“5 Things I Need to See Before Making a VC Investment” With Scott Robinson of Plug and Play
“I think the most common frustration on my end has been missing opportunities for investment merely based on the economics or how expensive a deal might turn out to be. Looking back, there were certainly a few deals we missed as the pricing was on the higher end of our spectrum and as we operate as a family office, we rarely write checks larger than $500k. Two of these startups in particular would have been great successes and a significant multiple for us, so our take away was to try and remove the handicap of cost relevant to the upside and opportunity.”
I had the pleasure of interviewing Scott Robinson, VP, Founder of Plug and Play FinTech and Board Member of Plug and Play Tech Center. Scott leads the Financial Technology activities at Plug and Play which has included over 45 investments, 35 large financial institution partners and accelerated over 160 startups globally. Scott’s global initiatives include a joint accelerator program with BNP Paribas in Paris, France, a program in Abu Dhabi with Abu Dhabi Global Markets, as well as New York, Tokyo and more.
Thank you so much for joining us! What is your “backstory”?
In 2008 I graduated from UCLA with a history degree expecting to enter law school. I managed to get a job managing commercial real estate on behalf of a large temporary staffing firm with hundreds of locations across the United States. Dissatisfied with the nature of the job, I learned to code in the evenings and applied these newfound skills into an audit project I initiated across our utility consumption of each of the staffing offices. Through this audit I mapped consumption based on square footage and volumes of energy, water and other utilities. During this project I uncovered a multimillion dollar embezzlement scandal, recognized the importance of technology and would eventually jump ship to join startups across industries like media, education and more.
I eventually landed at Plug and Play and began to help them with their web, content and CRM responsibilities but was simultaneously engrossed in the bitcoin and blockchain space. In 2013 I began to host the world’s first bitcoin meetup and initiated a project to help startups scale their companies across the bitcoin domain. This project escalated quickly and transitioned into greater fintech activity in 2015.
Since the launch of our FinTech activities, we’ve built out an amazing array of amenities and opportunities for startups that are within the spectrum of seed to growth stage. The platform we’ve created offers investment, business development and networking to entrepreneurs in an effort to help round out product, expedite and optimize client opportunities and enroll enablers like other VCs or channel partners to help the startup succeed.
Can you share a story of your most successful Angel or VC investment? What was its lesson?
We worked with an entrepreneur who had a number of very successful exits in the past 20 years (two north of $1B). As it is common for experienced entrepreneurs to scoff at accelerator programs, this was a great example of how we operate differently than the traditional accelerators in the market but had to exhibit the difference prior to coming to terms for an investment. After a 12-week curriculum of intense introductions and pitching opportunities, the startup wound up landing a series A lead, multiple partners and a couple of pilots to roll out their software. In this case we had lined up a number of strategic opportunities prior to the negotiation for the investment, so the takeaway lesson on our end was to continually exhibit help and support as a “pay it forward” tactic, regardless of the investment opportunity outcome. Even if we were unable to invest, the entrepreneur’s influence and experience brings value to our ecosystem.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
I think the most common frustration on my end has been missing opportunities for investment merely based on the economics or how expensive a deal might turn out to be. Looking back, there were certainly a few deals we missed as the pricing was on the higher end of our spectrum and as we operate as a family office, we rarely write checks larger than $500k. Two of these startups in particular would have been great successes and a significant multiple for us, so our take away was to try and remove the handicap of cost relevant to the upside and opportunity.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn?
We had an opportunity to invest in a company based in SE Asia that was quickly churning up traction and hit a match to the market very quickly. This company was founded by the same entrepreneur who we had invested in years prior that had converted a successful exit. Unfortunately, we passed on the opportunity when it came down to understanding the market. We should have trusted our gut in the situation based on our prior dealings with the founder.
Which person or which company do you most admire and why?
There are a few investors for which I believe have exhibited a lot of success in both their investments and community impact. I would say I admire the methods and successes of Social Capital’s Chamath Palihapitiya, who comes from a background in tech with Winamp and obviously Facebook among others. SC’s impact on the startups they work with and the conversion of success is unparalleled and to me represents the Silicon Valley standard for investors.
How have you used your success to bring goodness to the world?
Bitcoin and blockchain represented to me a fundamental paradigm shift in the way value was managed globally. There are currently 2.5 billion people who are underserved in financial services and the reality is the technology is here and available to extend and enroll this segment into the global financial infrastructure. With this in mind, much of my investment philosophy is built on the premise of creating financial opportunity and wellness to match the needs of a virgin market that could bring magnitudes of more economic value to the world. My hope is to enable world of easily available open source financial services and applications.
What are your “5 things I need to see before making a VC investment” and why. Please share a story or example for each.
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. :-)
I’ve always wanted to have a conversation with the Oracle of Omaha, Warren Buffett. There are few folks who have been more consistently successful among the financial services industry and his investment and management wisdom would be invaluable.
Originally published at www.huffingtonpost.com on January 11, 2018.