Information Technology/SaaS/Big Data
Real Estate and Construction
Kevin is a co-founder of Blu Venture Investors and CEO of Canal Group, a holding company for diversified investments in commercial real estate, private equity, and early-stage businesses. He is also director at Argo Systems, the Mt. Washington Pediatric Hospital Foundation, and the Carson Scholars Fund.
As an investor, Kevin looks for three criteria in a company: The intelligence, integrity, and experience of the management; a unique value-proposition and demonstrated demand for the product or service based on actual sales; and a fair valuation and a low probability that it will be distorted over time. His advice to entrepreneurs when fundraising is to maintain a valuation at or close to fair value to avoid distortions and make it easier to attract capital more quickly when needed. It goes back to a lesson from the investor Ben Graham, “In the short run, the market is a voting machine, but in the long run it is a weighing machine.”
What do you look for in a startup company?
Experienced management with intelligence, integrity, a healthy understanding of its own limitations, and an ethos of constant learning. Experienced co-investors with an appreciation for the distortion that can be caused by mis-aligned valuations.
When on the board as a director or advisor, what do you do to help them get to the next stage?
The first thing I do is work with the management to develop KPIs and drill down to the key questions that reflect the health of operations. We then work with the other directors to learn how the company can draw upon their unique networks and expertise so we can go beyond quarterly meetings and actively engage in the company’s growth.
Why do you invest in follow-on rounds?
There are two reasons to do a follow-on: growth capital and to protect an earlier investment. Growth is obviously more fun. Adding capital when a company has proven itself is generally a higher valuation, lower risk investment. On the other hand, follow-on rounds when a company is struggling or has failed to deliver on its promises is where you really learn about the character of the management and board.