Interview with Serial Entrepreneur Richard Pollack

Richard Pollack is a visionary with a 25-year track record of successfully building, leading, and advising a diverse array of companies. As President of LEOJ Holdings, Richard owns and operates businesses in various sectors such as technology, digital marketing, human health and pet care and various e-commerce sites. Additional holdings include fintech, real estate and entertainment. Prior to his leap into advisory and investments, Richard was founder and CEO at BeyondROI, a digital marketing agency that has helped over 500 businesses grow market share. Richard also served as Vice President at Monster.com (acquired by TMP). Prior to Monster, Richard was an Ad Network Rep at DoubleClick.

Preceding his move to the digital world, Richard spent nearly a decade on Wall Street. Serving as President of First Providence Financial, he led the firm to a successful acquisition. As engaged in the community as he is in business, Richard is an active volunteer for Junior Achievement, an organization that helps prepare today's students for a bright future. Richard serves on Lynn University’s College of Business Advisory Board and the Pine Crest School Advisory Council. In addition to advising other non-profit organizations, he is also an active member of Entrepreneur’s Organization (EO).

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Devathon has built software for companies backed by the world's leading investors like Betaworks, Greylock, Andreessen Horowitz, Accel, KPCB, Lightspeed and many more.

In the following interview, Richard talks about his entrepreneurial journey and gives his insights into angel investing.

How did you get involved with Angel investing? Tell us something about your LEOJ Holdings.

There are many ways to invest in a business with the goal of achieving a healthy ROI. I tend to be more attracted to non-traditional investments, allowing me to see directly into the heart of a business.

Angel investors are early stage start-up investors, where the investor is often at arm’s length from the founder. Having direct access to the founder keeps me well informed and if needed, I can provide guidance in a “non-official” capacity, helping to protect my investment.

Over the past 20 years, I’ve advised many early-stage entrepreneurs and I’ve been closely tied to the start-up community. This has turned into a constant stream of “deal flow”, where start-ups often seek my capital and advice. While I’ve funded many of these businesses over the years, I found that by connecting to other Angel Investors through networks like AngelList, it provides greater access to a wide array of start-ups.

LEOJ Holdings is a portion of my portfolio that contains some investments and businesses I own.

What do you look for in a start-up as you evaluate it for a potential investment?

For the investment to have a shot at being funded there are a few initial ways I evaluate start-ups.

  1. Does the founder have the passion, drive and intelligence to execute? Founders come in all shapes and sizes. Some have prior experience to reference and others are new aspiring entrepreneurs with no history. Either way, spending time with founders provides a firsthand opportunity to dive into who they are and how they operate in life and in business. When thrown a curve ball do they have what it takes to overcome obstacles, will they have the ability to make successful pivots?
  2. Is the business solving a meaningful problem? Is the product or service being addressed with a unique solution, whereby the founder identifies areas of opportunities where others have not?
  3. Are financial projections realistic or are they a quick hockey stick financial model, likely not grounded in reality.
    The very few businesses that make it past these steps may be further evaluated by my own deep-dive SWOT analysis, providing an independent risk/reward assessment.

How does someone get you excited and willing to commit?

If they pass my evaluation criteria, for me it’s less about emotions and more about the upside potential. I look at the business life cycle, analyze and forecast the last chapter of the book, meaning what are all the exit possibilities. How long do I think it will take to achieve A, B, C milestones. The upside potential and realistic time required to reach meaningful milestones determine how excited I would be to invest.

Besides providing capital, what additional support do you offer as an Angel investor?

Business advisory, business development and access to my vast network of contacts.

What are the red flags for an angel investor?

Unrealistic revenue and profit forecasts. Is the founder presenting hockey stick growth and close comparisons to unicorn companies? The founder appears to be unstable personally, professionally or both. The founder lacks too many core leadership skills needed to execute and/or they do not recognize who is needed beside them to fill in the critical leadership gap. The founder is too rigid in their thinking and may miss key signs the business requires a pivot. They lack a plan b or c.

Why have you set up an Incubator? Tell us something about your Velocity Ventures.

Velocity Ventures, which is no longer accessible to the public, was set up to provide early-stage companies with daily access to thought leaders and skilled experts in order to help expedite their success. There are only a handful of companies still being incubated, as most have matured into thriving companies standing on their own with well-rounded leadership. Velocity no longer accepts new companies, as I personally needed to regain more of my time to operate other businesses and invest elsewhere.

The entrepreneur/investor relationship is quite complex. What should an entrepreneur look for in an angel investor?

Look for smart money versus dumb money. Dumb money should only be utilized as a last resort. Smart money means that the investor is not only providing capital, but they can also provide other forms of help.

For example, they may be an expert in the industry the business operates, providing knowledge and experience. They may have a vast network of people they can introduce (capital contacts, industry expertise, sales opportunities, PR connections, advisors, future board members, etc.). They may be interested in joining the business full time at some point or may invest more capital at future milestones.

Angels also come in all shapes and sizes, be comfortable with who they are. Does it seem like the Angel has unrealistic expectations of when they expect ROI? Does it feel like they want to micro-manage their investment? These are potential signs of trouble down the road.

In your opinion, what are the hurdles that keep people away from starting an entrepreneurial career? What advice would you give to the new entrepreneurs?

I see many aspiring entrepreneurs afraid to take the leap and go for it due to a fear of failure. Entrepreneurs know that failure is part of the journey and each time they fall down they get right back up, dust themselves off, learn from the mistake, adjust, and move forward full speed ahead.

If you can’t afford to leave a job and go without pay for a year, then start the company after-hours, early morning, late night and weekends. Do everything to keep the burn low in the early stages to avoid needing investors. Grow organically through the proof of concept stage before considering capital. The longer the business can self-fund its operation the more likely the business will maintain a growth trajectory and achieve a higher valuation, ultimately allowing the entrepreneur to retain more equity.

If the entrepreneur truly believes in their idea – get in the mindset that nothing and no person will stop their dream from being achieved.

Get comfortable with being uncomfortable…constantly take on challenges that push you out of your comfort zone.

Most of all be a hustler. Eat, sleep and breathe your vision.

Are you an entrepreneur looking for your MVP built? Get in touch with us at hello@devathon.com

Devathon has built software for companies backed by the world's leading investors like Betaworks, Greylock, Andreessen Horowitz, Accel, KPCB, Lightspeed and many more.