Mark Kolb, entrepreneur in residence at Tech Council Ventures (Summit), joined Jasmine Hoffman, the head of experience at TechUnited:NJ (New Brunswick), for a discussion entitled “It Takes Integrity: From Entrepreneur to VC with Tech Council Ventures.” The two spoke at Propelify on October 8.
Tech Council Ventures is an early-stage, mid-Atlantic investor. It’s “a very engaged investor,” Kolb said. “We really view ourselves as partners with the entrepreneur. Our objective is to invest in companies that we can really help make successful.”
The key to being a successful VC is building a personal brand and having integrity, he told the audience.
“That notion of doing what you say: I don’t know of anything more important in the world.” He added that his fellow VCs at Tech Council Ventures, Jim Gunton and Steve Socolof “have personal brands, and I certainly hope I’ll be able to prove that over time.”
Kolb himself has made the journey from entrepreneur to VC. Unlike today’s entrepreneurs, when he started his first business, he had never heard of venture capital. “If somebody had asked me, I wouldn’t have known what it meant,” he said. Kolb was working for a large computer company called Digital Equipment (Maynard, Mass.), departed to start his own consulting business, and was joined a year later by his then-girlfriend, to whom he sold 20% of his corporation for $5,000. “We later married,” he said. “That $5,000 turned out to be a really good financial investment.” For several years, they ran what Kolb described as a “lifestyle business,” with maybe 30 to 40 people.
One day, Jim Gunton, then with Edison Ventures (Princeton), knocked on Kolb’s door and asked if he was seeking growth capital, which he wasn’t at the time. A few years later, Kolb switched his business direction, so he contacted the VC. “We ended up with some terrific board members,” he recalled, “one from LLR Partners, one from Edison Ventures. They really supported the growth of our company.”
The company was sold to Patni Computer Systems (Cincinnati), and Kolb stayed on for three and a half years. After his departure from there, he consulted with early-stage businesses and joined a couple of boards. From one of those boards he received an invitation to become CEO, and after a few years, he sold that firm to a publicly traded healthcare company. Kolb later started a company based on a medical device that he and his partner had invented and patented. “All in all, I’ve held a half dozen CEO roles, either in the pharma IT or healthcare IT space, or the medical device space.”
With all of his experience obtaining investments, Kolb became intrigued with the idea of sitting on the investors’ side of the table, rather than the entrepreneurs’ side. During this time, he was doing some angel investing, and he would consult with Gunton about various deals. He became aware that Gunton and Socolof were finalizing Tech Council Ventures, and initially aided the duo on a part-time basis, helping to raise funds. In 2019 he joined full time.
What Makes a Great VC?
Kolb said that there were a lot of similarities between angel and venture investing. “Certainly, you can be investing in companies in the same stages,” he said. “In fact, with Tech Council Ventures right now, we often invest alongside other angel groups.”
But what’s the difference? “The main thing with angel investing, you’re investing your own money. What that means is, it might be very personal to you, but you also have the ability to take a flier if you want to. And, obviously, with venture investing, you’re investing the capital of your limited partners. You share the responsibility through your limited partners, you need to make decisions investment-wise and otherwise based on what’s best for the fund.”
He added that, as an angel investor, you’re doing a lot of diligence, but you can only do so much, especially if you also have a full-time position with a company. With venture investing, “You really dig into these companies.”
Hoffman asked Kolb what makes a great VC, and he responded that it was acting quickly, but smartly, and with integrity. “The first thing is, it’s hard work. My partner Jim says, ‘VC is 24/7.’ He’s absolutely right. You’re always paying attention. When a good deal appears, you’ve got to be right on it. When a good deal appears, you call and say, ‘Can we meet today? Can we meet tomorrow?’ Not next week. By next week, somebody else may have it. So, it’s a lot of hard work, it’s a lot of discipline and drive to get a deal done. It’s discipline and lead gen [generation]. Lead gen, when you think about it — we’ll look at 100 companies and invest in one of them. The point is, we need a pipeline of a lot of deals, and our job is to find the very best one. So, diligence and lead generation are crucial.”
Looking ahead to 2021, Hoffman asked Kolb what companies or innovations Tech Council Ventures would be looking for. “We’ve got a good pipeline of deals, COVID has not slowed us down, fortunately,” said Kolb. “We’ve done a couple of deals since COVID. We’ve got a couple of deals in final stages right now.” He mentioned that a drone company had recently piqued his interest, and this particular company is building drone-charging infrastructure. Then there’s another company that builds four-legged robots. “It’s an exceptional time to be sitting here and looking at exciting businesses.”
Kolb concluded the discussion with these wise words: “If you’re looking at investing, it’s all about the entrepreneur, it’s all about the team. If you take a first-class team with a second-class product, they’ll pivot and make it work. Beyond the investment, it’s all about the people.”