April 19th, 2013 The Hatchery: Charlie Kemper

http://events.hatchery.vc/events/97679042/?eventId=97679042&action=detail

OLC attended The Hatchery’s Friday evening event featuring Charlie Kemper on Friday, April 19, 2013. Charlie Kemper is an entrepreneur and investor who has done extensive work with advertising and digital media, as well as advertising technology and software. He is a Partner at Revel Partners, an early-expansion stage investment group. At The Hatchery, Kemper talked at length about his experiences as an entrepreneur and about the state of New York City’s startup environment.

 “Our office used to be on 43rd and Broadway. Times Square is an awesome place for business because all the subways stop here,” Charlie Kemper said. He was born in Brazil and spent most of his formative years in Mexico City. Kemper enrolled in Northwestern and spent five years there as a Computer Science major. He came to New York City for a six-month internship with a bank as a programmer working on a market-to-market program. “It was a miserable job,” Kemper said. “I worked doubly hard and finished the six-month internship within two weeks. I applied to numerous jobs—and ended up at Avalanche Systems. They later became Razorfish. I wrote some code for them and I went back to college to start my own business similar to Razorfish. A few years down the road, I built a successful business and exited in December of 1998.”

Kemper joined one of the clients that he had while running his business and became the controller for auto design for Ford. He soon got an opportunity to join a startup in Washington D.C., and quickly jumped at the chance to leave Michigan. “It was called Darby Technology Ventures and we raised $30 million to work and focus on Latin American markets. We invested in a dozen companies in the early 2000s,” Kemper said.

It was then that he realized a philosophy that he keeps to this day. “First money in and last money in,” he said. “That’s what I learned. Every single company that we invested in survived. There were a handful of exits.”

Kemper moved to New York City in 2004 and joined a private equity group. He focused on infrastructure software, marketing services and publishing. From 2004 to 2009, he managed a variety of different funds and invested in companies that went public and companies that “didn’t do so well.” Kemper revealed that the checks ranged from anywhere from $1 million to $3 million dollars.

“In 2008, the world fell apart and our hedge fund said that we couldn’t make any more deals. So we focused on our new portfolios. It was 75 percent West Coast-based and about five to six investments in the New York area,” Kemper said.

In 2010, he left the firm to put together an entrepreneur accelerator. “Its in Chelsea,” Kemper said. “We invested in 41 companies in the past two years and we’re trying to build an awesome community as well as having 200 to 250 different mentors ranging from developers to C-level executives, offer free law services, free AWS.”

As he was working on the accelerator, Kemper also launched Revel Partners in early 2011. “We made five investments in the past two years. The philosophy is the same as before—first money in, last money in. We think we can help people grow. I spend 90 percent of my time at the accelerator and the other 10 percent at Revel,” he said.

From here, the floor opened to audience questioning.

“What percent of companies that you invest in are based in New York City?” an audience member asked.

“Today, about 95 percent are in New York. I don’t think New York City is going to be a mecca for technology companies just yet,” Kemper said.

“What do you see in up and coming technology for ad tech?” someone asked.

“It’s hard to tell. I think video is ripe for ad innovation. I think content creators will create more innovative technology. There’s a whole creative element to it. Somewhere on the video, there will be new ad tech regarding that. There’s more and more tools that can play around with videos,” Kemper said.

“Where is the market going for the ad space?” a member asked.

“We’ve had a lot of success with cost per view than CPM. I’m happy to see ads. We all watch Super Bowl ads. I think as a consumer—people have to get paid. The web early on set a terrible expectation that everything should be free. Newspapers are putting up paywalls—it’s slow and painful, but it’s going to be how things are integrated,” Kemper said.

An audience member asked if Kemper had a quality that he looked for when selecting companies for his accelerator. “For us, we focus on businesses that have been around for a little bit. A lot have product in market. Some are already profitable. It’s not as early- stage as one might think. It’s really about accelerating your business. You have to have something to be accelerated. We tend to focus more on B2B. Other than that, we have a bunch of investments in marketplaces. Our first look is culture fit. Being a part of that is super important. As for consumer-related ad tech, I don’t have anything particular to say. Just make sure you have a way to monetize. I mean, we look for some idea of a backdrop. We need a background of crazy and crazier entrepreneurs in New York City. My goal is to help bring NYC to the top of its game,” he said.

To end the discussion, Kemper outlined things that he found to be interesting.

• Consumerization of IT

• Education

• Big data

• Data consistency—porting

• Vertical-focused businesses