Startup Investor Spotlight – Matt Keezer
Commencing operations in 2007, Momentum Ventures has since launched seven successful businesses, using their own uniquely refined investment model to reduce risk. In the last three years, they’ve focused predominantly on the online travel industry, launching FlightHub in 2012 and Summit Services in 2014.
Notes Matt Keezer, CEO at Momentum Ventures, “We are actually on pace to launch another online travel agency later this year with Alio, which we believe will be able to compete with Expedia and Priceline as a top online travel agency (OTA) offering low-cost flights, hotels, and travel insurance.”
In recent years, investment models have changed swiftly, with traditional channels now open to the wider market, as well as the advent of crowdfunding, angel networks, and the likes. However, instead of making investing easier, greater access and additional channels have, if anything, muddied the waters. CloudTweaks discusses startups, business growth, and investment risks and opportunities with Matt Keezer.
What is Momentum Ventures’ approach to building businesses?
We look for three things when starting a new business. Firstly, we have to find and identify an industry we’re actually passionate about and are ready to immerse ourselves in. Secondly, we look at businesses within that industry that are doing well now and will continue to do well in the future. Lastly, we determine whether or not we have a reasonable entry point into the industry.
In the past, you’ve mentioned the small minority of startups that actually evolve into thriving businesses – do you think there’s any place for tech startups in today’s environment?
Yes, but I believe we’ve found a better way to build winning businesses at Momentum Ventures. At the core of it, we launch startups, but we don’t start a new business without first making sure it is proven to be virtually consumer-proof. Ultimately for us it’s all about eliminating or reducing risk at all stages of development and implementation while simultaneously pushing for growth. With that in mind we focus on making sure the market is safe to enter when it comes to consumer adoption, the business we are launching is within a proven online industry we are prepared to penetrate, and we provide the right mentorship and support in-house to simultaneously insulate and accelerate the businesses’ development. So yes, startups do have a place in today’s tech environment, but the ways in which we develop, build, and support them can be vastly improved.
Are there any technology sectors you believe are ripe for financial investment?
The online industry, in general, is still in its infancy, and we believe great companies will continue to emerge in this space.
Aside from financial investment, how does Momentum Ventures strive to build and support stable companies?
We focus not only on financial support, but also mentorship. Our company is filled with business leaders who have grown up with the tech industry and know how to guide young entrepreneurs. Likewise, our liberating support system empowers our entrepreneurs to focus on their product and business development strategies.
What do you consider to be the pitfalls of the existing venture capital model?
The high failure rate. I have a hard time not feeling bad for the entrepreneurs spending their time and careers on a failing project. However, some believe that this extreme level of risk is necessary for true innovation. I disagree with that notion.
Do you believe crowd funding could be put to better use? If so, how?
Sure. At the end of the day, any model can be improved. The thing with crowdfunding through a service like Kickstarter is that it really is a double-edged sword. You see flash-in-the-pan businesses get funding due to the micro-transactional nature of the platform. Likewise, some strong businesses have been saved by crowdfunding. The fact that these “investors” have no equity is great because its puts the power in the hands of the entrepreneur.
You’ve stressed the importance of personnel in successful business building – what should tech sector investors be looking for in the teams they’re backing?
For some, success just comes naturally and isn’t limited to the workplace. Some have a killer instinct to succeed at everything they do, and it’s something we definitely look for when evaluating candidates. You need to find those people if you want to build a successful team.
For investors and entrepreneurs alike, Keezer's insight and Momentum Venture’s proven strategy suggest that new endeavors need not be risky gambles, but instead through precise calculation and careful management, a fait accompli.
(Sponsored series via Momentum Ventures)
By Jennifer Klostermann