This interview is part of our Infra Angels Spotlight series where we showcase the best angel investors in the infrastructure IT and cyber-security space and how they help founders build the next generation of modern software companies.
Dan Nguyen-Huu spoke to Edith Harbaugh, co-founder and Executive Chair of LaunchDarkly, a feature management, continuous deployment, and developer platform which has raised over $350M in venture capital to help teams innovate quickly, mitigate risk, and help developers better impact their business.
Edith told us about what drew her to founding LaunchDarkly and how her early experiences growing the company inform her philosophy as an angel investor to this day.
Working in tech, I had built and launched new products from scratch and led teams. But I really wanted to do more than just lead a business unit, I wanted to lead a company.
My co-founder, John Kodumal, and I had an idea that we believed could make software better. Continuous development and deployment wasn’t as popular, or as nuanced as it is today. Back in 2014, John and I were kicking around ideas for companies. At TripIt and Atlassian, respectively, we found a problem that we firmly believed we could solve. The early feedback we got was that it was too niche, however, we firmly believed feature management wouldn’t be niche, but would become the foundation on which companies build better software.
We were right. Today, LaunchDarkly has clients all around the world, helping companies like IBM, NBC, Square, HP and others take control of the way they roll out features, test products, and manage long-term control.
LaunchDarkly’s first investors were angel investors. TripIt, the company I was working for prior to founding LaunchDarkly, was acquired by Concur, which gave liquidity to the TripIt team. I knew that some of my coworkers were angel funding other companies. So, I asked them to invest in LaunchDarkly. For other angel investors, it was their first angel investment. But, they were confident because they had worked with me in the past.
So, that connection has always stayed with me. I learned lessons like asking for money when you want money, as opposed to hedging and asking for advice. Sometimes you just have to make the ask.
I was an accidental angel myself. I was giving advice to a colleague starting a company and looking for investors, but having trouble finding them. So, I invested and said, “Look you can take this and say Edith from LaunchDarkly is in. But unless they ask, don’t tell them how much the check is for.”” The check was for $100. I didn’t have that much money at the time, but I had my brand and my name. She ended up raising a successful round and went on to build a great company. But, that was my first foray into angel investing. I was just trying to help and I firmly believe that the definition of an angel is someone who helps.
I’m now part of the Bloomberg Open Scout program, where they match my own capital, and my usual check size is $25,000. I write an investment memo to document my thoughts and beliefs on why I’m investing, as I have a formal fund, administered through Angel List.
What I really look for in founders is perseverance, conviction, and determination. I like to be the first check in if I can, though it’s not required. I look for people who have an idea that might be overlooked or seem ahead of its time.
I’m often a sounding board on how to navigate the early days of a company, through fundraising, early hiring, and company building. I’ll help them navigate fundraising waters because after having raised over 350 million dollars across multiple rounds, I know what to expect. Sometimes when you’re going for your seed extension, Series A or B, you have a ton of questions and you just don’t know who to ask. Your board might not tell you how to get your A round. So, I'll help out at that stage with late-night phone calls, and emails.
I also provide founders with feedback and perspective. For example, I always encourage companies to send out monthly updates to their angel investors. It helps keep the company focused on “what have we done/not done in the last month, as well as gives angels something to react to - does the company need help hiring? Getting customers? Marketing? Customer intros? Sometimes, I get company updates that read more like a marketing newsletter than an update. I’ve responded to the founders and said, “Hey, this would be better if you sent me metrics and things I can react to.” I also sent the founders one of LaunchDarkly’s early angel investor updates, after redacting any sensitive info of course. Just having that example to work off of helped those founders move away from marketing-spin email updates to writing more transparent, actionable emails for their angel investors.
The number one job of the founder is to make sure that the company has enough money to execute while simultaneously trying to achieve product-market fit and take care of the team. Founders often ask “when will I reach certain milestones?”, or “when will I feel sure what I am doing is right?”, or “when will I have X many customers?”. I just try to remind them that the early days are very hard. You really have to put in blood, sweat, and tears in the early days. And eventually, with lots of hard work and patience, it will hopefully pay off. Not all startups do make it - I’ve talked to founders who are down to 2-3 months cash. Some have decided the best course is to shut down. Others have refocused and pushed through.
A big lesson for founders is to hold onto and treat your customers well, not just by saying you care, but by making sure they’re successful. Showing care through action counts. LaunchDarkly has users who have switched jobs 2-3 times, but they take us into deals at their new job every time. It makes being successful exponentially easier when you have an internal sponsor, a customer who you made successful, to advocate for you within their organization. Exponential success starts small. So, focus on your customers.
Also, pay attention to your early team. A small nimble team can move mountains, one rock at a time, and help you scale culture. I’m proud that our three early sales people and first three engineers are still with LaunchDarkly. However, I’ve also seen companies focus too much on “culture” and never acquire sufficient customers to continue.