Want to know what it is really like to invest in companies? In our Investor Spotlight series we have candid conversations with real investors about the good, bad and ugly of getting into the trenches with founders and startups.
Meet Mike Ryan, a second generation entrepreneur, advisor and investor. We had the opportunity to speak with Mike to learn more about his journey from the graphic design world to investing, his Ten Ts for evaluating founders, and why he considers his dyslexia a gift. Connect with Mike Ryan on LinkedIn.
What’s your story?
I am a second generation entrepreneur and advisor. Both my parents came from very humble backgrounds and were completely self made. They built an international healthcare consulting firm based in Washington, DC. They invested most in their 7 children, who all are entrepreneurs, and their various business investments ranging from a hospital management company, a hospital design firm, an executive search firm, a publishing company and healthcare think tank.
After I received my undergraduate degree in International Relations and Communications from Regis University where my Dad, sister and three brothers attended, I went to the George Washington University School of Business. I also helped launch all their companies to some degree and worked in each. Furthermore, being a 3rd generation artist, I started MGR Arts and graphic design firm at 14 years of age. I served 17 years as an executive and eventually a CEO within the largest health systems in the US before returning to my entrepreneurial roots in 1999.
What was your path to the investing world?
Well, you could say once I earned money from my graphic design company I reinvested in myself and my future education. However, I didn’t start investing in other ventures until my late 30s. This was during the dot.com era and I, along with another investor, invested in eHealth and HealthOnline based in the Washington, DC area. Later, the company obtained Series A funding from Bank of Boston Ventures and this venture brought me to San Francisco’s Silicon Valley. It also set my life on a course where I acquired a company, which had recently acquired another company named MyPysch.com, which was founded by my now wife, Dr. Hagit Glickman. We jokingly state that we “met” when I acquired her and our son Jacob is our joint venture.
Do you have focus or interest in a specific industry/sector?
Like many investors, including my investing heroes Warren Buffet and Charlie Munger (who will be 100 next January 2024), I invest in what I know. So given my background in healthcare, digital health, healthcare technology, biotech and AI/ML, I tend to focus on those areas. However, I have served on over 75 boards of directors since I was 19 years old and many of those are beyond the healthcare industry. Also, given my immediate efforts are in capital fundraising globally, I am more agnostic since I am a huge believer in investing on the jockey vs. the horse.
How many pitches do you hear per quarter and how many do you invest in?
I was recently a keynote speaker at a Silicon Valley event and shared that I have served as an investor, judge or pitch coach for over 4,500 pitches during the last 15 years. So if you do some quick math that comes down to 75 a quarter. For context, I often received 15 unsolicited pitches from emails, LinkedIn and other business social networks each week. The other pitches are formal pitches from Max Shapiro’s PitchForce, UCSF Health Hub Annual Digital Health Awards, Draper University, George Washington University and usually 30-50 entrepreneurial programs.
What makes a pitch stand out to you?
Well, many pitches I review are timed competitions which require the entrepreneur/Founder/CEO to present the story in a limited amount of time, generally 5-10 minutes maximum. This requires extreme focus on their market, product, uniqueness, team and how much they are raising.
What are some red flags?
- Being unprepared – Practice. Practice. Practice your pitch in front of others.
- Know your audience.
- Not having done homework on who you are pitching – you should work it into your pitch
- Having technology issues or not being able to pull up your pitch deck
- Small fonts on your pitch deck
- Too many slides (use Y Combinator 10-13 slides)
- Not covering your team background
- Rushing through a pitch
How do you select startups to invest in?
I ONLY invest in the founder(s) 95% of the time or take on a company to raise capital based on the “Ten Ts” starting with the founder.
What are your criteria?
I have Ten Ts criteria (my new book being finalized for Q1 2024)
- Talent & Trust
- Time Together
- Technology/The Product
- TAM & Target Market
- Ton of Cash To Deploy Well
What is your favorite beverage?
Crystal lite lemonade with 3-4 fresh lemons in each pitcher I make every day!
Tell us about your passions and interests outside work.
Easy – my family. My children. Our rescue dogs. Now that our son is heading to college, we plan to travel globally.
How do you find startups?
I have over 30,000 LinkedIn connections globally and even more followers on LinkedIn and social media. Many are startup founders I have known for 4, 15, 30 years or more. They typically reach out to me.
Do you wait for them to contact you or actively scout?
I wait – they usually are referred to me by people I have known for decades from universities, Silicon Valley, Silicon Alley, Silicon Beach and around the world.
What is one thing people don’t know/misconception of being an investor?
It takes focus and discipline to be an equity investor vs. a retail stock market investor. To be successful in my experience, fortunes are made by investing in people not technology. If you are lucky enough to recognize people’s talent, then you have an investment thesis for several generations.
What are the most common mistakes that startups make?
Oh goodness, there isn’t enough time or ink! However, I have seen more startups or VC funded companies fail due to the failure of founders.
- Inability to sell their vision to investors
- Lack of trust at the first pitch with investor, so they NEVER get funding beyond family & friends
- Lack of basic management skills
- Lack of financial skills
- Inability to have Product Market Fit
- Inability to raise the next round of capital for growth
- Poor cash management
- Founder(s) know when to transition from CEO to chairman or board member because they have exhausted their skills set
What advice would you give someone who is looking for investment?
I think I covered many of the points above. Key is to invest in what you know. This gives you great power in understanding the founders, their skills, talents, BS, the product, the industry needs, history of successful and failed products or technology.
Additionally, do not invest your savings or leverage your house unless you are prepared to lose it all. Startups are risky. 95% fail within the first 10 years. Be tolerant of uncertainty, but keep the startup accountable over time. Excellent founders will keep their investors informed and be transparent.
Anything else that you would like to share?
I have been fortunate to have more than 50 years of operational experience as an entrepreneur, investor, chairman and CEO advisor to startups and growth companies. I have depended on a keen sense of what will be successful in the long run. I have severe dyslexia and it felt like a “curse” in my pre-college academics. However, it has become a “gift” in life. There has been much research done and written about dyslexia and how people “blessed” with it function differently in the world. Oftentimes the academic setting is not geared to our skill sets, talents and visions of how they might work.
The stories of dyslexics in business are well documented – from Bill Gates, John Chambers and Charles Schwab to Sir Richard Branson and Steven Spielberg to Steve Jobs. It is estimated 35% of all entrepreneurs have dyslexia. It would be interesting as another “X Factor” an investor might want to ask the entrepreneur. I would bet on that jockey to change the world in a positive way as Microsoft, Cisco, Charles Schwab, & Co, Virgin, Amblin and Apple have done.
The Founder & Investor Spotlight Series focuses on the entrepreneurial journey. At Buzzy Rocket we are passionate about helping entrepreneurs share their vision. Interested in participating in the Founder & Investor Spotlight Series? Contact the Buzzy Rocket team.
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