Ken Hall is a Vice President at DeepWork Capital and supports the firm in sourcing and executing investments, fund operations, portfolio management, and more. Ken is also the Chair of Startups for the Orlando Tech Council and serves on the advisory board for Lucy Labs, Home Lending Pal, and IBM’s Hyper Protect Accelerator.

Prior to DeepWork, Ken worked for IBM in New York City, where he held numerous roles for IBM in Corporate Development and Corporate Venture Capital. In his four years at IBM, Ken supported over $2B of deal value for some of the company’s most innovative brands, including IBM Watson, IBM Blockchain, Watson Health, Hybrid Cloud, Global Business Services, and IBM Automation. 

Ken completed his undergraduate studies summa cum laude and the top of his class at the College of Business of the University of New Haven. He received his MBA with top honors from Boston University.

What was your journey that ultimately led you to the venture capital space?

My path really began with doing free work and demonstrating my value. I went back to business school to break into VC or private equity. A lot of my family was involved in entrepreneurship and I wanted to be in that world, but I was always more drawn to the investing side of the equation and supporting those opportunities because of how important it can be to find funding at the early stages of a business. I did two unpaid internships during business school to get exposure and credibility. From there I tried to do freelancing and doing consulting work for VCs; one firm was foolish enough to hire me, and thought I did a good enough job, and then another firm hired me and then another. The fourth or fifth firm wound up being founding family of Motorola and then the founding family of The Carlyle Group. This gave me the confidence and valuable experience to further my career in venture.

Around that time, I was also in a VC case competition – again, I was willing to do free work and put myself out there to demonstrate to VCs that I can do this type work. One of the judges there was impressed with what I had done and ultimately became my mentor and helped me navigate my career in venture capital. When I decided to leave IBM, she was really supportive in helping me find the right opportunity.

During COVID, we saw several investment firms and startup companies moving to Florida. How would you categorize the startup scene in the Florida and what are you doing to be involved in it?

I would categorize it as exciting. I don’t think Florida is quite there in comparison to SF and NY, but it has all of the potential ingredients to make it special (taxes, STEM graduates, infrastructure, etc.). In terms of progress, the two things Florida struggles with is being somewhat geographically challenged in the sense that there is no major hub but instead a vast network with many hubs: Tampa, Orlando, Jacksonville, Miami, Space Coast, etc are all gaining notable traction. The other challenge is the relatively small amount of institutional capital flowing into venture. As an asset class, venture capital has a long history of generating outsized returns in San Francisco, New York, Boston, Austin, etc., and this helps VCs raise larger funds and deploy more capital into startups. Relative to institutional investors in those hubs, investors in Florida are less experienced in the VC/PE asset class.

With all that being said, the state is nothing like it was two to three years ago. Allocations into venture will continue to grow as LPs get more comfortable, and this will fuel more investment into startup companies. The other day I was talking to a technology founder living in NYC who was saying how badly he wants to move to Miami to have more opportunities. That’s something I didn’t imagine I would hear when I moved to Florida.

To stay involved, I serve as the chair of startups for the Orlando Tech Council where I help with programming and visibility, make them aware of grant funding. For example, right now I am holding a dinner exclusively for founders in the area to give entrepreneurs in the area a platform to meet. I’m also organizing a pitch competition in October which will be the flagship event at the biggest tech conference in the area. I am also frequently speaking at universities and accelerators
in the area just to try to help the local startups.

Why do you think activity has picked up in places like Florida and Texas? Was this all COVID-related or something else?

Not just Covid-related, but I will hit on that first. Covid helped accelerate things that were already in motion: it helped facilitate shift of people out of cities and redistributed talent and resources to these markets that previously have not existed. Now there is top technical talent moving to new markets, and investors changing cities has further increased activity. A random example with Covid are 80 year old citizens who bought groceries online for the first time ever and are now never going back. The notable change in consumer behavior was definitely a Covid-specific implication in the markets.

Beyond Covid, you simply no longer need to be in NYC or SF to build a great company anymore. In tech, you are able to build and distribute software remotely now. You can leverage open-source code and API technologies from the smartest minds in tech. These are effectively building blocks in key resources where access has been democratized, and you can build and distribute from your cell in a beach house — you do not need to be in a 4,000 square foot facility anymore. You also can’t talk about the increase in tech hubs without talking about the shift in how tech is bought. This changed from making seven figure sales on the golf course into this remote purchase in which we are all buying every day and rarely engage with humans. So, I would say this shift outside the traditional tech hubs is partly due to Covid, yes, but the shift was already underway due to ongoing changes of how technology products are being built, distributed, and purchased.

What are some of the key items you evaluate when looking at a potential investment?

It really all boils down to four things. The first three are, the market, the team, and the product. I’ll hit on these three before circling back to the fourth one, which is more unique to us.

Market is really about understanding a picture and a story of what you think a space will be like in five years. If you are betting on Uber in 2010, you are betting on massive adoption of smartphones by 2015 or 2020, and that the adoption of these super computers will enable better efficiencies in the taxi or ride sharing market, and that this solution would be large enough where it will deliver meaningful, fund-returning results to an investor. One thing we look as is the “why now”, and in that example, it would have been the smartphone adoption creating accessibility in the market. The
“why now” could also be demographic shifts and technological changes. Things like that is what you look for in the why now. With the team, we look for two things, one being are they uniquely positioned to solve this problem and will they be maniacally focused on solving it. For the first part, you do not have to be three-time successfully excited entrepreneur but have something that makes you unique to solve the problem.

With the product, it is really about the belief that the product solves a real need in the market and does so in a way that is materially better than things in the market are now. People hate change and organizations despise change. The product or service can’t just be five percent better or five percent cheaper, it has to be materially better than what exists now.
The fourth thing we look for is some kind of capital efficiency. As a firm, can you do what you do in a capitally efficient way? This is related to the points I mentioned before on the institutional allocation in venture because , unlike some mega funds, we cannot help a portfolio company scale by sheer force. Does your firm have some cost effective means of scaling to make it a little more attractive to us? With the current state of the economy, I am starting to see it more and more now,
as VCs are now starting to look at this and go into preservation mode.

Are there any recent additions to your portfolio that you are particularly excited about?

One of the things I like about the DeepWork is that I get to see a lot of cool stuff in different areas instead of being in just one market segment or vertical. Our most recent investment is Home Lending Pal, which is a blockchain based mortgage platform that anonymize applicant data to remove discrimination in the lending process. That company is based right in Orlando, Florida. Another recent investment was Genascence, a clinical-stage biotechnology company using IP from
the University of Florida. They are developing life-changing treatments of prevalent musculoskeletal diseases with gene therapy. While two companies are both quite different, they are solving real different problems in the world led by teams that are really passionate about change. That is the commonality.

Do you have any advice for MBAs that are interested in moving into the VC space?

Based on my career, my advice for anyone would be to do work that demonstrates you can do the career in venture. It seems pretty obvious saying out loud, but I was just trying to get my fingers dirty. When it came time to join IBM Ventures or DeepWork Capital, I had prior work to point to and people that could speak on my behalf.

The other thing: get more technical. A lot of the things I learned in business school are helpful, but it really helped to get more technical. If you can take certifications online or a class in computer science with the objective of combining business and financial education with technical skills, you will be very well positioned for a career in ventures. Focusing solely on business for two years, you wind up coming into venture needing to be more technical.