Silicon Valley's Hottest Matchmaker
When international entrepreneurs want a shot at Silicon Valley stardom, they call on Saeed Amidi.
The angel investor is the son of Amir Amidi, who owned the Medallion Rug Gallery where fellow VC Pejman Nozad famously built up his contacts. And his ties to the tech hub span 35 years. As co-founder of the investment firm Amidzad Investments, Amidi has the expertise and deep pockets to show for it.
Since 2006, Amidi's passion project has been Plug and Play, an international network that's accelerated 1,200 start-ups and collectively raised more than $1 billion in venture capital. Last year, the organization made 62 investments, while helping 150 start-ups from Silicon Valley and another 100 from abroad find resources and make connections.
Helping foreigners get their foot in the door is perhaps what Amidi, an Iranian exile, does best. During their time at Plug and Play, which Amidi describes as a sort of "start-up university," ambitious entepreneurs learn the ropes of launching a business from those who know it best: veteran VCs and serial entrepreneurs. The most promising start-ups get to pitch during Plug and Play's Expo Event, which wrapped up last weekend.
Plug and Play vies with the likes of Y Combinator and TechStars for talent, but it boasts a fair share of big names on its roster: Lending Club, which has funded $1.6 billion in consumer loans, and Zong, a mobile payment start-up founded by PayPal President David Marcus that sold to eBay for $240 million. What's more, Plug and Play has become synomous with "international talent," not a small feat in hyper-competitive tech land.
I spoke with Amidi by phone about what makes a great pitch, why he loves nurturing start-ups, and why the Silicon Valley bubble isn't going to burst in his lifetime.
How did Plug and Play get started?
We started by investing in companies that were leasing space from us, like PayPal and Andy Rubin's Danger. For 12 years, we used to invest for fun and then Plug and Play got started about seven years ago, in 2006.
Did you always have an international focus?
The main objective for me is finding a great investment. We found the companies that are in Palo Alto are already connected. They didn't need our help as much as the companies that may be just as good but are not in Silicon Valley. We love to participate in the seed round, but more importantly, we like to be part of their success. It increases the value of our investment.
What compels you to invest in a start-up?
It's the passion, the intelligence, and the team. If I like the team and feel they are brilliant and passionate, I don't even care about the idea. The second thing is what idea they are going after. Is it something that can scale? Something that is missing in the market? This is much easier to do with a serial entrepreneur, but a lot of the entrepreneurs we work with are first-timers, so you have to check out what they are focusing on. Can it be a big business?
We see what they have done in the last three, six, or twelve years. If they haven't put in a lot of sweat equity and don't have a product or prototype, we tell them to come back later when they do.
Tell me about the environment at Plug and Play.
We host 300 companies in one building. If a start-up is local, they stay with us for two years. If not, they stay for three months. They go through something called start-up university, where we show 20 case studies on average from 20 entrepreneurs who have gone on the same journey before. It's done professionally and casually. The entrepreneurs who stay three months meet about 20 other entrepreneurs who have raised money, exited, failed, and can explain why they've failed. Most of what they learn, they learn from other entrepreneurs.
Where do they stay if they're international?
We got a couple apartments years ago, but it was too much of a headache, so now I tell them, "You're the entrepreneur, figure it out. Rent a room from AirBnB or Craigslist."
What's your typical day like?
My goal every day is to meet with four startups and then I usually like to have a meeting with one or two investors. That translates to one investment a week. Each company we're looking at is in a different stage.
Why is Silicon Valley so valuable to entrepreneurs?
Some people were worried during the downturn that Silicon Valley might lose its charm, but I really think that if you want to be serious about being in movies, the best place to be is Hollywood, and I feel the same way about tech innovation start-ups. You have to be connected to Silicon Valley.
I have an accelerator in Valencia and another in Berlin, and you can build a great company just about anywhere. But I urge entrepreneurs to be connected to Silicon Valley, because I think the culture that is here, the investors that are here, as well as all of the success and failure stories that are here is like a crash course in entrepreneurship.
Is Silicon Valley on the verge of another bubble?
No, because I see a lot of companies with real business models. B2B is coming back really strong, and if you take most of the world's corporations like Walmart, its labs are here. Even Amazon has a big technical center here. Groupon has a very big office here in Palo Alto too. No matter what Silicon Valley becomes, the heart of innovation of the start-up world--at least in my lifetime--will be here.
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