20 Jul Choosing the Winning Formula

One question that I frequently get asked since we started a small creative fund is:  What do you look for in a potential investment ?   This complicated question actually has a simple answer.  We look for three things:  #1: Founder #2 Founder #3 Founder.

This simple answer didn’t come easy.  Those three things might have also included “Brilliant Idea” and “Scalable Business Model.”  But now, I streamline it to the answers I have above.  The reason is simple.  A great founder can make a mediocre idea successful, but an inept founder can tank a brilliant idea.  And very badly at that.

We might be an anomaly, but from Day One when we started investing, we never looked immediately at exit strategy or what the ROI would be.  Don’t get me wrong. It’s called an investment because we want to make money.  But our starting point is rarely solely based on that.

Our first investment was made to a founder of a digital agency in Taiwan.  It was called wwwins.  The founder, Jean Lin was a friend.  She was a seasoned advertising executive and well known in the industry having worked for multi-national brands in Asia such as KFC, P&G and General Mills.  When she wanted to shift the focus to digital, she faced a major road block internally.  Management didn’t believe a digital function had to be carved out.

So in 1999, Jean left the company that she worked at since graduating from college, regardless of the fact that she was slated to be the head of the region. That was when wwwins, a digital agency was born.

We were one of wwwins’ very first investors.

As with any startup, it was a bumpy road ahead. But Jean was a strategic thinker, not just looking for short-term gain, but growth.  Before long, she had an office both in Taiwan and China.  Her analysis of the market made her bet heavily in China as early as 2002. She even moved herself to the country.  There, she was able to scale with brands looking to reach their consumers in an exploding market.  For these brands, digital strategy was not an added value, but a necessity.  The strength of wwwins was its focus on digital, and it became known as a formidable expert in that space.

Global holding companies came calling, and there were many.  But Jean carefully decided to go not with any of the usual suspects and decided to align with a UK company known to nurture the executives of their acquisition.  wwwins operated several years independently and as Jean’s responsibility within Isobar grew, it was eventually absorbed into Isobar with wwwins being the foundation for expansion from Asia to the world. Jean became their first APAC CEO and eventually added dual responsibility as Chief Strategy Officer in 2009.  Fast forward to 2011. Isobar, a relatively small player in the market was bought by Aegis, one of the largest media holding companies in the world.  In 2012, Aegis was acquired by Dentsu, creating in essence the largest advertising group in the world.  In 2014, Jean was appointed as the Chief Global Officer of Isobar, overseeing 85 offices around the world with 5500 employees.

So, as an investor, did we make a killing with each of these transactions ?  Should we have exited when we did ?

The truth is, we exited right when the company was stabilizing and increasing in “value.” It was definitely not the normal time to exit.  But when Isobar approached Jean for acquisition, it had to be a 100% transfer of shares with Jean staying on.  As an angel investor (and indeed we were one), it was important that we were creating a larger platform for Jean the founder to realize her vision: to scale digital as a category in a space that sees it only as a function.  The multiple was secondary.

If we look at it strictly only as a financial investment the ROI was a modest one. Looking at where Jean is right now as a founder we invested in, we struck platinum.