Strategic Business Partnership, Angel Investor and Venture Capital
Today we welcome Jonathan Hung, and to set the tone ladies and gentlemen I'm not sure that there's a place to graduate that Jonathan hasn't graduated from. He has several degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania, one of the best schools.
Jonathan Hung is a transformative Los Angeles angel investor and venture capital partner who believes in a bright future for businesses seeking to broaden their horizons in North America and Asia. In support of this mission, he serves as Co-Managing Partner at Unicorn Venture Partners and Senior Venture Partner and Head of Due Diligence at Expert Dojo providing a hands-on approach to supporting companies by offering his strategic expertise and operations management.
In this episode, we’re discussing…
[3:26] His background investing and his experience on his family business
[4:52] What is exactly an angel investing
[5:57] Angel Investing vs. Venture Capitalist
[8:40] Why is easier and cheaper to get or ask for an angel investor
[10:13] How can people find an angel investor
[12:38] What are some of the due diligence strategic questions he asks to entrepreneurs/startups or people who want angel investor
[18:01] What unicorn is?
[20:07] When to look for an angel side or venture side
[22:00] The importance of looking for a mentor, a team, so you don’t make mistakes
[24:41] The guidance and the advice he gives when he invests within a Company and the importance of helping them to improve
Jonathan’s Top Tip’s
“Each of those institutions helped me get better as an investor because I know that I'm not the smartest guy in the room, but I know where they are. And I like to make sure that this is the room I want to be in. If like I'm the smartest guy in the room, I got to get the hell out of that room. Because it's not enough I need other people who are better at due diligence or financial modeling or like product development or marketing to help get me whether it's a consumer product or enterprise product”
“Angel investing is totally different than being a venture capitalist, I would say, it requires a different type of skill set. Because, for running a venture fund, you have to be good at raising money from other people, it’s called OPM other people's money. And of course, you put like a little bit of your commitment into it.”
“And it is so much easier, than going through a fund, but I don't mind paying fees, if we're all making money together, I don't mind paying for other people, because it's just, you got to make money, you spend money to make money. That's how I always viewed it”
“I look at four key things when I look at a company whether I want to continue diligence further and bring in other people, I'm number one for me as a team. I mean, it's so important looking at who the team is whether they have experience in that sector or they have the right educational background”
“Number two, I look at the idea, I mean look it is something where it's like Hey, is it some sort of code that makes sense that I don't know about other changing the game whether it's an enterprise play or direct consumer play there's something different that you don't see in the marketplace?”
“Then three and four are kinds of interrelated. You look at the revenue for growth, and the customer growth, because sometimes, a company could have so many users, but they're not making any money, which is totally fine”
“I sometimes see projections and I don't care about your five-year projections, or your three or four years, because they make no sense you're going to be pivoting like I just want to see how you get from zero to 100,000. And then from 100,000 to 1,000,00 4 million to 10 million, because that's your trajectory, that makes sense, that's how you grow, that you're actually coming up with a business model that makes sense. So that's what I would always look for those four criteria when evaluating a company that will start”
“Unicorn is basically a seed pre-seed and series, a venture fund, that three partners came together three family offices, we don't have outside capital, so it's only our own money that we're investing in, we try it. So, it makes it a little easier, in terms of like, making decisions. And we don't have to be like, oh, we have to do this in a certain amount of time. And we have to worry about raising and money”
“I'm not investing to be your best friend; I'm investing to help you get to the next stage. Like, it's not like when you have coaches, like, it's like, oh, they just give you all this praise, and you never improved, you know, like, you have to point out what the weaknesses and where we can improve to get to the next goal. I mean, that's just so much more, because why hire a coach, you don't just hire a coach, they tell you, you're great”
“The issue when it comes to tech was like, you're just not certain, you know, and you're not certain of this team. This is the right team to get you through there. So that's why you ask for a lower valuation because nothing's proven out. Like, listen, if Elon Musk wants to raise money for the next company, he's going to get whatever valuation he wants, right? Because he's proven he's been there. He's done it before and time and time again”
Resources from Jonathan
Angel Investor Jonathan Hung | YouTube | Facebook | Twitter | Instagram
ABOUT JONATHAN HUNG
Jonathan Hung is a transformative Los Angeles angel investor and venture capital partner who believes in a bright future for businesses seeking to broaden their horizons in North America and Asia. In support of this mission, he serves as Co-Managing Partner at Unicorn Venture Partners and Senior Venture Partner and Head of Due Diligence at Expert Dojo provides a hands-on approach to supporting companies by offering his strategic expertise and operations management.
Jonathan has several degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.