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Tim Chen, founder of Hyperpilot and angel investor in Jasper, MotherDuck, Flatfile

This interview is part of our Infra Angel Spotlight series where we showcase some of 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 Tim Chen, managing partner at Essence Venture Capital, as well as the former CEO and Co-founder of Hyperpilot, which was acquired by Cloudera in 2019. He has been an avid angel investor in companies like Jasper, Flatfile and MotherDuck.

Tim, what was your experience as an operator? How did that lead you to angel investing?

Before I founded a company or invested myself, I worked for 16 years as a software engineer. In particular, I worked on infrastructure projects in search engines and games, always focused on the backend. I had contributed to open source projects as well, such as the Apache Committee when I joined Mesosphere quite early on.

Eventually, I founded Hyperpilot, where I learned a lot about raising money and building a business. We raised our first seed round from NEA and Bessemer in 2016. Hyperpilot was focused on using a machine learning approach to scale and configure container infrastructure. My company was eventually acquired by Cloudera in 2019. Once I was at Cloudera, I started to dip my toes into investing.

Interestingly, after the acquisition, I received a lot more inbound interest to angel invest from founders and VCs. Having gone through the startup journey myself, I found myself having a lot of empathy for founders. It was natural to connect with them as many of the problems they were facing, be it fundraising, product challenges or otherwise, were issues I had faced just a few years back. Once I invested in a few companies, more names kept coming up, and founders in the space began sharing my name as a potential investor.

How do you help founders once you invest?

When I first started angel investing, I was less strategic and more opportunistic about it. Though the common theme I kept noticing is that given how lonely the journey can be, founders needed a support group that was beyond what was offered in the traditional VC ecosystem. This was particularly true for those with a technical background.

When I was a founder, I saw that VCs spoke very differently than how other technical founders spoke to each other, which sometimes made it more difficult to connect with them. The VCs understand markets deeply at a very high level and often give advice based on patterns. Although this advice can be super valuable from a business-building perspective, it’s often not tactical and specific enough for technical founders. That’s part of why I think I’m well-positioned to help founders as an angel. In the categories of data, devops and security, I try to be very well versed and I speak the language of a technical founder.

My own experience working with angels during my startup has shaped the way I approach my own style of investing and helping. Ameet Patel, for example, had a profound impact on me and to this day, I really admire his approach. He struck a good balance of being personable and sharing his own stories and experiences vs. talking about his domain expertise in infrastructure IT. When I became an angel investor myself, I wanted to emulate this style.

What do you look for in the founders and companies you invest in?

When I first started investing, I focused most of my time on the product– is it something I would use? What about my colleagues? I also paid a lot of attention to the problems the product was solving, as well as the quality of the team. I still very much care about these areas, but I now try to build my own theses about the infrastructure space, then try to find teams who are bringing those ideas to life. Today, I’m using a combination of building my own theses and finding companies that are solving interesting problems backed by great teams.

When it comes to what I look for in a team, I seek to understand what the team does really well and where they may need to grow. For example, there are plenty of technical founders who have never sold anything, and I ask myself if I believe they can learn to do so. Do they have curiosity, open-mindedness, and the hustle and ambition to get there? Growing with the company is equally important to growing the company itself.

What are some trends you’re seeing that you’re interested in investing in?

With the advent of large language models (such as GPT3 and 4), there’s a need for more dev and infrastructure tools in the space. I’ve talked to a lot of researchers to try to understand these trends better– it’s part of why I started backing Jasper.

I’m interested in companies that fill gaps in the middle infrastructure layer, particularly the compute layer. There are companies coming up with new abstractions that are adaptable. They provide a 10x improvement in user experience, which is huge.

Companies that are changing the landscape of how people interact with data and compute overall are interesting, as well. For example, WebAssembly is changing how apps are deployed (in your browser) and DuckDB is changing process databases. These products are exploring if we can run virtual machines in browsers in sessions that could create new edges and web stacks of new applications.