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Friday November 28, 2014

UltraLight: Four Top NY VCs Discuss 2013 Investment Trends

Bradley Harrison, Eric Hippeau, Geoff Judge, William Reinisch (photo: L. Keyson)

Bradley Harrison, Eric Hippeau, Geoff Judge, William Reinisch (photo: L. Keyson)

By Lauren Keyson

This is a great time to start a technology business, according to four expert NY venture capitalists at Ultra Light Startups Investor Feedback Forum Thursday night. In addition to advising entrepreneurs, investors discussed 2013’s growth sectors. Unsurprisingly, they all favored the same technology arenas.

Eric Hippeau of Lerer Ventures said he is looking for anything that’s disruptive and technology-driven. “But it has to be a new idea, it has to disrupt existing markets, and it has to create new markets — hopefully. Game improvers just don’t make it – you have to be thinking new and fresh about how you’re going to serve customers in a completely different manner.”

He likes social and mobile, and is particularly interested in B2B online marketplaces. While he does not necessarily follow health, he just committed to a healthcare deal, “Because it’s a consumer technology that is being used in the healthcare field.” He also doesn’t plan to invest in new social networks, but thinks Sony’s use of social technology to disrupt marketplaces is very interesting.

Geoff Judge of iNovia Capital is also looking at startups that are disruptive and will have a lot of customer demand. “I can give you a great idea of a company we’ve been in for a couple years – PEX Card – and that still doesn’t seem to have any competition in the FinTech sector. It’s a prepaid corporate card. People are very familiar with prepaid consumer cards. But this is for businesses. Most credit cards you’re borrowing money, so that’s where all the risk is and banks are very tight in terms of lending to businesses. So you can’t get a big enough line of credit for your business, even though you have good cash flow. With PEX you basically put your own money in a deposit account and issue as many cards to as many employees as you like. It’s all online and people absolutely love it.”

He also sees a lot of good ideas coming from the AdTech space, and likes that because online advertising and ecommerce continue to grow at prodigious rates. He also is thumbs up for ecommerce on mobile. He cited one of his firm’s investments, Chango, which providers programmatic marketing solutions for real-time digital advertising and big data. “It’s growing hand over fist. Our largest company in New York is Collective, which has a very large ad network but is really a big data company. It collects anonymous data on hundreds of millions of users on a monthly basis, and really focuses on brands and targeting their advertising much better. We see over a thousand pieces of data on all those IPs so it’s very effective.” He also likes Bizu, a company fueled by proprietary demographic data that helps brands measure the effect of their online advertising.

Bradley Harrison of Brad Harrison Ventures just made an investment in a mobile ad technology called the Adcade. “We’re pretty excited about it. We invested with John Frankel and the guys at FF Ventures. I think it’s the most unique, engaging mobile ad form that I’ve ever seen. They have a technology built off Captcha that they developed and innovated.  It will change the way people interact with mobile advertising.”

William Reinisch of Paladin Capital Group, a multistage VC said, “In our firm we try to focus on areas we know; around things like cyber security, infrastructure, enterprise infrastructure – the things that provide benefits to both public and private sector customers and certain energy companies.” One of his data space favorites is a receiving company that focuses on Cloud migration called Racemi.com. It develops solutions for data centers’ deployment and management. It also provides cloud provisioning, migration and data center automation capabilities.

Hippeau summed up 2013’s investment outlook by saying,”It’s a good time to be an entrepreneur, there’s lots of support for entrepreneurs and lots of money, so good time to start a company.”