can never become investor but after coming cross your blog I realized that it would be happen if we have intonation within us. Thanks for giving such an interesting information.