When Mike Maples came out to Silicon Valley in 2005 - before YouTube, Twitter and Facebook were household names - he set out to fill a void in the investing spectrum - the one between angels and venture firms. Five years later, his firm, Floodgate, is a leading "super angel" or "micro-cap VC" firm helping to fund companies seeking $200,000 to $500,000 on the low end to $1 million at the high end. His firm is also one of the early investors in Twitter with some $25,000 that was re-invested into Twitter in 2007, after Twitter co-founder Evan Williams' company Odeo folded. Mike was originally an investor in the podcasting company.
"$500,000 is the new $5 million," said Mike, in a recent interview with me at Vator's new studios.
This amount is above what angels would typically cough up, and less than what typical venture capitalists would pour into a company at an A-round. It's a relatively new category, though other firms, such as First Round and True Ventures (with $100m-plus funds) exist on one end, while Jeff Clavier's SoftTech VC, Ron Conway's SV Angel, Aydin Senkut's Felicis Ventures exist at the other lower end.
Floodgate has $35 million under management, and so far, so good. Either Mike's been lucky or smart, or most likely both, as he's invested in some of today's leading startups - Twitter, Digg ($25,000 investment in 2005), and Chegg, to name a few.
Certainly, if Mike were out raising another round, it wouldn't be a problem, given his track record of spotting what he calls "Thunder Lizards" - these are extraordinary Godzilla-like startups, combining amazing genes and miraculous external events.
In this interview (the first of several), Mike and I talk about how his fund is doing. For instance, we talk about what's really happening at Digg, Mike's second investment after Evan's Odeo/Twitter. As many tech readers know, Kevin Rose has taken the helm from Jay Adelson. "I think people underestimate Digg," said Mike.
Mike also talked about themes he's investing in beyond group communications (Twitter) and a citizen's media play (Digg) and online education (Chegg).
Today, Mike won't be investing in user-generated content sites, as he feels they're largely played out.
The big areas are "social commerce and big data," he said.
Groupon, which crowd sources coupons, is a great example of a company that's doing well in the social commerce space. Floodgate is not an investor, to Mike's dismay. But Mike would put ModCloth, one of his investments, as well as Gilt Groupe, which provides luxury goods at low prices, in that category.
In the "big data" area, he points to Wordnik, a Floodgate portfolio company building a corpus of words for those logophiles out there.
Floodgate is also an investor in Gowalla, a location-based service that competes with fourquare.
Asked whether he thought Gowalla was getting steamrolled by foursquare - at least in the media - Mike said: "I think Gowalla has a better product. That's my story and I'm sticking to it."
In the Q&A space, Mike has invested in Formspring, a service he calls a "reverse Twitter."
Watch the interview for more insight into Mike's investments and areas that interest him. In our next interview, we'll talk about how Mike spots Thunder Lizards.