Triangle Tweener Talks

00:00:04 - Announcer
Welcome to Tweener Madness, the high stakes startup showdown where eight promising companies go head to head for a $25,000 investment prize from the Triangle Tweener Fund. But before the competition kicks off, let's meet the people making the tough calls. The judges. In this special meet the Judges episode, we're sitting down with the investors and industry leaders who will be asking the hard hitting questions, evaluating the startups and ultimately deciding who moves forward in this bracket sty competition. Each round, three judges will vote on which startups advance leading up to the finals in early April, where one company will take home the top prize from the judges. You'll hear about their backgrounds, what they look for in a winning startup, and maybe even get a little inside scoop on their decision making process. So if you're a founder looking for investment, an entrepreneur curious about what investors really want, or just someone who loves a good business battle, you are in the right place. Let's meet the judges. Here's your host, Scott Wingo.

00:01:06 - Scot Wingo
Randy Meyer, thanks for joining us. You are one of our illustrious selection committee members for Tweener Madness. We're excited to have you.

00:01:13 - Randy Myer
That's very nice of you to ask me. And I, I looked at the list of others and I feel very privileged to be part of that group. It's a good group.

00:01:22 - Scot Wingo
Oh yeah? Yeah. It's got a, it's interesting because it spans kind of like the 80s to current. So I, I like, I don't know if you follow the podcast, but I like this multi generational aspect of the triangle that we have where every generation kind of does their parts and stands on the shoulders of giants. Kind of a setup.

00:01:38 - Randy Myer
Yes, yes.

00:01:40 - Scot Wingo
So you're kind of a legend in the triangle, but I'll, I'll pretend I don't know your backstory so we can, we can go into it. So folks that don't know you, so let's start with your personal background, kind of how you got to be in the investing and entrepreneurial world.

00:01:53 - Randy Myer
Yeah, so when I, you know, out of college and out of business school, I ended up in the 80s going into consulting and, and had a great run, partner at one of the big firms and so on. But I always had this itch, got to, to be an entrepreneur. So I walked away from a New York City office and down to my basement in my house and wrote a business plan and I hit a, a good wave at the time. It was kind of the roll up waves in the early 90s. And so, you know, and I developed a plan and believe it or not. I raised three and a half million in the first round with just a plan, not, not any location or anything. So it went on to raise about 60 million and we sold it in 97 for my revenue was 55 million. And we sold it to a private equity firm out of Connecticut. And so that kind of, you know, all right, now I got the wherewithal. I'm a Scott Wingo. I, you know, had a success. I can now spend time and, and invest. And so when I, I, I turned out to have a very fortunate piece in, in this puzzle which is I'd gone to UNC and I knew Raleigh Tillman who was a very famous professor at the business school and he was running the entrepreneurship program and he, he said hey, why don't you come try teaching? I'm like what? But I did in 2000 and I team taught with him for two years and I've been teaching, I'm still full time professor at the business school and entrepreneurship as part of the gigs that I have. But that allowed me, Scott then to have time and money to spend on investing in early stage companies. And so I, I joined three different venture capital firms and a couple of angel groups and did my passive investing that way for quite a few years until 2017 when we started the Carolina Angel Network. So I'll stop there. That's kind of the lead up to my experience of both like you being an entrepreneur and then moving over to the other side.

00:04:11 - Scot Wingo
Yeah. So did you do before you guys started can, which is Carolina Angel Network, did you, it sounds like you did some individual angel stuff. Were you, I can't remember, were you in TIG or Atlantis or one of those?

00:04:23 - Randy Myer
No, I was in Tap and Caressing. Yes, those were my two angel groups and a couple of venture capital firms. No, it was, they were a little bit before me, but maybe I just didn't pick up on them. I don't remember. I remember seeing them TIG and so on.

00:04:39 - Scot Wingo
But no, you're probably busy professoring for a while before you got enough to get your head over, you know, above water to start doing other stuff. Yeah, yeah. So, so let's see right now you're give us like what's your current. You always have like six titles. I never know what all is going on. So it seems like you're still doing, you're still teaching.

00:04:59 - Randy Myer
Is that I'm still teaching. Although that will end Scott on June 30 and and then I'm also, well, I'm still on the board of can of Carolina Angel Network. But I turned over the executive role to Maureen O'Connor about, about a year ago. A little less than a year. About a year ago, I guess. And then we hired a junior person, Brett Wang, who you, you know, it's going to be part of this group to be the director, so got a whole new team, but I've been helping coaching them through the last year on deals and so on, so. But the first six years were my responsibility, my wins and losses. Right, yeah.

00:05:50 - Scot Wingo
So you were, you know, is it safe to say you're one of the founders of can? Is that like a, you know.

00:05:54 - Randy Myer
Yes, I would actually, yes, say that I was, I was there at the beginning with John Glushick at Duke and Joe Sinsheimer at NC State. So yes, the three of us kind of organized shared best practices, did deals together. We did a couple of deals together, so it was nice. Syndicate, startup world.

00:06:19 - Scot Wingo
Yeah. And then so for folks that aren't familiar with can, maybe kind of like, you know, do a little pitch of how you guys, you know, how it operates, the type of check size and the sweet spot for can and maybe, you know, I know you've been on it six years, but maybe try to summarize how many portfolio companies and how much dollars you've deployed.

00:06:40 - Randy Myer
Sure. So first of all, it's, it's a network, not a fund, which means that individuals who join for a small fee and it's like fifteen hundred dollars or thousand, whatever, they get the visibility to see a deal, but they make their own decision on to invest and how much to invest. We have a minimum of 5,000 if you're going to invest. We've recruited, Scott, a little over 400 alumni to join over the seven years. There's probably 80 or so right now that are pretty active. We've, we've done 32 deals and about 35 million from those individual investors. And it has the usual mix of some good exits and some craters, as you would expect you and I know over those years. Typically, you know, I know the number sort of sounds like about a million, but typically in the first round we'll call it a Series A. We don't really do pre seed. We will look at seed because we are, we will be in the medical products world. So oftentimes they're just about going into the FDA process. So I call that seed. But typically we'll put 3 to 500,000 or 600,000 in the first round. And most of our portfolio companies have had second rounds and so on, so forth. So if the Number sounds like on average about a million. That's about right I guess if you think about how we do it.

00:08:25 - Scot Wingo
So no pre revenue. So on the technology side generally you want to see them have a fair amount of momentum. So usually north of a million or 2 million revenue to get to.

00:08:32 - Randy Myer
Well, we'll even, we'll even look at it. I mean a lot of it's got on the, let's take the, the non medical biotech stuff. As long as they've got enough customer traction to be able to talk to customers. I don't really, I mean originally we said half a million but you know, it a lot depends on what the traction is, how many there are because you as you know, you want to know what, what level of turnover or churn there is and so on so forth and success rates, etc. So enough traction to have that kind of review process.

00:09:11 - Scot Wingo
Right. So it sounds like. So you guys do you know, health tech. Not health tech but like biotech, life science deals. So devices and drugs and that kind of thing are there, are there any categories can absolutely says, you know, we know our, our network isn't really interested in this or.

00:09:26 - Randy Myer
No, not really. Other than non profits. You know, we won't do a non profit. Yeah, no, we've, we've gone the spectrum move. I don't think we really. I think if I look at the portfolio we might have one biotech, Scott. But we do have several diagnostics. We do have, you know, so, so there's room in there for, for those as well. I would probably say the Met, leaving aside medical it, I would say probably medical products, diagnostics included probably is 25% of the portfolio. 20. 25%.

00:10:05 - Scot Wingo
Yeah. And then obviously you guys are associated with, you know, unc and my understanding is maybe you say it but there has to be a connection to the university. Like what are some of those connections that work for you guys?

00:10:16 - Randy Myer
Yeah, yeah it does. And the rule that we use is somebody on the management team or the board chair has to have some connection to unc. In a few cases, Scott, it's been people who have paid tuition for their child, which I consider. Yeah. And but now that's the connection that they have to have either on the management team or the board chair. We've had people that tried to appoint a board member. You know now that, yeah. We didn't quite accept that as a ground rule.

00:10:55 - Scot Wingo
We've had people say they would move here for our little $25,000 check and we're like no, you if don't don't do that. That's like a, you know, that, that's almost like an anti signal for us. How about, you know, over the, you know, and we can just stick the can or you can go back to TAP if you want. Like. So what have been some of your most successful investments as a angel investor?

00:11:17 - Randy Myer
Well, I, you know, I think the ones that, that I look back on are the ones that were the, the revenue model and the growth model had huge upside potential and they demonstrated it. So you know, a company that's doing say 2 million, but if you track it for a couple of years, their revenue growth rate is, you know, 230% or something like that, you know, that, that's, that's the one that you really love. We, you know, I'm also, I should mention this because, you know, you asked about TAP and you asked about can. I've been involved with something called the Carolina Research Venture Fund, which is an internal fund, 20 million dollar fund inside the university. And I was one of the founders with Sally Shuping Russell. And it's still out there, but we actually had one that went public. G1 Therapeutic. Scott.

00:12:23 - Scot Wingo
Nice. So the tech transfer kind of technology out of unc, kind of a.

00:12:28 - Randy Myer
Yes, I would say it was a tech transfer, but it was actually Hatteras. We, we built CRV research ventures on, around a relationship with Hatteras. So Hatteras would scout the, the walls of the university and look for technologies that they like and they led that one and we, we invested alongside it.

00:12:52 - Announcer
Cool.

00:12:52 - Scot Wingo
So you had an ipo and then one of the more recent ones I know was a big win for can was the carpe guys, which I love it when the things you wouldn't expect would be big exits. Like that's like, that's been one of my observations is it's, it's very humbling to go back and think, you know, think back to what you thought about these companies and then, you know, it's sometimes the craziest ones just do great, you know.

00:13:16 - Randy Myer
Yeah, no, yeah, that's a great story because I can remember John Glushick and I met with them. They were barely out of college. They, you know, had invented the cream in their laboratory somewhere. They were a mix of UNC and Duke students. And but I think one of the things I learned from that, Scott, was from the very beginning, John and I found a really good board chair to coach them, you know, and, and be there for them. And so I think that was a big help. Another one that was kind of Fun was. Do you know Voice, Scott? Does that ring a bell with you?

00:13:56 - Scot Wingo
Not another.

00:13:57 - Randy Myer
So Voice was developed by Andrew Royce is his name. He was a undergrad at unc, not far out of school. Not. I quite like the carpe guys, you know, barely dry ink dry on their diploma. But, but, but Andrew decided that when it comes to people that walk into a hospital that don't speak English, the hospitals tend to have large staffs of translators. But if you have an emergency situation and they come in, the ability to get in touch with this translator and bring them to the hospital and so on takes a while and causes problems. And it's also expensive because they have 20 or so. UNC had 20 or so translators on their staff. So what he did was he developed a online connection that you can reach a translator within seven or seven to ten seconds. And as long as you have an iPad, you can begin treating them right there. And it's, it's been a huge success. I mean they signed up major hospitals all over the country and. And he's in the process of going through an exit. One of the exit process Scotts, you know, you and I know with an investment banker. Yeah, yeah.

00:15:27 - Scot Wingo
Cool.

00:15:28 - Randy Myer
So that's another example.

00:15:30 - Scot Wingo
Yeah. How about some, some investors keep an anti portfolio, the ones that kind of got away. Do you have any that come to mind of like, man, I wish there was something you didn't see or you missed it or anything like that.

00:15:44 - Randy Myer
You know, there's probably, I probably don't track those, Scott, as well, you know, because there's no word, no value in spending energy on a, you know, missed opportunity. It's kind of like, okay, I don't talk much about the Duke UNC basketball last weekend, so. So no, I, I do know that there's a couple that were on the west coast that we just didn't have enough expertise. They were kind of like. And I would say the other thing too was. And maybe you've seen this. But the west coast deals for a long time were way overvalued. We have one that has, you know, virtually not even gotten into the FDA process and they have an $80 million pre. Money.

00:16:43 - Scot Wingo
Yeah.

00:16:44 - Randy Myer
Yeah.

00:16:44 - Scot Wingo
It's hard to, hard to make money when. For the early stage investor, when things get so inflated early on.

00:16:49 - Randy Myer
That's right. That's right. So I can't say I spend a lot of time, Scott, thinking about, oh God, if I just made that free throw, I would have.

00:16:58 - Scot Wingo
Yeah. I don't know if you've ever calculated the number of pitches you've seen, but let's say you've done can for six years. Maybe you said see 10 or 20 a year and tap and you know, so it's gotta be easily 100, 200, 300 pitches you've seen for, for the contestants out there that, that are going to join this contest and they're going to be a little bit earlier stage for this. They're going to be like what we would call precede or pre tweener in our language. What's your advice on either do's and don'ts of pitching?

00:17:26 - Randy Myer
Well, definitely want to practice with people that, that are friendly to you because one of the things you're going to find is you didn't anticipate this question and so you, your answer isn't very good. So go practice with people and you know, let them ask hard questions. Be prepared because, you know, I, I never remember. You'll like this story, Scott. Scott Maitland told me the story. Scott started top of the hill in, in Chapel Hill. He went to the bank. You know, he, he started with his, a number one bank that he went to to raise money to buy the place. And he said, he walked in and he put his briefcase in that case. He had a briefcase on the table and pulled it toward him and it went a large scratch in the table.

00:18:24 - Scot Wingo
Oh, and a banker. Bankers have fancy dust to you.

00:18:26 - Randy Myer
Oh, yeah. So, you know, make sure you practice. I, you know, I'll use the same advice I mentioned earlier about the carpe guys. I look very heavily at who are your advisors and, and, or board members. You may not have to have board members, but I want to know who your advisors are because I know you're going to make a mistake or you're going to pivot. And I want somebody with experience that can be there that will talk about, you know, the, the, the ability to coach. And so coachability becomes very important. Scott, to, to my criteria, do I see in that person if I make a unusual comment, do they go well? Yeah, no, I, I wouldn't think about that. You know, you can tell you and I know how to tell coachability and, and so that's what I look for in the presentation. I, I always want to hear first kind of put me in the shoes of the, the buyer. If it's not a category that I know, describe to me. Let's take the one I gave you. The hospital, you know, people that run the translation services. So put me in that, in their shoes and tell me what the pain point is. You know, make me feel the pain. Yeah. And, and even though I'm not in that field, if I can feel any of the pain that I get, you know how you're going to convince and sell people to buy? So those would be my three. Scott.

00:20:11 - Scot Wingo
I think those are good nuggets from, from an OG angel investor. So we, we appreciate you doing this. We'll see you in person when we get into the contest, but thanks for introducing yourself to folks and it's going to be a lot of fun. So we appreciate you doing it.

00:20:26 - Randy Myer
Oh, you're great to ask me and I'm looking forward to it. So. All the best.

00:20:36 - Announcer
That's a wrap on this meet the judges episode. Now you know the minds behind the decisions, the investors and industry leaders who will be putting these startups to the test as Tweener Madness kicks off. They'll be asking the tough questions, making the tough calls, and deciding who advances in the bracket, all leading up to the finals in early April. Make sure you're subscribed so you don't miss a single matchup. And if you want to follow along with all things Tweener Madness and the triangle startup scene, head on over to tweenertimes.com also, if you're thinking about launching your own podcast or want to bring professional production to your brand, check out earfluence.com the competition is about to begin and we'll see you soon in the next episode.