Tom "TK" Kuegler is a New England-based venture capitalist who grew up in Baltimore — and who hasn't quite left the city behind. He finds himself here quite often, visiting family and volunteering with the board of sponsors at Loyola University Maryland's Sellinger School of Business.
Lately, though, he finds himself in Baltimore on scouting missions — for the next hot startups.
Kuegler is general partner and co-founder of Wasabi Ventures, a Silicon Valley-based venture capital firm that funds and incubates technology startup companies. He's based in Manchester, N.H., but spends his time scouring the East Coast for promising entrepreneurs and their companies.
He's gotten plugged into the Baltimore technology scene, and by early next year, he expects to announce that Wasabi will invest in five local startups. Wasabi is also planning a competition in Baltimore in 2012, in which entrepreneurs will pitch their business ideas for a chance to win thousands of dollars' worth of funding and mentorship.
The Baltimore competition will be modeled after one that Wasabi is holding in New Hampshire next month, called VentureX. By the end of 2012, Kuegler thinks Wasabi could have a permanent Baltimore office.
Kuegler traces his own entrepreneurial streak to his early years attending public schools in Essex, where he sold candy to classmates for a profit and ran — and then sold — a landscaping business. He and a partner started a Web development business in the mid-1990s, and he's been involved in the Internet economy ever since.
The Baltimore Sun caught up with Kuegler during one of his recent visits.
Why do you keep coming back to Baltimore?
I still think of Baltimore as home, even though I haven't lived [here] in almost 20 years. I love the city. My parents still live in the area. From a business standpoint, about three years ago I started getting active at Loyola. They kind of hunted me down and asked me to be more active. Not only do I give money, but we take on [Loyola] interns. We've taken on about 100 interns from Loyola in the past three years.
What are some attributes of Baltimore's technology community that you see?
There's a growing kernel of a startup community. It's a kernel, but it's getting there. I think Baltimore is very ripe for a renaissance in startups. It has a lot of things that can make it great. It's got decent schools, a fairly low cost of living. It's got close proximity to D.C. There's a lot of things that could make it crazy successful. But it's going to take time and energy, and a willingness to sweat to make it happen.
Tell me about the kinds of companies you're interested in funding in Baltimore.
We'll probably do five startups in the Baltimore metro area [in the first quarter of 2012]. We'll probably do an announcement in January of the five. They're a little bit all over the place. … One is a B2B [business-to-business company] and there are a couple B2Cs [business-to-consumer companies]. None of them are in cybersecurity or government.
How is launching an Internet company different now than, say, the mid-1990s?
When I first got into the business, Internet startups would cost you so much. [Web] hosting alone would cost you thousands a month. Now you can stretch dollars a long, long way. Prototyping and launching can be done so cheaply now.
You're active all over the East Coast in looking at opportunities for investment. How does Baltimore compare to larger markets, like New York and Boston or Silicon Valley?
Most of the people we fund don't have any revenue and, heck, they don't even have a prototype. In almost all [investments in startups], we're putting in talent, not just money. It's almost like dating. It's more important that we like the founders and the founders like us.
How big is Wasabi's typical investment in a company?
It's usually in the $10,000 to $50,000 range. We're usually not leading someone who is trying to raise a half-million dollars. Our involvement is more from an incubation and acceleration standpoint — that way our investment gets multiplied. We don't take cash for our services; we take equity or a convertible note.
So many people think they can't do an Internet startup because they don't have a computer science degree or much technical knowledge. What's been your experience with technical and nontechnical founders?
It might be around 40 or 50 percent of our founders are nontechnical. Some of our most successful startups are not founded by engineering-based people. I have this premise that startup entrepreneurs, they exist all over the United States, all over the world. And they didn't have to go to Stanford or get a computer science degree. It's inside all kinds of people.
How do you and your startups measure success?
One of the things that drives me crazy about the startup world is: What's wrong with building successful companies that are fun to run? Fifty years ago, entrepreneurs didn't sit around wondering what their exit was going to be. As long as they're cash flow-positive, what's the hurry to get an exit? Traditionally in our history as a country, nothing was greater than building something for your children to run. But have you ever heard of an Internet venture being passed onto someone's kids?
What skills or attributes do you look for in a startup founder that you hope to invest in?
I have very distinct criteria. Because we're in that early stage, often the idea doesn't matter. The idea is never 100 percent right. It's about adaptability. Can the founder listen to what the market wants? Some of the most successful … companies we've ever had [were firms whose] first product was completely wrong.