An Interview with Thomas (Yong-il) Ahn, founder and CEO of Mad Ventures, Inc.
Thomas (Yong-il) Ahn is the founder and CEO of Mad Ventures, Inc. and directs the overall vision and operation of the company. He is an active entrepreneur, an expert in technology research and also in nurturing technology start-ups. Thomas has successfully incubated several IT companies in Korea including Mobile Culture, iCity and Acrotech. Prior to Mad Ventures, he was a venture capitalist with Hanmi Technology Investment and has taught various topics in entrepreneurship at the Korean Venture Capital Institute. He holds a B.Sc degree from POSTECH in Korea and a B.Com degree from the University of Victoria in Canada.
Yaron Bazaz: Hi Thomas, How did you find yourself involved with Venture Capital activities?
Thomas (Yong-il) Ahn: “During the B.Com program at UVic, students are required to have a industry internship of one year (co-op). I was fortunate to find a position at a small Korean conglomerate - Wonik Group which placed me into their newly opened division called the “Strategic Planning Team”. After starting from the absolute bottom of the corporate ladder (I got to know the photocopier very very well), I soon found myself flying around the world working on multi-million dollar negotiation deals for the company.
After my internship was over, I went back to UVic to graduate and I was offered a formal full time job at Wonik. Since I knew how much work was involved in taking a job at Wonik, I asked for an outrageous amount of money. I was surprised that Wonik accepted my pay increase of more than 2X what I was getting, but quickly found out that I was now getting a higher compensation than any of my own supervisors. Fortunately, Wonik had acquired a venture capital firm - Hanmi Technology Investment Co. and could place me where they could support my salary. The moral of the story? Sometimes GREED pays!”
Y.B: Based in Victoria, BC you are the owner and manager of an early stage fund called the MAD Ventures. What distinguish your fund from other early stage funds in the western Canada/ US Pacific Northwest area?
Thomas (Yong-il) Ahn: “What distinguishes us from others? A funny name for a venture capital firm 
Seriously, the MAD in Mad Ventures stands for Milk And Diapers….we know what it takes to nurture a startup to success…
We focus on the earliest of the early stage…basically something other investors are typically unwilling to fund: pre-revenue, pre-prototype, pre-proof of concept, pre-patent, pre-incorporation….we have the ability to review the concept/idea stage and decide whether it is something we would like to get involved in or not.”
Y.B: What’s the size of your typical investment?
Thomas (Yong-il) Ahn: “The typical size of an investment is around $100K. Mad Ventures is prepared to do follow-on investments.”
Y.B: How Y Combinator’s Model inspirited your investment strategy?
Thomas (Yong-il) Ahn: “Although we keep a low profile on our investment strategy, we are happy to see the exposure Y Combinator is recently getting. We agree that in today’s world of technology investment, it is about “Grow Big Cheap” rather than “Grow Big Fast” like in the late 90s, the dot boom days. Y Combinator is smart and pressuring the traditional VCs with deals to capture the earliest of the early stage companies and investing small amount of capital to numerous startups to see which ones “stick” and which ones don’t. Today, it is not about how much money a startup gets that determine the success of the startup, it is rather the level of support and coaching that is critical in how the venture will do.”
Y.B: What is your Investment focus?
Thomas (Yong-il) Ahn: “At Mad Ventures, we focus on Nano, Bio, and Wireless Technologies. We’ve also done an internet deal last year.”
Y.B: What are the qualities you are looking for in an investment opportunity?
Thomas (Yong-il) Ahn: “There are two qualifications for a Mad Ventures investment: It needs to be able to “change the world” with its technology AND it needs to have a market potential of at least $100 Million (market cap).”
Y.B: What is your value proposition for your portfolio companies?
Thomas (Yong-il) Ahn: “We provide the total support infrastructure for early startup companies to hit the ground running towards success. This approach has proven to be highly effective in taking our portfolio companies to the next level while preserving the limited financial resources of the startups.”
Y.B: Present us please several of your leading portfolio companies
Thomas (Yong-il) Ahn: “Our current portfolio contains:
- Sweet Power Inc. (Glucose Fuel Cells for implantable medical devices based on Nanotech technology) www.sweetpower.com
- KeyZap Inc. (Cellphone enabled secure financial transactions based on Smart Chip technology) www.keyzap.com
- Hana Project (still under stealth mode)
- BoratWars (Web browser game based on the Borat movie with a Google AdSense revenue model) www.boratwars.com
Y.B: With a finger on the nano tech early stage arena pulse, what are the most significant trends/ developments we are witnessing now and about to witness in the near future?
Thomas (Yong-il) Ahn: “The tremendous amount of interest and capital focused on Solar and Cleantech areas utilizing Nanotech materials”
Y.B: Can you elaborate on that?
Thomas (Yong-il) Ahn: “What Mad Ventures is looking for is an opportunity in nanotechnologies empowering the production of transparent solar cells. Such transparent solar cells replacing windows of buildings around the world could prove to be a tremendous market opportunity in the Cleantech space.”
Insights
Y.B: I have limited knowledge about the Korean early stage technology scene. What hot there right now?
Thomas (Yong-il) Ahn: “Korean technologies in the Wireless sectors are very advanced. The Korean cellphone has already replaced (in their mobile form) the TV, wallet, computer, GPS unit and home monitoring device. It would be interesting to see how such advanced technologies gets filtered into the North American markets.”
Y.B: What stop the introduction of all-in-one appliances in North America’s market – the regulations barriers?
Thomas (Yong-il) Ahn: “We find that it’s not the technology, nor the regulation barriers that delay the implementation of these advanced mobile technologies in North America. It is the consumers themselves. Although the recent iPhone fever in the US has started to encourage mobile device makers on the North American market potential, most North American consumers were quite content with a basic cellphone that only did voice calls. It is after seeing (and in some cases, experiencing) all the advanced utility of what a mobile device can be from non-North American travellers and the benefit of mobile email devices like BlackBerries that the North American market now is ready for the influx of advanced mobile devices. I chuckle a bit when I remember those cellphone commercials of a few years ago when the main selling point of the device was that it still can do voice calls after having a truck drive over the phone.”
Tips
Y.B: Any tips you would like to contribute for other investors interesting in the early early stage sector?
Thomas (Yong-il) Ahn: “I highly recommend both investors and entrepreneurs to read Guy Kawasaki’s “Art of the Start” book. I would also like to introduce Guy Kawasaki’s Video for entrepreneurs who can’t find the time to read his book. This 40 minute video is basically the whole content of the book!;-)
Y.B: Any tips for entrepreneurs seeking first round investment?
Thomas (Yong-il) Ahn: “Entrepreneurs need mentors. Lots of ‘em. I recommend that each entrepreneur seek out at least 5 mentors and be advised on difficult decisions regarding their ventures. It’s your company and your decision, but there’s a big difference when you make your own decisions after consulting your mentors and when you don’t.
In addition, I would also like to recommend ALL startups to read this article: http://paulgraham.com/die.html by Paul Graham. As long as you don’t die…you become rich! (This will motivate them to survive, hopefully.)”
Y.B: Out of office, what are your preferred leisure time activities?
Thomas (Yong-il) Ahn:
Y.B: “When I’m not racing cars at Western Speedway on Vancouver Island, I enjoy my time with my family, especially playing the latest Nintendo video games with my 8 year old son. I also put in a golf game or two when I can find the time.”
Thomas (Yong-il) Ahn: “am currently working on my third university degree in Philosophy at UVic. One of my life goals is to set up a non-profit organization to help people in need. I plan to utilize my Philosophy education towards that goal.”
Y.B: Thanks a lot for your time and all the best
Thomas (Yong-il) Ahn: “My pleasure Yaron”
[…] Thomas Ahn, founder and CEO of Mad Ventures, reached out to me today and as I Googled him I found an interview he did with Yaron Bazaz. Thomas suggested that anyone looking for first round investments should read Paul Graham’s post titled, “How Not to Die“. I recall reading the post back in 2007 when it first went up, but I reread it this evening. What a powerful post ~ you need to read it, twice. […]