Two in One
Finding an investor is great. But finding an investor who's also a mentor? Now you're talking.
The fact that investors bring much-needed capital to start-ups
is a given. The fact that investors can bring even more vital
advice and business guidance to start-ups, however, is less
well-known. But for Kevin Chang, 40, and Larry Mana'o, 39, of
Detto Technologies
Inc., a provider of data and customized settings migration
technology, bringing in investors meant bringing in mentors to help
grow their business.
The Bellevue, Washington, entrepreneurs made a first round of
funding in 1999 and 2000, during which they sought traditional
investments. Then in the second round, explains Mana'o,
"We were looking for investors who [could provide] a more
practical [approach] and a reality check in terms of the
business."
During this second round of funding, the partners looked for
angel investors with the right business experience. Jeffrey Wu of
New Sea Equities
LLC in Maspeth, New York, fit the bill. Wu had owned and
operated businesses in the past and had recently invested in
another technology company, so Chang and Mana'o knew they'd
found both the investment and the business wisdom they sought.
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Wu and Michael Yung, also from New Sea Equities, felt the
connection as well-and invested in Detto in 2001. "[They]
really got us to focus on the operational side of things,"
says Mana'o.
"When we came in," recalls Yung, "we [told Chang
and Mana'o], 'Focus on what will get you your revenue
first.'" While other businesses were spending all their
time and money on fancy management teams and operations, Wu and
Yung advised Detto Technologies' founders to focus on revenue
and long-term sustainability instead.
The investment-cum-mentorship relationship between Detto
Technologies and its investors has paid off-Chang and Mana'o
estimate $5 million to $10 million in sales this year.