April 26th, 2013 The Hatchery: Georgetown Alumni Angel Network

http://events.hatchery.vc/events/114338852/

On Friday, April 26, 2013, OLC attended The Hatchery’s investor series featuring Heather Gilchrist of Georgetown Alumni Angels Network. GAA is not just for Georgetown alumni—it extends its investing portfolio to invest in the best with or without Georgetown alumni.

http://georgetownalumniangels.com/

Heather Gilchrist started her career out in education. She worked at Kaplan, but found herself getting sick of the limiting education space. She set out to start a new education technology company called Grockit. According to Gilchrist, Grockit was one of the first ed tech companies to consider social learning and emphasize its usefulness.

“I had a humanities degree and I soon found out that it wasn’t a stable major in the startup world. I went to graduate school and got my JD/MBA,” Gilchrist said. She added that she launched a seed fund with a real estate investor and didn’t realize how important networks are. “I was really good at one thing, then realized what my network was. Using that, we built a portfolio of New York companies that were consumer-facing and we didn’t dig into education until much later.”

Gilchrist admitted that the education space is a tough area to enter and succeed. The efficacy to scale in ed tech is getting harder and harder as bandwidth to do so decreases every year. “Last year, we started to take ed tech companies and help them accelerate. We’re part accelerator and part community,” she said, adding, “Georgetown Alumni Angel Network isn’t just limited to Georgetown alumni.”

From here the floor opened to questions, drawing a question from Yao-Hui Huang, the founder of The Hatchery. “What are the triggers for good investments?” she asked.

“We’re the first money in while bootstrapping in early-stage companies. We got lucky and for us, my first focus is on the founder or the founders of the team. Companies pivot, so I want to see a team of very smart people and unique problems they’re trying to solve. And for them to succeed, they need to sell the problem. Then they can iterate to a solution. You need to sell and convince the investors that there is a problem and that you’re the one with a solution,” Gilchrist said.

“What are some cool ed tech platforms right now?” an audience member asked.

“Education as a sector’s gotten really cool. Schools realized that they need to innovate. Investors now are increasing money and technologists follow that money. Schools are a lot more eager to solve things. A couple of risk factors come into play, though. There’ve been some bad investments, and those investments—money—follows bad business models. A lot of mistakes were made in the past. I want to make sure we don’t miss this chance,” Gilchrist said.

“K-12 districts want new stuff, but they’re so protective over the kids. They think like they can’t put imperfect technology in front of the kids for fear of ruining technology.

They’re doing a disservice to kids by preventing them from exposure to new things. I agree, though, on protecting kids from bad technology. That’s important. Data is making a big impact today, It can help teachers drive to more insights about their students. We’re going to see really cool things in the next 10 years,” she said.

“How do you deal with long sales cycles?” Huang asked.

“We establish partnerships right off the bat. With formal partnerships, we’re working to change the cycle and make it iterate faster. Being in ed tech is tough right now because a lot of ed tech innovators were educators and they don’t have a lot of money. When we don’t solve education problems, it’s not going to help our future,” Gilchrist said.

“It takes a lot of very special people to get people together—investors, students, technologists, and so on—to talk. Before we talk about flipping classrooms and branching classrooms, we need to focus on students’ necessities. Twenty-five percent of families don’t have access to internet at home. We need to tackle this issue first,” she added.

“What about revenue?” Huang asked.

“I get calls from other venture firms very regularly. You need to be able to scale. An example is giving platforms to educators for free and charging publishers because that’s giving the publishers are service,” Gilchrist answered.

Regarding information on the web, Gilchrist had this to say. “There’s so much information on the internet that you will have a hard time distinguishing what’s quality content and what’s not.”

She revealed that the size of rounds that the network holds ranges from $25,000 to $250,000 dollars, with a few hundred investors involved.

To conclude the talk, Gilchrist left us with some words of wisdom. “Talk to as many people as you can,” she said. “The point is to expose yourself to as much information as possible and see what works for you. Go out there and try.”