As a dealmaker and entrepreneur, the elements of a venture that are most attractive to former Affy Tapple CEO Stuart Sorkin are an ability to fill an unmet need or improve on existing products.
“I’m currently looking into the early-stage food and related industry space, so I tend to find unique opportunities with great ideas,” Sorkin says. “But that’s just the opener.”
Disruption, he says, seems to be the sexy word now, but he doesn’t believe an idea has to be disruptive. Certainly there’s great opportunity in disruptive businesses. But, he says there are also investment opportunities where a venture addresses add-on opportunities created in the wake of category disruption.
“Sometimes you’re maybe the second or third one to the party, but you may be the better one,” Sorkin says. “So you’re not the disruptor, but you’re the one that’s perfecting the opportunity.”
Disruptors get the headlines — for example, the energy bar category had a couple disruptors that got big deals. But those disruptors created opportunities for many add-ons, some of which are finding success by filling gaps they created.
As he looks to invest in the earliest stages, he says what he’s finding now is that young people graduating from business school are pitching great ideas.
“It’s amazing when I’m judging pitch contests the ideas that are coming from these, and I’ll call them kids, that are just out of school,” he says. “They’re absolutely amazing and they’re all unique in their own way.”
However, what he’s finding is those ideas often don’t have marketplace support behind them — no capable management team that can bring those ideas successfully to market. Great ideas, he says, need to be supported by great executioners — people who can execute the plan — or people who can bring experience to a plan.
“Now it’s more important than ever to have both a great opportunity, great idea — something that has traction — but have really good talent to be able to execute,” he says.
Sorkin talked more about his investment approach and deal criteria at the Smart Business Chicago Dealmakers Conference. Catch the full conversation in the video above.