Investor Discussion Series: Alex Ledoux of Ledoux Ventures
/I recently caught up with eCommerce angel investor Alex Ledoux of Ledoux Ventures. Alex is a serial entrepreneur and investor who has invested in Shop Succulents and Inventors Launchpad.
What do you look for when investing?
I look for smaller consumer goods and eCommerce companies doing $1-$4M revenue, preferably in fragmented industries. I’m not a fan of pre-revenue companies. It has to be a business that I can bring my skills, such as internet marketing and business development, to bear and accelerate the company’s growth. I’m especially interested in companies that do poor or little marketing that I can step in with and rapidly scale businesses.
I aim to take a large minority stake and look for founder’s who are hustlers and willing to learn and improve. Unlike a more traditional technology focused angel investment I generally look to grow and sell my investment within a 2 to 5 year timeline.
In terms of vertical I’m more opportunity driven than having a specific thesis I look to invest around.
As primarily an eCommerce investor what are your thoughts on Amazon?
Dynastic companies have been built in the past and will continue to be built. Don’t be afraid of Amazon. The companies I look at build a brand outside of Amazon but they don’t ignore it. I’m fine with investing in companies that do a large amount of revenue from Amazon even though the problem there is you don’t own or have access to your customer data. Amazon ideally should just be another channel but not your business’s core.
In general, Amazon is slow to catch onto consumer trends so you can usually get ahead of them, at least for a couple of years.
Especially early stage for eCommerce - how do you test whether the product has any real legs or is just a fad?
I structure my deals in such a way to limit my downside if the product turns out to be a fad.
What consumer trends are you interested in investing in 2018?
I’m more opportunity focused and less into trends. However, one area I’ve been looking at is getting involved in the board game space.
What are some resources you use to stay up to date on consumer trends?
Facebook, podcasts such as The Tim Ferriss show and eCommerce Fuel.
How do you source your deals?
Finding good deal flow is hard. If you are doing things right in eCommerce you often times don’t need investors as your business will generate substantial cash flow. Given that, I put a major focus on bringing much more than just money to the table. I look to be seen as a partner with capital, instead of an investor. I look to bring marketing and business development to any business I get involved in. As far as sourcing deals, Reddit has been a shockingly good place to source deals and get referrals. I also attend as many events as possible. I’m planning to start a podcast to build more of a brand for my investment firm as well as partner with accelerators. I’ve also had some success with cold outreach to companies I’m interested in. I also want to get deeper involved with the angel community.
Any investors you personally look up to?
A handful of angel investors that I’ve closely worked with.
Any predictions for 2018?
Amazon will continue to dominate. As an eCommerce business owner you really need to look at how you can best use Amazon’s growth to your advantage without becoming purely Amazon focused. From a marketing perspective, I also think Amazon PPC and influencer marketing are musts for 2018.
Anything else you think potential consumer investors or consumer entrepreneurs should know?
It’s amazing how many people I meet with good ideas but aren’t willing to make the jump to entrepreneurship.
On the other hand some people think if they just start something everything will just come naturally.
I’m constantly amazed by how few companies market correctly. Many companies blindly trust marketing agencies. Or they don’t even get the basics like having a high conversion optimized website. Many companies never take the time to learn who their customer is and look at he data.
Marketing and being data driven should be the first focus of any consumer company.
