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"I work with companies at two stages, early and way too early," Howard Morgan told the entrepreneurs, investors and advisers assembled for Alan Brody's VC Outlook iBreakfast in New York City earlier this week. It's a favorite phrase of the Idealab director, who is also a partner of First Round Capital and a member of New York Angels, all of which invest at the seed stage.
One recent investment he's excited about is Videoegg Inc., "founded by the only three Yale grads who didn't have a trust fund," Morgan quipped. Videoegg, which pioneered the use of overlay ads in online video recently adopted by YouTube Inc., is the second-largest provider of online video after YouTube, according to Morgan. Videoegg "white labels" video to Web sites.
Not only is Morgan an early investor; he's also an early adopter of tech products. As his blog says, "But being too early on these things costs money. I'm often faced with the old question of how early to upgrade to the next new best thing." That's why the business plan of TechForward, a First Round Capital investment, resonated with him. TechForward offers guaranteed buyback prices for new gadgets, including laptops, digital cameras and music players.
Although he cautions that it isn't always the case, Morgan says sometimes being early pays off. About eBay Inc.'s May purchase of StumbleUpon for $75 million, he beams, "We got quite a nice return on that one because we invested early." -- Mary Kathleen Flynn
See Morgan's blog waytooearly.com
See Aug. 22 post from Tech Confidential
See May 31 brief from TheDeal.com
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