Entrepreneur & Angel Investor
David Chang | Entrepreneur & angel investor

"You got to articulate to someone what your summit is, and then what your base camp is. So the whole time, you are trying to orient someone whether it's an investor, an employee or a prospective partner of a really big idea, and you're the team that’s able to climb that mountain to get to the really big idea."

- David Chang

David Chang on filling in the gaps.

Talk Takeaways

David Chang, born in Taiwan and raised in the US, shared his success story on how he flourished in his career as an “accidental” entrepreneur and Angel Investor. His hunger for adventure pivoted his career from software engineering with Goldman Sachs to tech and entrepreneurship with PayPal and Tripadvisor.

He emphasized that through his experience, he learned giving back to founders in the early stages keeps one young at heart. To make a parallel, he also compared big visions to mountains that must be climbed and focused on the peak to bring the team to the top.

David discussed rapid-fire velocity investing, making sure that the deal flow process in the angel investing group that he cofounded moves as fast as possible to be more agile and nimble.

About

David is an entrepreneur and angel investor who has held operating roles at six startups and invested in 70 companies. He was most recently the Chief Executive Officer of Gradifi, which was acquired by E*TRADE. Previously, he was Entrepreneur-in-Residence at Harvard Business School and Director of the Babson Summer Venture Program.

For more info, see www.davidchang.me

PAST EXPERIENCE
David has a successful track record in hands-on roles at both direct-to-consumer and enterprise companies, six of which were acquired or IPO’d. He previously led the PayPal Boston office and co-founded the Start Tank innovation space and the Where Angel Fund. Before WHERE’s acquisition by PayPal in April 2011, he held the role of VP of Product, which included strategy and corporate development.

Earlier in his career, on the consumer side, David was Director of New Products at TripAdvisor where he launched new features to meet consumers’ needs. He was VP of Marketing and Co-founder of SnapMyLife where he led product and marketing efforts. On the enterprise side, David was Director of Product Marketing at m-Qube, a pioneer in the mobile content space. He was Senior Product Manager at edocs and was a VP of Technology at Goldman Sachs.

As a leader in the entrepreneurship community, David holds several advisor/board memberships. He is on the board at MITX, an advisor at Harvard Ventures, Nanigans, CO Everywhere, OpenFrame, and Linkwell Health. He has made 70 angel investments in startups such as Crashlytics, clypd, Amino, Logz, Cuseum, CarePort Health, Dashfire, Mogul, Uncharted Play, through the Where Angel Fund and TBD Angels. David is a frequent speaker on the topics of startups, fundraising, and the Boston tech ecosystem, and he actively mentors students and founders. Awards include Boston Business Journal’s Power 50: Most Influential Bostonians, BostInno’s 50 on Fire: Education Winner / Investment Winner / Tech Finalist, and Finalist for NEVY Angel of the Year.

ADVISOR ROLES
Board Member at MITX, Feelter
Advisory Board Member at Inrupt, Harvard Ventures, Nanigans, CO Everywhere, Campseekers, Sharalike
Advisor & Mentor at MassChallenge
Mentor at TechStars

ANGEL INVESTMENTS
70 angel investments in startups such as Crashlytics, clypd, Amino, CarePort Health, WEVO, Cuseum, Dashfire, Mogul, Uncharted Play, xPeerient, and through the Where Angel Fund

The full #OPNAskAnAngel talk

Jeffery: welcome to the Supporters Fund Ask An Angel. I’m your host Jeffery Potvin and today very excited to chat with David Chang. so welcome to the show today.
David: so excited to be here. thanks for having me.
Jeffery: awesome. very excited. I’ve gone through so much of your content, I can say that. actually it’s funny. one question that just popped in my mind, I wanted to say when you did your first kind of YouTube video and you were talking about things in marketing and all the way across all these different spectrums, is there one video that really stood out that you want to go back to? and say, no you know what, I changed my mind on all of that. let’s redo it. that was ten years ago. I’m going this direction. I wanted to ask that question even though that has nothing to do with what we want to talk to today. But because you’ve got so much great content, I figured you know what, I got to ask this guy if this is something that he would look back on and say I want to change that video.
David: 100%, I know exactly which talk. that we had done for the ad club about growing a business in Boston. And the short of it was it was one of my very first early presentations around branding and what had happened was, I made some last-minute changes and so I had three different versions of the presentation. so I had my laptop that had one. another one was queued up and a slightly different one was queued up on the speaker version. so I had told one joke, dead silent. I could not figure why until they started laughing about two minutes later that the punch line would then appear. so I’m like you know what, that’s the one I want to redo. well maybe we’ll get the opportunity one day to go back because I think there’s a lot of things on the internet that we’ve always wanted to go back and say I think I could redo that one and make it really good. just like a book, you come up with volume two, right?! I don’t see there’s an issue with that.
Jeffery: yep, nope. not at all.
David: and it turns out, it’s like it was pretty bad in my head. And like maybe it was fine for everyone else. But yes, that is absolutely the one I want to redo.
Jeffery: I love it. well we’re going to take a journey back again just to talk a little bit more about it. the way we start the show off is always to dive into learning more about you and where you’ve come from. so if you could take us back and just talk a little bit of the stuff you know, even before PayPal, all these great things that you’ve accomplished in your career, what you’ve done, where you’re going and then one thing about you that nobody would know.
David: sure, um, maybe I’ll do it prior to when I really got into startups. And so my quick background is I was born in Taiwan, moved to the US when I was three. And then ended up just really falling in love with technology at an early age. And so, before I was probably even legal, I was working for a print shop putting together like brochures and resumes using Page Maker and an old school Mac. back in those days, when you know it’s really hard to do that stuff in the physical world, I thought it was just really cool that you could use computers to do so. And so that was my early upbringing. And the reason why I mentioned that is I’ve long been fascinated by software and doing things at scale. And even to this day, I think that’s a lot of what drives me. I think one thing that you may not know, or at least a lot of people don’t know is, that I’ve actually had two legal name changes in my life. And so one when I first moved to this country. my parents gave me a name. And I hated that name so much that I actually did my own legal name change when I was like, nine or ten. And so, I have a couple different aliases and I’ve of course picked a pretty generic first name, ‘David.’ So, I often throw out there, if you can guess what that name was, before I’ll get your prize. But that’s something that very few people know about.
Jeffery: oh, that’s amazing. well I’m not sure I’m going to be able to guess to figure out what that previous name was, but I do am fascinated that you took the initiative to actually change your own name. how did your parents feel about that when you approached them, and said stop calling me joe today, my name is David?
David: well Jeffery, if it was Joe. I think it would have been fine with it. But it was so obscure that I just like you know, they weren’t thrilled with it. they gave me a name that they thought was like, oh this is what you do when everyone moves to this country. And they give my sister a perfectly like, you know plain jane name. I was like why couldn’t they have done the same for me. But they eventually got used to it.
Jeffery: oh, that’s alright. well I guess you could utilize that double triple name to sign up for other things throughout life. And you would never have them be implicated back to you because you have multiple IDs, or multiple ways of doing things. so you could be running like three lives and no one would know the difference.
David: yeah, exactly. And very few people because they know what that is. I once threw this out at a conference that we have in Boston. it’s called the Nantucket Conference, and it’s 200 or so people entrepreneurs, angel investors, VCs, etc. I happen to be on a panel with three other Davids talk about that whole problem of too many people named David and tech. But four of us were Davids and so I slipped that out there as a guest. And lo and behold, someone in the audience actually knew one of my relatives like some obscure connection. And she knew it, she shouted it out. I was like you got to be kidding me. that someone knows this. And of course you know no better place than 200 people. of all your peers and colleagues to know what that name is, but I think they forgot. so I think I’m safe.
Jeffery: oh, that’s awesome. very cool. so if we kind of take a journey back to your earlier, kind of, we’ll call it the employment days, because you’ve done a lot throughout your past. And if we start to dive into I would say even before the Harvard Business School, because you’ve done a lot in the early stage side of things. But what I love about your background is that you’ve been from Goldman Sachs, all the way up until getting into PayPal. But all of these are fast-moving tech enabled businesses. innovation is part of the culture. so while you were kind of in these spaces, what drove you into them? because I think Goldman Sachs is really the forefront of your diving into this tech space. I think that’s really where it started. that’s when you kind of progressed into PayPal. what were the learnings that you took from that? that really got you more interested in innovation that they kind of shaped you to get into early stage investing? what were the facets and so in those businesses?
David: I do think of myself as like an accidental entrepreneur. Maybe, I’m an accidental entrepreneur and also an accidental angel investor. And looking back now that I’m 51, looking back I can certainly string together a logical story of why I made the changes that I made and how I went from one thing to the next thing. But you know, at the time, every one of those decisions was heartfelt, like should I do it? should I not like a 51 or 49 kind of call? but after graduating from undergrad with a computer science and economics degree, I ended up at Goldman as a software engineer for seven years thinking that it would be really fun to work on business problems. And I got to travel the world. I got to live in New York, Tokyo and Hongkong. And I guess what’s somewhat unusual is even though I was there seven years, I reported to the same person for seven years. so talk about stability, like we just used tech. I love the group. I love what we were doing. we were making trading more efficient. And so it was. it was a blast on. I remember days when I came in, I’m like god I’m so lucky to be doing this. I wouldn’t want to do anything else. And when I ended up going to business school, my full intent was to go back to big companies. But you get a break for two years and suddenly you get to see things you didn’t get to see. And it was only a year and a half into a two-year experience when I decided you know what, that last job that I had before, I actually think there’s more interesting things that I could do. And that started my deep dive into tech and entrepreneurship. And after 20 years or so years doing that, now been part of six Boston-based companies, some B2B, some BBC. I was one of the early employees at Tripadvisor. And so that was a great consumer brand. I ended up at a company that we sold to PayPal. my most recent company we sold to e-trade and throughout that whole journey have played a handful of different roles from product to product management, product marketing to marketing operations and corp dev and general management. And so I’ve been lucky to have had the opportunity to do a handful of things coming from what I still consider myself as like an engineer at heart. Sometimes, I wonder how far I’ve strayed off that path. But each one of those changes are ones, that at the time felt a little bit difficult to make. But at the end, it had added up to something that was now, I looked back and pretty rewarding.
Jeffery: I find it fascinating that you took the software engineer side of things and then you started to take that knowledge of tech and you layered it into the business side. so you kind of shifted from being that CTO to now becoming a generalist. maybe it’s the GM side, but you started to dabble in all the different spaces. But your base was the tech side. And what I like about that is, in my background, I’m the exact same. And I think that I find that developers are coders as long as they went in as a generalist. as a developer, they really do get a really good landscape view of how the business runs because code does work across all streams of supply chain marketing enablement. everything across that spectrum. so as you are progressing through and taking different roles, how much of that different role change was your interest? because of your base, having this strong tech side of things, you kept going into the most challenging next steps which is, oh, well maybe I’m a coder. And I don’t know enough about marketing. so I’m going to slide into here and now. I’ve got enough on the marketing side. I’m going to go over the finance. I’m going to go over here. it was that kind of the direction that you took because it just seems that as a generalist, you keep building your base. And their base started as a coder and now you’ve done almost everything in that business.
David: yeah. And through a longish journey, I remember one of the I guest career counselors that we had in business school had described. right now, where you all are at this particular point in time, that if you’re in the middle of a series of concentric circles, and the circles represent time, and you march off in a particular direction, it’s very easy for you to march off two to two years doing product. And then very easy for you to walk along the edge of that circumference, of that inner ring to product marketing. or maybe to sales or something along those lines in two years to do something else. But it’s really hard if you do 20 years of something and then try to suddenly want to be a business development person, and you’ve never done that before. because then you’ve got to travel a long ring out of that. like most the biggest circle, to travel that, and it’s a long distance to cover. And so for me having that sort of short periods in each one of those stints was really helpful. at the end of the day, technology was definitely something that was helpful for me. But every transition sometimes felt a little painful because you don’t know what you’re doing. you feel like, hey I was just beginning to develop some muscle and getting good at something and now I’m shifting. And I remember the first product role that I took in post Goldman where I was at a software company but selling into financial services. so almost flipping the industry in the function, and yeah, I absolutely got my hands slapped by the engineers that I worked with. because like my default was, as product manager, I’m like okay, I’m going to default define problems and I’m going to help solve them. it’s like no. no, that’s not what you do. And it was, you do that a couple times and you realize, okay, I’m wearing a different hat now. And because I’m wearing a different hat, I have to really focus on other things. And so you know, I guess the good thing is, when you have good people around you, they’ll remind you.
Jeffery: agreed. And the point that you just made there is the focus side of things. so coming in as a generalist working in different buckets, the hard thing is focus because you’re relearning something new and then you kind of keep shifting. And I find this happens a lot in startup world is that founders go into solving a problem but they have a tough time focusing on that specific problem and they kind of end up hitting multiple areas. so I’m guessing that, with your background and knowledge, you’ve been really able to help them better see how that focus should work. because I’m sure there’s the world’s your oyster. And they’re fighting the world that way. And then you’ve got yourself, who’s like no. no, I’ve seen this. you can’t. you got to go this way. please go in this direction. we’re not going to make it. how do you get them to focus in the same way you did?
David: yeah, I mean I hope I’m helpful. I think we all want to be helpful. And sometimes you don’t know if you’re being helpful or not. And while clearly when you do something for a long time, you get a lot of pattern recognition. I hope I’m one of the first to be aware that I don’t know exactly the situation that they’re in. And so, the most advice or the most helpful thing I think I can do with them is not to tell them how this is. what I would do, it’s, ‘here are the trade-offs. I see a couple different paths in front of you. here are the pros and cons of taking one. And here’s the pros and cons of taking the other.’ and so I think by framing them in a sort of, if then else sort of I guess here’s where the coding and the programming comes in. But if you frame it that way, at least it gives them a way to figure out the challenges and figure out how to get out of their own or solve their own problems. because I think the worst thing you can do is either an angel or an advisor or investor is to just prescribe what you think. because when you do that work, you never know more than the entrepreneur actually knows in his or her space.
Jeffery: so that’s something you just got to be really aware of and do. you really hone in on your experiences from each of the roles that you had and take a lot of that learning to move it forward. And what I mean by that is, that you also have been part of co-founding businesses you’ve been at all different stages. so you’re not just bringing corporate experience, you’re actually bringing an entrepreneurial background. so you really can hone in on that with the founders. you can make them feel comfortable knowing that you’re not just a corporate guy. you’ve been all the way through this journey. so you can really help them better understand both sides of the fence. so how you can fit into this conversation, how you can guide them and again guide them versus tell them. But you can really slot in there nicely and build a rapport. Again, did you find that a lot of that came from the experiences you’ve built through over the years?
David: yeah, it certainly did. And what I’m finding to be true these days is if you take this kind of big Rubik’s cube of stage, like being either co-founder or big public company, it’s like one dimension. another is around the industry that it’s in the actual vertical. And then you take the third dimension of like the functional expertise that you bring any one of those three. you’re going to be left with a very small box in a very big cube and the likelihood that you have the expertise in the industry at the stage that they’re at is just really low. And so I often find my value-add is around trying to connect them with the people that are at that same stage function in the industry. And so that connector role I think over time becomes a more and more important thing. And so it’s frequently trying to recognize when you don’t have that expertise and plugging it in with people that do. And in the investment world, that’s pretty massive offering to be able to provide to a company. when they’re heavily focused, they’re going down this path. And then you come in help, guide a little bit. But you’re making connections. you’re networking. you’re helping them see a lot bigger picture than maybe they weren’t able to see. And that comes from again you, taking the time to learn and focus in the eight stages that you are in to make the right connections into the people and call them power people because they’re moving the world while you’re in there. so now you’re taking that start up that same level and trying to help them power their way through this big vast ecosystem. And I’m finding that from at least an entrepreneur to entrepreneur standpoint that many of them really do value the fact that you’ve been in their shoes before. And it’s something where the more recent that you’ve done it, I think the more relevant. And so, if it’s in an industry that you happen to know about, like for me, it’s maybe payments or it’s a you know fintech or something along those lines, then you should be able to help out a lot more because you have that relevant knowledge. But in terms of just really understanding like the challenge that they’re facing immediately, I’m a big fan of making sure that founders connect with people that are only maybe like a year or two beyond where they currently are in terms of stage, because the challenges are different. the tools you use are different. the environment is different. I think the worst thing that I could do would be to give them some anecdote from 20 years ago and then have that be completely irrelevant. like here’s how you build a software company. here’s how much money you need. it’s like that. stuff changes this, every year. I can’t even imagine what like 20 years of stale data would provide. And so you know, that’s something I definitely pay a lot of attention to.
Jeffery: so relevant insights. It sounds like it’s a really good direction to kind of help the startups. And I think maybe a lot of investors could learn from that is that it’s not always about the experience you had 20 years ago in a paper route or whatever. it might be that you’re trying to explain stories and it’s really trying to give more offerings of things that are going around at this current time within that one to two year range so that it’s more relevant to the founder who is working heavily in social media. whereas back in the day, telling a story about how newspapers work maybe isn’t the most applicable information that they’ve done. our founders get that all the time where they got to control the eye roll. don’t roll eyes. you must not but I’m sure that happens and hopefully I avoid some of the traps in doing that myself. it’s interesting you say that I remember a story of this is about maybe five years ago. But it was a founder that just stopped and said, look social’s huge right now and if you don’t know how to use it. it wasn’t Tiktok, like Instagram or Facebook. I don’t even know why we’re having this conversation. But, just literally stop the middle of an investment meeting to say that because just that frustrated that the room. I didn’t understand what all of these social tools were while they’re trying to raise funds. so I can understand the discrepancy between someone who’s trying to run and gun in this space and are using the more advanced tools to people that aren’t taking the time to learn them. And there’s a big disconnect on how you’re going to connect and move into these new environments. And when you started to branch your way into it and then all of a sudden you ended up at Harvard business school. what kind of got you into this space? so now you’ve built this amazing career. you’ve done a lot of innovation working for some of the top companies in the world. And then boom! you kind of shift into this whole entrepreneurial startup angel investing working as a resident in innovation. what kind of moved into that space and what got you excited about early stage?
David: Harvard. But I think anything Harvard would get me excited. But what kind of moved into this direction, it was a little bit of, I mean this is relevant for some folks that have a similar kind of choice in front of them, like I had been operating full-time flat out for now 15 or so years and I love the work. I actually sort of continue to really love that work. And so if anything, I’m a true operator at heart. But I did have an opportunity in 2015 after eBay and PayPal separated, and so I was running the PayPal Boston office at the time. And there was, I’ll be completely transparent about this, eBay and PayPal had just a very different strategy. And so those two companies separated, did a bunch of things. we had a number of people’s post our acquisition not have roles afterwards because the strategies were really different. And so I found myself in that bucket. so I guess have the rare pleasure of almost firing myself in that sense. But what I had done that year was rather than jump directly back into a startup, I did take a handful of roles where about a third of my time advising building, helping other startups throughout the ecosystem. a third of it now really cranking up on the angel investing side. And then a third of it spending time with student entrepreneurs. And I didn’t know this at the time. And I guess looking back now, it sort of makes sense. But working with founders, especially ones in the New England area where I’m based was a blast. and so during my four years as an entrepreneur in residence at Harvard business school, a lot of what we did was the one-on-one sitting with founders, trying to help them get to the next level, did a bunch of roles around coaching. so it’s not just the 30-minute doctor’s in kind of thing. and then you’re off to the next one. it’s actually sitting with teams over the course of the entire year like seeing their progress longitudinally. and then just building some other resources out for those teams where we pulled in like technical errs. and so stuff like that. and so it was a blast doing that. and then I found that working with student founders was so rewarding. I had done something similar at Boston where I’ve run the summer venture program for the last several years. and so that is a comparable sort of exercise. a little bit different in the sense that it’s an intense accelerator over the summer and it just timing-wise actually worked out because the appointment at HBS was just during the school year. and then the program at Babson was just during the summer. and so if anything, I was kind of leapfrogging from season to season. but I had one of those rare roles where over the summer I was locked away at a desk, working with other folks rather than being on the beach.
Jeffery: amazing. so you’ve pretty much spent the better part of the last seven years working with early stage founders on one on one helping them grow their business through summer through spring through all of the time periods. but really getting in there, in the thick of things right at that early stage and working through and finding the problems and helping them solve and move forward.
David: yep, it’s been for others that do this, whether they’re advisors or investors or current entrepreneurs that do a little bit on the side, I think you find that it is not only a great way to give back, but you learn so much by doing that. and so, if you’re sort of young at heart in the head. so just keeping yourself fresh, it is a really powerful way to stay engaged. and so I feel like I get more out of those interactions than I give.
Jeffery: that’s amazing. I’m sure the founders would say that they get a lot more out of it than they give. but being humble, I’m sure you learn a ton at the same time. but the energy level must be just skyrocketing when you’re being able to sit through all of these different new ideas and concepts and help that founder just inch forward every day, a little bit more into the realism of building that business.
David: yeah and there’s something. and maybe it’s a little bit of a mindset. but like there’s something about just sitting down with someone and getting on the whiteboard and brainstorming and trying to figure something out. and I kind of joke sometimes when I get back onto campus that when you’re at this age, you either feel very old when you’re there. or you feel very young when you’re there. and so I got to say every time I’m on campus I feel young, like I feel like I’m that same age just with the benefit of having the network and some pattern recognition. and so it’s very rewarding.
Jeffery: Well, I’m sure you’re passing as a 30 year old anyway. so you can pretend you’re a student while helping them. it’s going to pass no matter what. so they’re just going to love that.
David: sure, sure. No, we’ll hang on to the hair as long as I can, ah.
Jeffery: that’s awesome. so what I love about these last seven years is that you’ve spent so much time in the trenches that you’ve obviously built up a real strong base of seeing what you feel could be success or learning, what you think is going to be success by working with different founders. and when we talk to people all the time, investors, the first thing they say is, I’m always looking for a founder but I want a team. and you know that’s kind of their focus. but you’re way earlier than that. there’s probably a lot of the time where the team is just two co-founders trying to build something and it’s probably just a piece of tech. and you’re trying to decide. can this go to market? can this scale? and they’re trying to solve that same idea with you. is there maybe a few things that you could talk about on that early stage side of things that you kind of look for so that you’re not wasting your time? but you’re sitting down with those founders and you’re giving your time to open up and help somebody else learn and you know they may pivot 100 times but they’re going to eventually get there. what are the things that you’re kind of engaged with? and what are you looking for in that tech space of innovation that really stand out even if the founder doesn’t have the best business? what things are you looking for that kind of help those businesses edge forward?
David: yeah, I mean at one level, I think most investors have a similar sort of criteria right around the people, the product or solution, and then some market. and so it’s some combination of those three things. and ideally, you want all three of those things. and they’re weighted differently. and so I think you very quickly make the assessment like where are the gaps. and if it’s two co-founders working on something that they understand the space but they don’t know the tact rate, let’s get someone to augment that. and if the gap is around, we know that there’s some interesting product, or they’ve built something that’s interesting but they don’t know what the market is, like you got to really quickly figure that out. and so I’m sure you’ve also seen plenty of examples where someone falls in love with the thing that they built. but there’s no market for it. and so you got to help them figure that out and then sometimes it’s the ridiculous opportunity. and there’s this team that totally understands the space. but they haven’t touched any. they haven’t invented anything. and so, there’s all this risk around the building side of things. whether it’s team product or market, very quickly trying to figure out, where to fill some of those gaps is that’s one thing that we do. and then the other is having them understand as they build that venture, what’s the next credible path, next credible step that they could take. because you’re always at one particular stage. you have this really big vision. and I love the fact that your background is the mountains. and so the analogy I often have shared, and I stole this from someone else, that you got to articulate to someone what your summit is, and then what your base camp is. so the whole time, you are trying to orient someone whether it’s an investor, an employee or a prospective partner of a really big idea, and you’re the team that’s able to climb that mountain to get to the really big idea. and that next credible step is helping people figure that out. I think its a big part of this role. I think that’s so valuable.
Jeffery: it’s incredible what you’re doing and how you’re kind of facing that, like getting people to understand what that base camp is, or what that next credible leap is going to be, or the path that you’re creating. and I totally agree that that’s something that maybe founders don’t understand. and they need that coaching to get them there because that’s what’s going to generate the revenue. that’s going to generate the attention or that next steps. and I love the the mountain analogy because from the same perspective obviously, I love climbing mountains as well. but I kind of shape it sometimes and say you know, startup world is like a mountain. when you’re at the base of a mountain, there’s hundreds of trails that you can take to get to that base. and you’re going to take them and some of them might be sightseeing tours. and some of them might be boulders that you’re going to have to go back and tail back to get to the next one. but when you get to that base of the mountain, this is where things get serious. so you’re going to dabble around for a while, find the right people to get you to that right path. but once you get to the mountain, now you’ve got three paths. and you’ve got to pick that path that’s going to get you either to the top or to those next stages, like you said, that next base or that next camp. but as you go up, your options keep getting reduced. so if you’re not looking to go to the top, then you can kind of keep playing around. but if you’re interested to focus, and we talked about that earlier on which is all about focus. if you get that startup to focus to get to the top, that means that their whole business shifts into one idea, one concept, one problem and commercialized to get to that top peak, and hopefully you take the right path because there’s going to be another path that’s going to take you off and hopefully that doesn’t bring you back down the hill because then you’re starting all over again. but the mountain analogy, I really love that. it’s such a profound way of understanding that to get to the top, there is only one direction and you got to do that and there’s a team that gets you there. and then trying to figure out different ways to get there. you have to pivot like, what does that mean and how quickly do you iterate right before you run out of cash or something happens in the market. and so I think all of those are very apt lessons that startup founders, I think at least the ones I’ve seen the really good ones really understand how to do all those things. and they also recognize that sometimes the risk is not the technology. sometimes it’s the business. and so when you look at the different paths, every one of those stages, I guess if you correlate that with a stage of funding, you’re de-risking that whole time and trying to figure out how to get to this next stage, you got to have the right team for that.
David: so the tools change as you change in altitude. sometimes maybe that team member that was hauling a big piece of equipment, not so great in high altitude. and you got to figure out how to how to improve both the team and then yourself along the way. and sometimes the founder, maybe you’re not the one that has the skill set to bring you all the way to the top, and for me I actually know that there’s a kind of sweet spot in terms of my altitude. so it’s generally not the top of the mountain. just personally it’s also not at very base camp. I think for me it’s between sort of camp one and camp two is where my skills really kind of kick in.
Jeffery: I love that it’s a better part of the analogy where you fit into that scaling too, because you’re right. some can make it a thought. some founders can go all the way top their altitude, at the very peak, and they’re willing to do that journey. but a lot of the time, as a coach and yourself seeing this, you can probably also bet where you think some of those founders could go. and you might have to make that suggestion and say, you know what, I think you’re a fourth base camp. but I don’t think you’re the one that’s going to put it over the top. and you might if you’re going to go public and go to the markets. you might want to consider looking at this person or people or team to be able to get you that far.
David: yeah, exactly. and as an operator, I know that my sweet spot just to be very concrete on this, is generally from series a to maybe like b or c. so anything below, like earlier than that, my skills aren’t particularly effective. so, I know some other operators that are fantastic at getting things off the ground. they know how to clear the deck, whittle things away, get it launched, get something out there. and I know plenty of people that are fantastic are bringing it all the way to you know, now that we’ve got a 300-million-dollar business, that’s how you make it a billion and they’re just fantastic at that. that’s not my sweet spot. so, I’ve got like one particular one where you know, I know at this stage, I should be a little bit more, at least I think I’m a little bit better at that stage, and so I tend to be able to help out other ventures at a similar kind of stage.
Jeffery: Ah, that’s brilliant. and it’s good that you know that because you’re able to speak to it because that helps other startups, other investors know where to place you.
David: and I’m a firm believer that we all fit at stages, you’re going to go to a different group for series A. you’re going to go to a different group for series D. early stage is different as well. and each stage has a different value of learning, a different investor and those are the things that keep moving you, the up the notch on the mountain. but they also help you de-risk it as you go. so you kind of have to really put time into figuring out who are those people that fit at those stages you have, you bet. and it’s a lesson that you don’t, when you’re the founder and you’re climbing that, it’s really hard for you to tell them. so I think that’s what’s valuable. if you can get really good advisors, investors along the way, they can help provide some of that perspective.
Jeffery: I love it. so now you’ve spent all this time working with early stage. you’ve got the pocket where you fit into, help and focus these companies are all taken off. now you’ve kind of jumped into this new venture in the last couple years which is on the angel investing side. how do you now look at companies? some of the things that really stood out for me was one, the group you built to how this group works with startups. and I think the key term of all of this for me was Velocity Investing. can you share a little bit of about how you guys operate in this new stage in this level? because I think it’s pretty exciting on how you guys have approached this investment side.
David: yeah, Jeffery, appreciate the question. and I’ll also just clarify, I am not the founder of that. it was a complete group effort. the genesis of this was, just before the pandemic took off, a handful of us had sold our companies at the tail end of 2019, so purely coincidental and found that we had a little bit of time to kick tires on angel investment. and so, over the course of a pizza lunch. where we were just catching up and kicking tires on an investment, we had these realizations, like well this was great to be able to trade ideas like this, why don’t we do this more often? and so the intent was to do that a little bit more frequently in person. but that turned out to be the only first meeting that we ever had and we had started this group officially and launched it in April of 2020. and the idea was that this group of two dozen, so 24 angels mainly based in New England because that’s where a lot of us were at the time were, because we’re making these solo investments like why don’t we get together and create something where we can trade ideas and all that. and so that was genesis. if you fast forward to today, you know a year and a half or so later, we are just north of 200 angels and they’re all over the country. we have some international as well. we are continuing to make investments early stage and so we’ve done over 40 investments in early stage companies. a decent variety of founders as well because like this group is pretty diverse when it comes to the angel base. and so over a third of our CEOs are women. over a third of our founders are people of color. the industries are all over the map right, so digital health and marketing tech, and clean tech and consumer products and subscriptions. so there’s no thesis around the actual industry, but we are making these early stage investments in the 50 to kind of 250k range. each deal is wrapped into a single investment vehicle, so a single SPV. so when we work with founders, it’s just one line on the cap table. but the angel members that are part of it all are contributing on a deal by deal ad hoc basis. and so, you can lean in and say you know what, I want to do 20 investments this year, but I’ll do 2500 each kind of thing. and then others, where I’m going to make a handful but I’m going to put in some decent size checks 25 to 50k, maybe even 100k. and so that’s how our group’s evolved. and I think our biggest differentiator is really around the group of people that we’ve assembled. they’re current. they’re active. they’re relevant. they’re connected operators in industry. some of them are sort of classic serial entrepreneurs. some have worked for big companies and understand how the dynamics there, some are specialists in the sense that they have very specific functional expertise. so a lot of ex professional investors, attorneys and that kind of mix, we’ve gotten this group together because they’re current and active that we’re able to get access to different kinds of deals because we’re plugged into industry. we can do different kinds of due diligence because we’re deeper in that. and then most importantly for the founders because we’re in these industries. we can help move the business after we make those investments. and so that group itself, I think is somewhat unique. and one thing that was maybe kind of a byproduct of this is that we have angels of multiple generations. most of the other angel groups that I’ve seen tend to have sort of like a cluster of like a similar sort of age and stage of life. we have investors that are in their 20s and 30s and their 40s and their 50s and 60s. and as a result, it’s a very different group in terms of different perspectives. and I think that’s really helpful for founders. and because we operate more of a real-time basis, we’ve had to develop a handful of like tools and processes. unlike most other angel groups that are batch-based, where every month, every quarter something happens, we process stuff in real time. there’s a whole sort of thing behind how we try to make that work. and the active word is “try”. we are definitely trying a lot of different things to make that work. but it’s been fun, it’s a great group of people to be associated with.
Jeffery: well that’s amazing that you were able to put together this in such a short amount of time, make as many investments as you have and bring just as many investors that are new age and kind of bouncing through this space and jumping right into things and making it move quick. what’s the time frame that it usually takes for you guys to make an investment? and this is kind of where I was using the velocity term.
David: yeah. it seemed pretty quick 40 and a year and a half is pretty fast. Yeah, we’re definitely doing it a decent clip. the deal flow process, I think, is much like other groups. there’s an early screening process and all the way to due diligence and commitment, the way that we’re structured because of the real time nature of it, we can move a lot faster. in some cases, if all of the stars and all the planets align, then we can do things. like there’s one, this is an exception, but there was one deal that we had done from the moment that we saw to the moment that all the checks were wired and ready to go to the company from all the different angels was six calendar days. I don’t think of six business days or six calendar days and very unusual. but it’s because of this the setup, more typically it’s you know closer to about a month from the moment we see something. and maybe four weeks to six weeks is more typical. but we strive to be more agile and more nimble and we have hopefully, the velocity that we aspire to moving a lot faster. and I’m sure there’s lots of things that we could be doing a little bit better. but that’s what we’re shooting for.
Jeffery: that’s amazing. can you give us a little bit more understanding of what an SPV looks like? how do you structure them? does it make it better for you as the GP? or maybe just share a little bit about how that whole SPV structure works? and for the investors to give them a good idea we’ll talk a little bit about the mechanics.
David: there’s there’s actually very little that’s unique about us. I think in the last year, and then Jeffery you do more of this than I do, when you’ve talked to other angels that I think it’s actually a pretty popular mechanism these days, the way that our group is structured is, because it’s really member run and member driven, like there’s very few of us. there’s very little hierarchy. so which is another reason why I’m surprised. it’s kind of moving along the way, that it’s moving because there’s like very little structure. like each of us kind of volunteers to be on different committees and does different things. and you know being a software guy, I like doing a lot of the back end automation around software. but the SPV itself basically wraps together a bunch of disparate investments and puts it under a single entity. and then this way, the founder just gets that one check. and so, an example might be, if ten different angels wanted to opt into a deal, each of us wants to put in let’s say ten thousand dollars, it all gets rolled into a single account. and that hundred thousand dollars, part of it gets taken off because we use an external provider. and so think of that as almost like a transaction fee. so that comes off the top, the remainder pretty much goes to the company. and so at that stage, if we use actual numbers of a hundred thousand dollars, let’s say like 94 to 95,000 goes to the company right. and then each of the angel investors basically is prorating part of that cost just to for transaction purposes. so if I put in ten thousands effectively, I put in 9 500. but it’s a very effective way to get a lot of the expertise in just mechanically on the SPV front. we’ve been told by our portfolio companies that a big reason why they want to have folks like us associated with them is that because we have deep expertise in these different fields, that the value of having that person just associated and being a sounding board and just generally being available to the founder is extremely valuable. and so I think that’s a lot of the reasons why our founders want to work with TBD angels.
Jeffery: oh, that’s awesome and a great explanation. Again, how that SPV works I think it’s certainly a new way of making investments but it’s also great on the cap table. it helps the founders and again the depth and knowledge that a group of people can bring under one umbrella, it’s pretty significant. and it certainly helps that business move forward a little quicker.
David: Yeah, and it’s not all roses right. and I’m sure there’ll be another better way of doing so in a couple years but right now, that’s the way that we’re currently structuring things.
Jeffery: no, I love it. well I think in this case, we’ve really created a nice little story and journey of kind of where you’ve come from where you’re at and what you’ve been doing and currently right now obviously exceptional on working really deeply in these early stage companies and building a lot of investor groups around what you’re doing which is very exciting. we’re going to kind of transition now into which I love is this one story that really just kind of tops things off and always looking for kind of a way that you see early stage companies early founders kind of looking in and saying, is there a story that really resonates with you that our investor community can really get behind on what it takes to be an entrepreneur? and again, it could be a win, it could be a fail. we like wins of course. but the start of it is like really what does it take? what did someone have to do that just blew your mind and you couldn’t believe it succeeded and that she or he just really blew the top off all of it?
David: yeah, I’m happy to share a win. especially this is not my win. I have plenty of losses on my side. mistakes that I’ve made. and so, if you ever want to hear that sob story, I can share plenty of that. but one of the founders that we invested in, her name’s Lissy Hoo. she’s the founder of Careport Health and it was an early stage company. I think TechStars was one of the early investors, and so went through that accelerator. and the part of the journey that we really got involved was right around when they started getting their first customers. and nothing ever goes exactly to plan. so, you’ll see from most of these startups and investors, know this and entrepreneurs, know this, that there’s countless near-death experiences, and just making it through that experience from weeks left of cash to a big customer blew up, or whatever the obstacle of the of the day is. so in Careport Health’s case, we happen to have them in this innovation space that we created as part of PayPal. and so when I’m in PayPal Boston office, we created this innovation space called Star Tank, had desk for about a hundred entrepreneurs and it was basically open space that these startups could use right down in the middle of downtown Boston. and so Careport Health is one of those companies. and you know a handful of us that we knew, wrote early angel checks into the startup. and we’re talking you know ten thousand dollars kind of thing. and at the time, there was this pivotal time. just like in other startups, there’s this running out of cash. what do you do? how do you help out the company? and you know at that stage, this is where you pull in all of your supporters whether they’re advisors, fans, investors to help out. and so some of them were able to pony up some additional cash. some of them were able to figure out, well here’s another connection that would be helpful. some of them were helpful in terms of just helping her think through, okay, well here are the strategies, this is what we should do, here’s the sequence. and they made it through that near-death experience. they sold to all scripts and so that was a decent win from an angel investor standpoint. but the reason why I wanted to highlight this particular win was that she continued to grow that company. and so the mission behind that company was to provide a really easy way for patients to figure out where to stay after they stay after a serious surgery and how to find like a post-acute care facility. and so that whole startup was around connecting those patients with the places, the information that they needed. and what she had done was post acquisition, even though it was a nice win from an angel investor standpoint, continue to grow that venture. I think today she probably has a couple hundred probably, maybe even a thousand employees that are part of this particular journey. that one entity was then later sold to Well Sky and that was valued at a little bit over a billion. and so here’s someone from near-death experience to creating a unicorn and you know. I just love that because it couldn’t happen to someone who’s a better more genuine person and so you know so glad to have been there to just witness this journey for hers and maybe one little sort of anecdotal point was she was a a Harvard MD, MBA. and so I think she quit medical school. just one course shy of actually getting her degree, I think she later ran and later took that last course. but talk about not getting your medical degree from Harvard. she’s stopped that to do this startup. and so you know it gives you a little bit of sense of the commitment that she had to this venture making it successful.
Jeffery: That’s an amazing story. and I love the fact that she went back and finished it. so that’s amazing. you put all that hard work into something. you do want to complete it but then she stopped everything to build this company, went through the ebbs and flows but even after she sold it, she stayed to really hone in and take that value from the big arm or big company that supported her to make this even a bigger company. and I think that’s phenomenal because sometimes I think founders forget that when you do get the business that you built from scratch and you do get acquired and you get to this great spot, that there’s still a lot of energy in there to make it even bigger and better. and very few people get that opportunity and it sounds like she really capitalized on that. and I particularly like this one anecdote because I think we hear a lot in the news of people that do serial entrepreneurship. And it’s great. it’s fantastic you go and create the next thing. and maybe going back to the mountain analogy because like still staring at your background here that they’re really good at the base camp to camp, and they want to do it again. Fantastic. keep doing that.
David: and I think what we don’t hear a lot about is the founder that grows throughout the whole journey. and so for her, she was so enamored by the mission and felt so strongly about it and felt ownership over it that there’s plenty of room to keep on growing. and the fact that she stayed with that and continued to build that muscle and climb that mountain, just countless millions of lives being positively impacted by something like that. and so I think it takes entrepreneurs of all kinds and I just like sharing that one because it’s a little bit different from what you hear in other places.
Jeffery: oh, I completely agree. that’s amazing. and kudos to her for the success I think that’s brilliant the way she carried it all the way through and kept working with it. so amazing share. I love it. we’re going to now kind of transition into our rapid fire questions, alright.
David: bring it on.
Jeffery: we’re going to start with the business ones. so it’s pick one or the other. ready to roll?
David: yeah, yeah. I feel like I’m up at my eye doctor.
Jeffery: okay, a or b, right? easy choices. Alright, founder or co-founder?
David: co-founder.
Jeffery: unicorn or four-year 10x exit?
David: 10x exit.
Jeffery: Tech or CPG?
David: I got to go with tech.
Jeffery: Brand or Tech AI or blockchain AI? first time founder or second or third time founder?
David: veteran founder.
Jeffery: first money in or series a?
David: first money in.
Jeffery: angel or VC?
David: angel.
Jeffery: board seat or observer?
David: observer.
Jeffery: safe or convertible note?
David: safe.
Jeffery: lead or follow?
David: its a tough one. Follow.
Jeffery: equity or interest payments?
David: equity.
Jeffery: favorite part of investing?
David: with the founders, post investing.
Jeffery: number of companies invested per year?
David:15.
Jeffery: bam! you’re on the super high end. I love it. any preferred terms?
David: oh no. you know, I mean this is where it may be a little bit unusual. I’m at the stage now we’re really trying to be helpful for founders. so it’s not helpful for a small check to be dictating terms.
Jeffery: okay, perfect vertical?
David: its of focus. I happen to like industries where technology is a massive scale and massive lever. and so these tend to be block tech. so it’s fintech, edtech, healthtech, digital health.
Jeffery: and maybe you can give us two things we talked a little bit about this earlier on, but two things that stand out for you when you’re looking into a brand new startup?
David: two things that stand out. so I have to very quickly understand the team and the team dynamics. and so are there gaps? and then the other big thing I need to understand is that when they go to market, like what’s that combination of both the product and solution that gets them to the right market? so I think trying to envision what the eventual product market fit’s going to be, and there’s a whole series of questions around that.
Jeffery: awesome. I love it. Alright. we’re going to shift into the more personal side, bring it up or move. book or movie?
David: movie.
Jeffery: superman or batman?
David: ah, batman.
Jeffery: pizza pop or ice cream bar?
David: pizza.
Jeffery: five minutes with Bezos or Oprah?
David: Oprah.
Jeffery: I like it. Arsenal or Manchester United?
David: as a non-sports fan, I’ll have to say Arsenal because it came first.
Jeffery: Yeah, I like it. you’re only the second person that’s been an Arsenal fan. so you’re good at my books. I like it. Bike or rollerblades?
David: oh, bike. 100%.
Jeffery: Big Mac or Chicken McNuggets?
David: big mac.
Jeffery: trophy or money?
David: trophy.
Jeffery: a beer or wine?
David: wine.
Jeffery: alarm clock or mobile phone?
David: mobile phone.
Jeffery: hotel or hostel?
David: hotel.
Jeffery: king or rich?
David: oh, can you have both? can you be both? I know that’s the classic. you can’t do it. I’ll go rich.
Jeffery: concert or amusement park?
David: amusement park.
Jeffery: fortune cookie or birthday cake?
David: fortune cookie.
Jeffery: has trump been boring?
David: it’s been a lot saner, I’ll give you that. so I I’ll take that a lot the noise signaling has dropped a lot, the sanity has returned.
Jeffery: so very different, I love it. Alright. favorite sports team.
David: you know as a New York native that has moved to Boston, I now pull myself completely out of sports discussions because it’s not productive to live up here. [Music] Jeffery: alright, yeah good answer. favorite movie and what character would you play?
David: Ferris Bueller. I just completely resonate and I feel like I’m Cameron.
Jeffery: I like it. it’s a good movie. Cameron’s a great role. so yeah, it’s awesome alright. most famous person that pops in your mind? [Music] David: Barack Obama.
Jeffery: alright, first brand that pops in your mind.
David: Nike.
Jeffery: favorite book? one that I enjoyed the most was this, I can’t even remember the name of it but I’ve read it a million years ago. it was ‘On the Beach by Neville.’ Shoot. I think is the author. and it was this post-apocalyptic like thing and I had read it early on. but anyway so that was like one of the one of my favorites. ‘On the Beach by Neville.’ sheep is that right? Shoot. I think it is. Yeah. Shoot.
Jeffery: okay, I’m taking notes as we talk here. I love it. Okay, this is the the last question on the personal side, what is your superpower?
David: I think my superpower is being able to be objective to the sense where I try to take my personal incentives out of the equation. I don’t know if it’s really personal, it’s a business thing and it’s been tough, like I’ve definitely faced circumstances at work where I would have been better off personally if I made a certain decision. and I took the other path. and so at the time, it feels like it’s kind of hurts a little bit. but you have to live with yourself and you have to look at yourself in the mirror. and so at the end of the day, you got to do those things. and so they’ve done that a handful of times. and so I think that’s maybe a perspective that the novel, not a ton of other people have so, is that taking the emotion out of it, or is it putting more emotion into it. I think it’s looking at what should happen objectively. and so maybe I’ll give a case in point. there was one transaction that we had done where I would have been better off keeping my team sort of tucked under myself but knew that that would be the wrong thing to do because it wouldn’t give the others that exposure and sort of purposely minimize my own role to elevate others. and so you know that’s a direct hit on your pocketbook. but thinking that’s the right thing for the organization really tough to make that decision. so you’re almost taking the personal out or taking yourself out of the equation and looking at the broader scope of where something can go. and sometimes it’s hard to take yourself out of the equation because at the end, you want to benefit from this as well. but you’re looking at it from a bigger perspective on where this can go to the future, so you really have to pull yourself out. I think that’s where the objectivity comes in mind and I think that only happens over time. I think most of the roles I take now, I’m able to have that freedom and flexibility. I think for me and for other people earlier in their careers, they don’t have that flexibility. like you can’t jeopardize yourself and you can’t knowingly sort of put yourself at that kind of risk because that’s not the right thing for you to do to yourself. but I think frequently the reason why I think it’s a superpower now is I believe that I could be much more objective and then give the honest advice. this is how I would do it if I were you, and kind of take my own self motivation out of it.
Jeffery: I think that’s awesome and I think it also comes with, as you said, the experience and the time. but it also comes with the confidence that you’ve built up in yourself over time to be able to take yourself out of a transaction. be super objective because it’s for the better good and it’s really trying to align that up. and maybe a lot of times people go into panic mode and they’re not looking at themselves too much when they should be pulling themselves out of that. Yep, and maybe it’s a kind of a longer term view of things. I love it. Oh, I’ve got a million things popping in my head, stories of all these things that happen to me. I’m like, yeah, okay, I agree so very good. I think that’s brilliant. oh well David, I want to say thank you very much for joining us today. we learned a lot. as I always do, I took a million notes even though you can’t see that because of the mountain in the background. but again, super powerful. I learned a ton. I love what you guys are doing especially that last seven years of just diving in solidly into this early stage market. you’re a pioneer and you’ve done a great job and you’ve obviously proved that through all the investments you guys have made and all the great things you’ve done as an entrepreneur and as a business person. but again, I appreciate all your time and sharing the stories. thank you very much. and the way we kind of like to end our show is we want to give you the last word. so anything that you want to share to investors or to startups I turn it over to you. but again, thank you very much for sharing.
David: well Jeffery, thanks so much for being a fun and engaging host. I do feel like you and I could chat for a little bit. I don’t know if your audience would enjoy it but, I would certainly enjoy that. I think the only thing I’ll leave folks with is that, I am super passionate about just helping founders out. and so I did collect a handful of resources. so if you go to my website www.DavidChang.me , there’s a link called “startuptips.” and so it’s a link to a handful of resources I found particularly helpful for founders. some lessons learned, there’s a section with a list of investors. and so I constantly just update that part of the website just to help boundaries. I find that I’m answering a lot of the same kind of questions. and I would love to make this more scalable and put that knowledge power into founders hands.
Jeffery: that’s brilliant, and the url one more time is David Chang dot me?
David: yup, David Chang dot me.
Jeffery: I love it. Brilliant. thank you very much for sharing that. again you’re a superstar. keep up the great work and again thank you for all your time today. thanks again. great conversation with with David Chang. thank you so much. oh man, incredible the things that we got to learn from that. you know from his Goldman Sachs days all the way down to Tripadvisor early stage Tripadvisor PayPal, just all the different roles from product side marketing. he’s done a lot and what is really amazing is that he’s really honed in those last seven years on early stage companies and working in the trenches with these founders and helping them kind of grow their businesses then created his own angel group. well part of an angel group that really focuses on that same early stage investing. he’s done obviously a ton of investments over 70 of them. and just some of the things that really stand out of course, we really got into the whole being objective. objective when you’re inside of something, pulling yourself out and really exploring how you can build the better for the rest of the business or the rest of the teams, taking yourself out of that mix people product market. what are the size? where there gaps? how do you go after them? but he really did do a great job on breaking that out and really enjoyed just the whole idea of rapid fire velocity, investing talk a bit about that SPV side on how they do that. but again fantastic, and love the experience and knowledge that he’s gained in all these different groups – a true entrepreneur and investor. so David, thank you very much again for joining us. phenomenal background. again everyone, thank you for joining us today. if you enjoyed the conversation, please subscribe to our YouTube channel or follow us on Spotify, Apple Podcast and or Stitcher. you can also check us out at supportersfund.com or for startup events, visit opn.ninja. thank you very much everybody and have a great week.
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