Ideas to Invoices Archives

By LAURA LOREK
Publisher of Silicon Hills News

Chris Burney, Executive Director of the San Antonio Angel Network, courtesy photo.

San Antonio has always had angel investors but it hasn’t had a formal network for a while, but a year ago that changed with the formation of the San Antonio Angel Network.

“A group of local investors, visionaries, entrepreneurs got together and hatched the idea that San Antonio really needed an angel network to help with all the growth we are experiencing in our startup ecosystem and beyond,” said Chris Burney, executive director of the San Antonio Angel Network.

Previously, Burney worked as a manager and senior financial analyst for Rackspace, the San Antonio-based Web hosting company.

As the head of the San Antonio Angel Network, Burney evaluates deals, recruits new members and runs the organization, which is based in the RealCo Seed Fund Program offices at Geekdom in downtown San Antonio.

On this episode of Ideas to Invoices, Burney discusses angel investing in San Antonio and the details of the deals the San Antonio Angel Network looks for when evaluating a startup.

The San Antonio Angel Network’s 75 members consist of accredited investors or wealthy individuals, ranging from large family offices, successful entrepreneurs, business owners, doctors, accountants, and lawyers.

“The diversity of our network is one of its strengths,” Burney said.

The San Antonio Angel Network, a nonprofit organization, is still accepting members but plans to cap membership at 100. Individual members pay $1,800 and corporate members pay $2,500 a year.

“Those dues just really help us be sustainable,” he said.

The San Antonio Angel Network uses a pooled investment vehicle that allows angels to invest a smaller amount in lots of deals, Burney said. That allows them to write checks in a startup for as low as $5,000, he said.

“Angel deals are inherently risky even with the best due diligence and best entrepreneurs,” he said. “We expect a high rate of failure. But we also expect a high rate of return for our investors.”

Every six to eight weeks, the San Antonio Angel Network hosts pitch events with two or three startups pitching to investors. Entrepreneurs can apply directly on the San Antonio Angel Network website. It reviews applications on a rolling basis and it doesn’t require a fee to apply, Burnet said.

“We have no geographic limitations on the companies we will fund, or invest in,” Burnet said.

The San Antonio Angel Network has invested in three San Antonio startups and one in Austin so far. Its first deal was in HelpSocial, a social media software systems startup spun out of Rackspace and founded by Matt Wilbanks. The second investment was in Parlevel Systems, which is inventing new vending machine technology, and the third one was Dauber, a dump truck logistics, and technology company. And its Austin investment is Localeur, based in Austin, which is an app that provides recommendations from locals headed up by Joah Spearman.

“Almost every major city with a thriving startup ecosystem in the state has an angel network helping support the entrepreneurs,” Burney said. “San Antonio did not have that until we came around. We know for a fact that we were missing deals and that companies were either not getting funding or moving elsewhere because of the lack of investment resources here.”

The San Antonio Angel Network is part of the Alliance of Texas Angel Networks, comprised of 13 angel groups across Texas. Last May at the Hotel Emma at the Pearl, the San Antonio Angel Network hosted the annual summit of the Alliance of Texas Angel Networks with more than 100 investors from all the groups to discuss best practices and angel investing across the state.

The San Antonio Angel Network tries to be a very friendly entrepreneurial network, Burney said. It tries to get the application and due diligence process down to weeks, instead of months and to get the entrepreneurs that meet its criteria in front of its investors as quickly as possible, he said.

The San Antonio Angel Network will look at any deal with a scalable business model that will provide a good return to its investors, Burney said.

For more on the San Antonio Angel Network, listen to the entire podcast and please subscribe, rate and review Ideas to Invoices on iTunes. And support the podcast on Patreon for exclusive content only available to subscribers.

Chris Treadaway, founder and CEO of Polygraph Media courtesy photo.

Chris Treadaway doesn’t chain smoke or drink cocktails all day at his office at WeWork at the Domain.

But he is living a Modern-Day version of Mad Men, the AMC TV series that dramatized the lives of ad men in the 1960s at a fictional New York advertising agency.

Today, Treadaway is involved in the rapidly changing advertising technology industry. He founded Polygraph Media, with the idea of bringing transparency through data to advertising in 2011. The company today has 10 employees and it helps large brands execute massive advertising campaigns on Facebook.

Previously, Treadaway worked as group product manager of Web strategy at Microsoft. And he was a co-founder of Startfor, a global intelligence firm, based in Austin.

In this interview on the Ideas to Invoices podcast, Treadaway discusses how Polygraph Media has created Internet advertising technology that drives traffic and revenue via Facebook advertising for customers like McDonald’s, Fox TV and Six Flags.

The company, which started out at the Austin Technology Incubator, is bootstrapped and raised a seed round of funding from friends and family. It is profitable, according to Treadaway and plans for dramatic growth in Austin. It is hiring, particularly software developers focused on advertising.

It hasn’t been all smooth sailing for Polygraph Media. The startup put in 11 applications to get access to the Facebook Ads API before it got access, Treadaway said.

Next, Polygraph Media put in eight applications to become a Facebook advertising partner. Facebook acknowledged the company as an advertising technology partner in December of 2016. It is one of 81 companies in the world. It is the only one that hasn’t taken institutional capital, Treadaway said.

“We’ve been able to achieve some very big things thus far and so now we’re growing the business very rapidly,” Treadaway said.

Along the way, Polygraph Media has pivoted a few times. Its first product was a local advertising system, aimed at small to medium sized businesses. It signed six newspapers as customers.

“We kind of got whacked by Groupon,” Treadaway said.

Groupon came into the market with a simple and elegant minimum viable product for customer acquisition, Treadaway said. So, Polygraph Media redefined its product around data and analytics. That pushed the company into the path of advertising and that’s where it found where it fits in the world, Treadaway said.

Its flagship product is called Commander and it is an interface into a data platform that enables large scale advertising campaigns on Facebook for big customers like McDonalds, Cheddars and others.

Through its Commander product, Polygraph Media helps brands go from spending $1 million a year on Facebook ads to $10 million a year, Treadaway said. Its platform handles all the complexity involved with that, he said.

Last year, Polygraph Media powered 3,200 stores worth of advertising for McDonald’s.

“People do not let us into McDonald’s very easily or another similarly sized company,” Treadaway said.

Polygraph Media must provide a lot of value to service those large customers, he said.

“These are investments to these brands” Treadaway said. “Advertising is no longer about throwing money at the wall and hope something sticks.”

For the past few years, Polygraph Media and Treadaway have focused on having an investment mindset. Treadaway must quantify how his company provides better returns than what the company might achieve on its own, he said. He’s able to do that through the company’s proprietary data platform, he said.

“Us entrepreneurs if you can think from an investor perspective about your decisions and to frame things that way you’re going to be in a better place,” Treadaway said.

Facebook has thousands of targeting permutations, Treadaway said. Polygraph Media can test different versions of an ad and find the right customers for the right companies to produce outsized returns, Treadaway said. That means more customers in the doors of stores buying their products and generating more revenue.

Facebook has 17 ad types that Polygraph Media taps into today, Treadaway said.

Being platform dependent on Facebook is a risk for Polygraph Media, but the company is actively pursuing ways to mitigate that risk, Treadaway said.

For more on the interview, download and listen to the podcast. Please rate and review the podcast on iTunes.

Tag: Ideas to Invoices

Chris Burney with the San Antonio Angel Network Discusses Angel Investing on Ideas to Invoices

Polygraph Media is Disrupting the Advertising Industry through Data and Analytics