Xconomist of the Week: Roger Ehrenberg Plans for Deeper Investments

4/5/12Follow @jpruth

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play by startups, he says, can help position data from legacy systems to be more useful. “That is the big part of the edge these new companies have relative to the incumbents,” he says. Ehrenberg points to BillGuard in New York, one of IA’s investments, as an example. BillGuard scours consumers’ credit and bank card transactions for potential fraud by using crowdsourced information from other users.

IA also backs companies that are developing new systems for credit scoring transfering money. Ehrenberg says other sectors have caught his eye, as well, including education. In that space, IA has invested in New York’s Coursekit, a graduate of the NYC TechStars summer 2011 program.

Though many of IA Ventures’ investments are in the New York area, Ehrenberg says he has backed companies in Boston, San Francisco, Los Angeles, and abroad. Many of the startups he funds from overseas wind up establishing a physical presence in the United States. Such companies, Ehrenberg says, look to the U.S. as their primary growth market.

Two-year-old DataSift, an IA-backed company founded in Reading, Britain, currently houses its CEO and business operations in San Francisco. BillGuard, founded near Tel Aviv, Israel, relocated its headquarters along with its CEO to New York. “Geographic expansion is common among many of our companies, especially given the nature of their disruption,” Ehrenberg says. “It lends itself to moving to other markets.”

Before founding IA Ventures, Ehrenberg proved his own savvy for backing companies. He previously made angel investments through IA Capital Partners, funding such companies as TweetDeck, Solve Media, and bitly. Prior to IA Capital, he was CEO of DB Advisors, a hedge fund trading platform within Deutsche Bank. Now Ehrenberg is excited to see startups finding innovate ways to leverage data, especially in his home territory of New York.

Ehrenberg says while New York’s ecosystem is young compared with more mature venture communities, the city’s unique strengths make it stand out. Financial services, advertising technology, fashion, and merchandising are all sectors where New York offers opportunities for startups to create killer new ideas, he believes. “You’re innovating right in the middle of commerce [here],” he says. However, he says, the local innovation community does need to see more entrepreneurs who pull off huge exits and then become angel investors to support the ecosystem—what Ehrenberg calls a virtuous cycle. Close connections with academic institutions such as Columbia University and New York University are also necessary, he says, to help the startup scene evolve beyond this nascent phase. “That takes a generation,” he says. “We are now laying a positive and healthy foundation for that.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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