“It’s a been a long time . . . I shouldn’t have left you, without a dope beat to step to.”

Eric B. & Rakim, I Know You Got Soul

Sorry that I’ve been gone for a while. May was a busy month (in a good way) for migoa and for the vertical search sector in general. I will post during the course of the next few days about all of the exciting things that have happened to us, but I think the biggest news is that Albert Armengol and Didac Giribets have joined our team as partners after we closed a €280.000 financing round with them. For those of you who don’t know who he is, Albert was one of the driving forces behind eConozco, a professional networking site that could be considered the Spanish equivalent of LinkedIn. Xing was eConozco’s biggest competitor in Europe, and in March 2007, they finally reached an agreement to sell eConozco to Xing. Under the terms of the agreement, Albert will continue as Spanish country manager for Xing. And it seems that he received a pretty nice payment, a portion of which he has graciously chosen to reinvest in other Spanish start-ups.

[By way of random comment, Albert commented to me that his father owned 25% of eConozco. It's always nice to see family members investing in their kids' Internet projects, and it's even better to see that their investments are nicely rewarded. A lot of the pressure of being an entrepreneur comes from feeling like you're not living up to your loved ones' expectations. Albert is a medical doctor with an MBA from ESADE, and I don't think that he had a comparable salary (considering his market value) before selling eConozco. It's nice when you can show your parents that they were right to believe in you, not just because you are their kid and they are obligated to do so, but because you actually had a good idea -- you were right!]

Oriol and I met Albert back in late fall 2006 at First Tuesday, a networking event in Barcelona. At that point, we’d already begun conversations with Didac Giribets about a potential investment in our company, but Didac didn’t have that much experience in the Internet space. His other investments were a lot more “traditional”, with the exception of a sizable stake in an Isreali biotech firm. So Didac invited us to this networking event so that we could meet Albert, who he introduced to as a guru in the Spanish Internet space. After about 1 hour at First Tuesday, the four of us left the event early and went to grab a beer and some patatas braves at a cheap local restaurant on the port. We explained the project to Albert, who agreed that vertical search presented an interesting opportunity and told us to keep him updated about what we did. I remember at that meeting Didac also suggested that he could invest in eConozco, but Albert didn’t seem so interested. Now it all makes more sense . . . .

In any case, we continued in contact with Albert, and when we saw that there was a good fit in our personalities — Albert’s an extraordinarily nice guy with a lot of useful information and contacts but without any arrogance or cockiness; he seemed sincerely interested in just helping us — we invited him to join our advisory board. After a few months on the advisory board, after the announcement of the Xing sale, Albert told us that he really believed in our project and in our team, and that he wanted to join the migoa team as a partner. We were wholeheartedly excited, because it’s no so easy to find a successful Internet entrepreneur in Europe, much less in Spain, who has had a successful exit of his company via a sale to a prominent multinational organisation. That experience alone is almost worth more than the money that Albert invested in the company. Almost. Seriousy though, Albert is not going to be a “passive” investor. We speak with him on an almost daily basis about various aspects of the company, he offers us tips on how to improve our beta version (which we will open up more to the public within the next 10 days) and has agreed to serve as a judge in our beta-testing competition that will accompany our launch and will reward an XBOX 360 and a plasma TV to the winner.

Our experience shows that networking works. We’d done all of the required visits to the “official” business angel organisations, the majority of which ended up being wasted time meeting with “investors” who have never invested in — and had great fear of — the Internet world. Oriol and I met at a networking event. We met Albert at another networking event because Didac wanted to filter our product via a trusted friend, and in the end, the trusted friend — Albert — ended up investing in our company. Similarly, we met Didac via a friend, Jaume Urgell, at another networking event. Jaume knew that we were looking for funding. At that point, it was only Oriol and me working in the company using our own resources. So Jaume introduced us to his friend, Didac, who he knew had invested in some other projects. None of the projects were related to the Internet, but Jaume felt that it might still be useful to introduce us in any case. When we first met Didac, he told us point blank that he had no money to invest at the current time, because he was already committed to his current projects. But we told him that we should still go out for dinner and drinks, where we explained the project to him before talking about life in general. Didac contacted us a week later and told us that he’d gotten access to some additional resources that he wanted to invest in migoa.com. He ended up investing in the project, because he had a good feeling about me and Oriol, which probably came in no small part because we were recommended by someone that he knows, respects and trusts, and because we were able to explain our project to him but also relate to him as a person during the course of dinner and drinks.

At the end of the day, what the VCs say is really true: It all comes down to the team, and the feeling that there is between the entrepreneur and the investor. It’s easier to generate a good relationship and positive feelings if you begin the relationship recommended by a trusted ally of your potential investor, and if you can confirm those positive feelings during your subsequent interactions with your potential investor without trying to hard to “sell yourself”. Desperation is not attractive.