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Angel Q&A: Arteen Arabshahi

Arteen is a Senior Associate at the seed-stage investment firm Karlin Ventures. Before investing in enterprise software and marketplaces at Karlin Ventures, Arteen spearheaded the launch of Built In LA, an online community for digital entrepreneurs and innovators. Prior to Built In LA, his passion for startups flourished while helping run operations at Excelerate Labs, now Techstars Chicago.

Startup Angels: How did you get your start? What are some interesting companies that you have invested in?
Arteen Arabshahi: We fund seed and early stage companies based in Los Angeles. Karlin is an affiliate of Karlin Asset Management, which has roughly $1.5B under management. At Karlin Ventures, however, our usual investment size is $250k to $1.5 million. We focus on companies that are post-launch, post-seed, but pre-Series A. I started college at Santa Clara University, where I was Pre-Med, but realized that I also wanted to do business, so I transferred to the University of Arizona where they allowed me to do both. After a short internship at a NY bank, I got some exposure to tech and knew I wanted to break into it. I cold emailed 150+ people to get a job in tech, which ultimately was with Excelerate Labs (which later became Techstars) in Chicago.

Afterwards, I moved to LA to launch Built In LA and then took this opportunity at Karlin, where I’ve been for nearly 3 years. We’ve invested in over 40 companies, including companies like Laurel and Wolf, a marketplace for interior design; Noun Project, a marketplace for icons; and Bark, a platform to help keep kids safe online without compromising privacy or a trust with their parents.

SA: Do you prefer to invest in certain verticals?
AA: We don’t really have specific verticals that we focus on, but split the companies that we invest in into two sectors: enterprise and marketplaces. Within both, we do like it when companies take a vertically-specific approach, but we are agnostic around what verticals they tackle specifically. We like it when companies approach an existing market with a new and more efficient way of doing things.

SA: Why do you invest in startups?
AA:Back when I took the job at Excelerate (now Techstars) Chicago, I knew tech was the industry that I wanted to be in because it was the closest industry I found to a meritocracy. While we still have a ways to go to perfect “true meritocracy”, it was definitely less bureaucratic than anything else I’d been in. What I love about investing is you can expand your own capacity while helping people do more. So, rather than focusing on just one company, you can focus on growing 40 companies. It’s also a great platform to meet brilliant people.

SA: What do you look for in entrepreneurs?
AA: There are a thousand things. It’s not just one thing. Some of them are expected. They have to have a certain vision in mind. You have to have this in mind and be able to paint it for other people. A lot of these things are driven by the founder. Secondly, there’s attention to detail, that includes being on time, not having typos, etc. A lot of the investment is based on trust and paying attention to the details helps establish that trust. It’s also very important that the entrepreneur strongly believes in what they’re doing. People that go into this with fifty-fifty sureness will not succeed.

SA: What would you recommend to new angels in your community? What about individuals who are on the fence about angel investing?
AA: If you can help, help. Same thing for VCs, unless you force yourself to be helpful, nobody will do it for you. For people who are on the fence, don’t invest. If you’re not committed to doing it you won’t be helpful and you’ll probably lose money.

SA: Biggest mistake you’ve ever made?
AA:The obvious answer is not trusting your gut instincts on a founder. In general, mistakes are usually made when investing in an idea that you love but a founder who you’re not entirely sure on. I’m more about the founder than the idea.

Also, so much of every step of the way is dependent on believing in yourself. It’s crucial to stay humble, but a level of confidence is necessary. I firmly believe now that I can accomplish anything within reason.

SA: What does the ecosystem need next?
AA: I recently wrote something in something in TechCrunch discussing exactly this. There’s definitely a lack of later stage capital and mentorship. There are plenty of companies, such as Cornerstone OnDemand, that are giving back to the community once they’ve made it. The founder, Adam, does a lot for startups in Los Angeles. We need 10 more of these. A lot of Los Angeles has a mentality of people who exit and chill on the beach, which is fine if that’s what makes you happy, but we need more people who are interested in reinvesting their winnings. We’re missing that flywheel effect of exiting, reinvesting, and building again.

SA: Where do you see your market in 5 years?
AA: I think Los Angeles is on par with anywhere else. Nothing will beat Silicon Valley, nor should we aim to. New York, Los Angeles, a few other cities are good contenders to be second place. People who wanted to found a tech company in Los Angeles 5 to 10 years ago, were considered to be at a disadvantage. Now the playing field is equal.

There’s potential for the ecosystem to be massive five years from now. It’s definitely trending in the right direction. There’s interest, capital, mentorship, and role models. People just need to do more of it. Look at New York City, there are plenty of companies that’ve grown there and they have a lot of success stories. Los Angeles has plenty of medium-sized startups, not huge, but I’m optimistic that these companies will continue to grow and we’ll also see some new entrants in the near future which will really catapult the city to the next level.

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