What goes on inside the brain of an investor? At the June 4 Startup Day ATL, a packed house had the opportunity to find out. Steve Chamberlain, investor and senior advisor at Insightpool, sat down with Scott Henderson to discuss the topic many entrepreneurs are most intrigued by — raising money on an idea.
” If I can say one thing people buy people. That’s really what it comes down to.”
– Steve Chamberlain, On how to raise money for an idea
In this video, Steve Chamberlain speaks on the importance of having guts, learning from failure, and just being a good ‘ole fashion genuine person. Through his years of investing he has found that the individual behind the idea is almost always more important than the idea itself.
Here’s a little about Steve Chamberlain and his career as an investor.
- Steve served as executive vice president at Turner Broadcasting for over 8 years
- As head of the Beatles Anthology at Capitol Records, Steve oversaw the most successful compilation in music history
- Investor and vp of brand development at WebMD
- Steve is the CEO and founder of Bobby Jones Productions, Inc. – the exclusive owner of the Bobby Jones – How I Play Golf DVD – a golfing best seller
- Steve now serves as an investor and senior advisor at Insight Pool
Transcript services provided by TransciptsHQ, a proud Atlanta startup
Scott Henderson, Hypepotamus: Into the hot seat is Steve Chamberlain with InsightPool and a number of other ventures. I love your background – you are not the prototypical entrepreneur. You started in story telling, in journalism.
Steve Chamberlain, Investor: Right.
Scott Henderson: You’re a Florida Gator.
Steve Chamberlain: That’s correct.
Scott Henderson: You have raised a lot of money off of ideas. Notably, you headed up the Beatles Anthology for Capitol EMI. The most successful and best-selling record compilation in music history. And here in town you were part of the development of the King and Queen building. Very early you were a part of companies like Web MD and you also own the most famous golf instruction film ever made: Bobby Jones: How I Play Golf.
You worked with Turner Broadcasting, you have been part of a number of exciting ventures and startups, and you are obviously a demonstrated storyteller. I’m really curious, how do you raise money for an idea?
Steve Chamberlain: Well, you have to have a lot of guts in the first place and if I can say one thing, people buy people. That’s really what it comes down to. I’ve made 23 investments in the last 15 years. I had four very successful exits, Web MD, True Broadband and most recently Vitrue, and a credit card transaction company called Repay Online. I have had nine bankruptcies so I have been hit over the head quite a few times. And I have ten that are active right now and that I’m very excited about. But it’s through the failure that I’ve learned and so much of this is rooted in failure. You get kind of good at it after a while. Like I was saying to Adam, I’ll look at a hundred these days and I’ll do one.
It’s come down to that. I was sitting in my office this morning thinking about what I could say uniquely to everyone here today and there are eight things that I have to have before I do a deal.
First, do I even like the person? Seriously. I’ve done deals before where I don’t even like the person. I think they are smart and I’m intrigued by it, but the mindset is just go ahead and do it and not think about it. I have paid the price for that. It sounds like common sense, doesn’t it? But it really comes back to bite you if you don’t honor that. So that’s the very first thing.
Second, what is the work ethic of the people involved in this deal? Believe it or not, I’ve been in deals where people have told me what to do and I’m the money. They go on vacation for a month and you can’t find them. I have run into these types of things. I learned the hard way, so I want to know what the work ethic is for the people at the center of this deal. What are they willing to do, because it’s going to get difficult. It always does. But the work ethic gets you through it together.
Third thing, what have you done before? Even if you’re young and you’re a college student, what have you done to excel in school or athletics? What have you done before? I’m looking for a success story, I’m looking for a pattern, and I’ll ask it. As I get to know people I ask, what have you done before? All of it comes back to confidence.
Number four, do I understand the product or service or whatever it is that we’re doing? Because if it breaks, can I help them fix it? I want to know that I understand the product myself. Believe it or not, I have invested in companies where I have no idea what we are doing. And it has come back to haunt me.
Number five, what’s the niche we are going after here? I’m not interested in competing against a Fortune 500 company. I’m interested in finding that little hole, that little niche where nobody else is looking and going after it. So my money is one thing and I have done it 23 times, but what can I do personally to help move the company forward? I tend to get involved either as a board member or an adviser. What can I personally do to pick up the phone and generate new sales? It typically comes back to the branding area that I have experience in and the sales and the marketing is what I typically lead in. However, I want to be involved personally with it. I don’t want to be a passive investor.
Number seven is a big one because I have experienced it a couple of times. The exit strategy. Are the core people on the team, the CEO and the other guys or ladies that are running this thing, are we on the same page when it comes to getting an exit? I’m not here to finance a science project and I have done that before. This is all about the money to me as an investor. We have had severe conflicts over this because you get people that are holding on, disrespectful of the other people who have put the money up to make this happen and it creates a problem. So I want to make sure up front before I write the check, are we on the same page when it comes to getting out of here? Otherwise, I’m not interested.
And then the final test – what are my instincts telling me? Every single time that I have lost, I haven’t had that thing that just says, “I can’t lose.” So my instincts, that little button in the back of your head or that antenna has to do the tweaking for me to want to do something.
Scott Henderson: When you were out helping the companies that you are advising and investing in secure more funding, what’s the one thing that they need to be prepared for? What do they need to bring into that conversation?
Steve Chamberlain: Well, let’s be clear about this. You obviously have wealthy people getting involved in this type of funding. You take five percent of your assets you can afford to lose and you go ahead and do it. I’m going to go back to the same thing; people buy people. It’s all about the confidence. I’m 58 years old and when I’m dealing with young people at Flashpoint, when I get them in front of the president of Turner Broadcasting, it’s no joke for me to pull that kind of political capital and they are doing it as a favor to me. So I insist with the young people, “You are going wear a coat and tie.” I don’t care what they are wearing but we are going to act like professionals from the get go because first impression is everything. Maybe I’m old school but this hoodie stuff doesn’t wash with me. It’s funny, but that’s my money!
Scott Henderson: Let’s say I’m 21, I’m getting ready for it; I understand that people buy people. What’s the best thing I can do in my preparations? What activity, what tactic, what exercise can I go through, so when I am in front of that president of Turner Broadcasting, I’m ready?
Steve Chamberlain: I want you to understand that you have to be in great command of the subject matter yourself. What are you trying to do? However, the biggest thing for me is to understand the marketplace. Who’s in this already? How are they doing it? What are the other companies and how do they address this now? So what’s the angle here? What I’m looking for is the background, the historical background that you have done your homework, that you understand the landscape and you know what’s already out there. That’s impressive to me. Not,” Well I don’t know.” That doesn’t enchant our confidence.
Scott Henderson: Who’s the best Beatle?
Steve Chamberlain: I can’t say – they’re all the greatest.
Scott Henderson: What is your favorite Beatles song?
Steve Chamberlain: I would probably say, In My Life.
Scott Henderson: Thank you very much.
A special thanks goes out to Steve Chamberlain for taking the time to sit down and speak with us.