Seed Capital From Angel Investors: Russ Fradin, The Bay Area (Part 1)

By guest author Irina Patterson

This is the twenty-third interview in our series on financing for entrepreneurs. I am talking to Russ Fradin, a serial entrepreneur, who is currently the cofounder and president of Adify and angel investor in the Bay Area.

Irina: Hi, Russ. Let’s start briefly with your background and how you came to this point.

Russ: I started as one of the first employees with a company called FlyCast back in 1996. It was really the first online advertising network in the way people think of ad networks today, focused on – in the early days it was a novel idea – focused on direct response advertising and performance advertising online.

I spent about four years there and had a ton of jobs and ultimately [became] a VP of business development for FlyCast. After FlyCast went public and was acquired, I was a VP of business development for company called Engage, which was really the first behavioral targeting company back in 2000.

I spent a bit of time there. But Engage was owned by CMGI and might have been certainly among the three or four worst-run companies in world history.

And so I left it long before the company fell apart and went to a company that was well run. I was one of the first execs at comScore, which was an upstart. It had no customers at the time, and I spent four years at comScore doing a variety of jobs. I was in corporate and business development, and I started and ran some of the various verticals comScore is in today.

I left comScore after about four years and spent a year with a friend trying to turn around Wine.com That’s when I’ve learned the value of taking money from good people you trust, because Wine.com actually almost had a very successful exit that was harpooned by really the worst investors I’ve ever worked with, possibly the worst human beings I ever met.

So, after about a year, once it was clear that they were going to destroy the company for their own evil means, I left that and started Adify with two of my co-founders. Adify was technology and media services company focusing on helping entrepreneurs and big media companies build and run their own vertical ad networks. We sold that company after a couple of years and stayed on continue running it.

And after FlyCast, comScore, and Adify I have been an angel investor, an increasingly active one in the past eighteen months.

Irina: What is your geographical focus?

Russ: I am based in the Bay Area. But I have invested in the companies that were not in the Bay Area. I tend not to have geographical focus. The filters I have for angel investing lead me mostly investing in the companies that are close to the Bay Area, but I don’t have anything against doing angel investment in Florida. Right now I am looking at something in Utah. I am an investor in something in Los Angeles. I don’t have any geographic bias particularly.

Irina: What’s your current source of deal flow?

Russ: Over the past months some of it has been from the AngelList. They are relatively new phenomenon. Before that it was just with folks that I worked with in the past, folks I’ve worked for, who worked for me, or other VCs whom I am friendly with who look at the things that are early for them.

I would say it’s all have been fundamentally inbound because I have a job. I run an actual company [Adify]. I don’t spend a ton of time looking to source deals. I wind up with pretty good deal flow just from my VC friends or friends who have been co-founders. I have been fortunate enough to be either the founder or early investor in two companies that went public, two that have been sold, so I have a pretty decent network and I work through them.

Irina: How do you work with AngelList? What is the process?

Russ: That is a totally new thing. I’d say it’s very much catch as catch can. There is an investment I did that closed out the rest of its round on AngelList, but I didn’t invest in them through AngelList, I invested in them through a different in. I have met with two or three companies through Angel list in the last month. I look at it as the same process as I look at anything else. Maybe I am a little more skeptical of things from AngelList if they are not people whom I already know. But if that is something that I am very interested in, I’ll meet the entrepreneurs. And if I like the idea and entrepreneurs, then great.

This segment is part 1 in the series : Seed Capital From Angel Investors: Russ Fradin, The Bay Area
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