Mark Suster, partner at Upfront Ventures and author of a popular investment blog, spoke with FOX Business's Deirdre Bolton on Wednesday, explaining the tradeoffs between profits and growth.
In response to eBay’s (NASDAQ:EBAY) widespread security breach, Suster says "consumers need to be educated on password management" He urged them to not have the same password for all of their websites.
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Although eBay has a large enough customer base to survive, Suster warns that an attack can be far more deleterious for young startups.
“If you lose trust with the young consumer, you could be out of business," he says.
In part because of security concerns, Suster says “we care deeply about the quality of the technical team." He focuses on startups in adtech, digital content, consumer internet and software as a service (SaaS) businesses.
Suster’s investments include Adly celebrity endorsements, awe.sm for social marketing and app testing platform Burstly. Suster’s ad personalization investment, Gravity, was recently acquired by AOL for $91 million and YouTube multichannel network Maker Studios was sold to Disney for $500 million.
“There’s a tradeoff between profits and growth,” Suster says about his early stage investment strategy. “If you’re a fast growing business that can acquire customers cost effectively, we’re interested.”
Suster joined Upfront Ventures in 2007 after a successful career as an entrepreneur. Salesforce (NYSE:CRM) acquired his startup, Koral, and BuildOnline was bought by SWORD Group.