I am not only providing capital, I am providing partnership and mentorship. I am working right now with an awesome minority businessman who wants to take the restaurant industry by storm providing eco-friendly solutions to all restaurants and venues, like cups and straws and spoons that normally destroy the environment. And I am looking into new opportunities all the time where I can be involved and focus on quality, not just quantity. For me, life isn’t just about money. It’s about connection. It’s about energy, the energy we all get the chance to bring to the party for our brief time on Earth. Are you bringing good positive energy with a focus, or not?
I had the pleasure of interviewing Ted Foxman. He began his career at Eagle Test Systems, a leading manufacturer of semiconductor test equipment based in Chicago, where he served eight years as Chief Operating Officer.
During his tenure, he personally oversaw the sale of more than $550M in company stock, including a $110M investment from TA Associates, a leading $12B technology private equity firm. In 2006, he led the Company’s IPO & Secondary Public Offering for $100M & $95M, respectively, and in 2008, led the sale of Eagle Test to Teradyne (NYSE: TER) for $365M.
Following the sale of Eagle Test, Ted and his wife, Laura, spent the next 8 years focusing on their four children, and in late 2016, they moved to Los Angeles. Since 2016, Ted has established multiple businesses, including Bedford Road Entertainment, a management, financing and creative firm focused on the development and production of feature film and television content. He also established a luxury real estate development firm, which currently has more than $30M in development in Beverly Hills. Ted also established an investment group focused on making investments with high social impact in minority owned businesses, and in early 2019, finalized a partnership with Happy Ice, a frozen dessert company founded by a young, Black entrepreneur named Lemeir Mitchell.
Ted holds a Bachelor of Science in Microbiology from the University of Wisconsin Madison and a Juris Doctor from the DePaul College of Law-Chicago.
Thank you so much for joining us! Our readers would love to learn a bit more about you. Can you tell us a story about what made you decide to become an angel or VC?
It was a combination of a couple of things. First, I made some money in my own first chapter, so I was in a position to do something with it. Second, my mindset has always been to find a way to do something good. So, I thought, why just settle for making money on an investment when you can also try to find a way to help make someone’s life better or give them an opportunity that they may otherwise not have? I was lucky to have the opportunities I did in my life, so I want to give access to others to learn from my experience, not just write a check and walk away.
What you are doing is not very common. Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing in particular? Can you share the story with us?
No Aha moment, per se. Back in around 2007 or 2008, I was introduced to a man who had an opportunity as a minority to buy into the Burger King franchise system. He needed money to make that happen. It seemed like a great opportunity to make money and help him get a chance to take advantage of this opportunity, so I did just that. We ended up buying 19 or 20 franchises together on that deal.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
I didn’t start my career as a VC investor. I started it by being an entrepreneur, and I achieved respectable success doing that. Because I was successful and gained a lot of experience at a very young age, I knew I had something more to pass on to people besides money. I had successfully grown and sold a piece of our family business to a large Private Equity group by the time I was 28, taken the company public on NASDAQ by 31 and then sold the business outright by the age of 33. That was the kind of career most people (including myself) had only dreamed of achieving in a lifetime and I did it before I was 34 years old. When I started to invest personally in other people’s businesses, I honestly did not see huge financial success right away. But because I was helping them get their dreams off the ground, I felt good about being involved. When you are investing, sometimes you make money, sometimes you lose money. But when you are investing in making someone’s life and their opportunities better, you win every time, regardless of the financial outcome. So even if I have lost money, I keep learning and the people I’ve worked with learn something too. That, to me, is a more fulfilling route to success.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
There are a few people — chiefly among them: my two grandfathers and my father. I come from a line of men that couldn’t work for someone else and wanted to do things their own way. I am the same way. One of my grandfathers came to the United States in 1949 after escaping from the Nazis. He had $25 to his name, a wife and two young children to support. He was 36 when he arrived in Chicago to begin his new life. By the time he retired, he owned his own retail clothing and shoe store, and had given his two sons stores of their own to run. My other grandfather came out of World War 2 and became extremely entrepreneurial, buying pianos by the trainload from people in the South and selling them to rich people in the North and on the West Coast. He made his fortune doing that until all the pianos that were bought and sold in that way were gone and he had to reinvent himself. He owned hardware stores and became a commercial builder. Then at the age of 70 he started an art reselling business instead of retiring. He taught me to always evolve. And my own father made the huge leap of leaving a steady job with a new wife and me as a 1-year-old to support to go start his own thing. He made his business into a success and kept it going until I joined when I was 25. Together, we turned that business into a global technology manufacturing brand with 17 offices worldwide, traded on NASDAQ and eventually sold to a company today that is worth almost $15 Billion. They all served as great examples to me, and my father gave me the opportunity to learn with hands-on experience and prove what I could do.
You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
First, failure is a state of mind, it is not a place. You can’t fail monumentally, simply because something you tried didn’t work out in a specific way at a specific time. One of my favorite quotes is supposedly from a Hindu prophet and it says, “In the end, everything will be fine, so if it’s not fine, it’s not the end.” If you are asking me, having a steady job feels safe and reliable, but there is very little self-determination. If someone else you work for changes their mind about you, your career could be over. And when it comes to finding the greatest amount of success, failure can only happen when you decide not to take a chance and settle for safety instead of greatness. I have been involved in many things that might be considered by others as failures. But just like anything in life, you get knocked down, you dust yourself off, get back up again until you get where you want to go. So far, my wins are bigger than my losses, so people judge me as a success. But the truth is, nobody but you can stop you from becoming what you want to be. Figure out what you are passionate about or find a way to solve other people’s problems and someone will pay you for it. Waiting around for someone else to tell you when you can succeed sounds like a brutal life to me. I’d rather not be able to take a vacation for two years, either because I am too busy working on my own dreams or because I just can’t afford it than have a boss who tells me when I am allowed to take my two weeks of vacation. Failure only exists on the chances you didn’t take, it’s not a possible outcome of when you took a chance. Just be careful — when you go off and try to make it, do what you can to ensure your success by aligning yourself with people who are better than you at what you are trying to accomplish. Find someone who is better with money than you. Find someone who is more personable than you are. Find a person who gives you an edge that you don’t have yourself. And either ask them for mentorship or make them your partner somehow. The reality is we all have shortcomings. Success comes when you fill the gaps of your own shortcomings and become a force that nobody can counter.
Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?
Well, that’s a complex issue, so I will try to hit a few of the big things that can be done. Not sure this will be brief, but it all needs to be said.
The single most important thing is to recognize that we are all part of the problem and the solution. People tend to simplify things, like there is an “us” and there is a “them.” The reality is: people do what they are allowed to do. If they are allowed to ignore a problem that they would otherwise have to work to solve, 9 out of 10 people will ignore the problem, especially if it doesn’t directly and immediately do something positive for themselves. That’s not evil, it’s just human nature. So, if our government is not doing right by us and not addressing what we deem important, then it is our duty to get involved and hold them accountable. The beauty of America is you are supposed to be allowed to assemble and disagree with your government. That’s not always perfect either, but that’s the theory. Everybody is talking right now about voting and its importance. I am going to go out there and say something that may be considered somewhat controversial. Voting is about the bare minimum a member of society can do to make an impact. It’s a couple hours or even one day every few years, and its outcome literally determines the course of everyone’s life. If you have 50 pounds to lose and someone tells you to go and work out, going out once every 4 years to vote for a Presidential election is like saying I went to then gym once in the last 4 years to lose weight. It’s just not a very high bar to set for yourself. The most important thing we can do is be informed. Democracy and capitalism allow every person to make a difference in their society, but you need to be informed. Do you even know if your government does anything to encourage or incentivize VC firms or investors to make investments in those groups? If they don’t, and it matters to you if those groups get opportunities, then work on that. Call your representatives. If they won’t pay attention to you and treat you like you don’t matter, then organize a larger group of people who believe in what you believe and demand it as a collective. It’s easy to ignore one person, not so easy to ignore lots of people. I can tell you that the most effective thing our government can do to expand VC opportunities is to give VCs and investors major incentives to do it. Give big tax credits, or other things that encourage investors to focus on investing in those particular people. That way the VCs and investors will have more reason to seek out those types of investments. But then get out of the way because the free market will determine the outcome.
Second, and I know this may also be controversial to say, but in my opinion it’s not fair to allocate blame for lack of opportunities on society. We are all part of the society we live in. There may be “oppressors”, but there are also “the oppressed”. In every situation we are each making a choice. A person doesn’t have power over you unless you give it to them. Either fight/work hard for what you believe in and demand the opportunity you think you deserve or remove yourself from the situation and find a place where you are appreciated and get opportunities. If you aren’t willing to do either one, then stop complaining. There is racism out there, still today. There is hatred and bias in many forms, whether its gender, race, sexual preference, religion or whatever. It would be great if people came to recognize those tendencies in themselves and changed it for the better without anyone telling them to do it. But that just isn’t the reality of human nature. In my opinion, nobody owes you anything in this world. It would be great if they at least gave you equal respect as a human being, whether Black, Female, Jew or Hispanic. But if they won’t give it on their own, force them to take you seriously with the (non-violent) power you have available to you. No one can force you to spend your money a certain way. So hit people where it hurts them. You don’t like a policy or the stance a business takes, get informed, spread the word and stop rewarding them in spite of their policy. My hope is to inspire others and uplift people who are giving business a try and putting themselves out there. Like we said before, don’t be afraid to fail. Be bold, take action and investors will come. Which leads me to the third thing.
If you are a woman, or Black or Hispanic or a member of any other minority group for whom the American Dream is just out of reach, find something to do and then do it. VCs and investors don’t invent solutions to problems or businesses. They provide the capital to do it. But if you don’t go out there and try to make your mark, there isn’t a brigade of people who go door-to-door asking if you have a dream they can provide the financial support for. You have to take the first step. When you do, and you are good, people will find you. Have faith.
And last, I call on the investment world to work a little harder to not just make money, but also try to do some good with their investments. A rising tide raises all ships. If we lift other people up, there will be more and more opportunity for everyone. If the Black community makes more money, or women for that matter, do we really think it won’t benefit society as a whole? When people are doing well, the market has liquidity. Liquidity means people are spending the money they have on recreation, education, investment. That liquidity means others will do well too. No one benefits when one person saves all their money under the mattress and doesn’t put it out into the market. Go help uplift a community in need. Find someone who needs more than money and put in the work. Build a team that can provide mentorship or guidance or whatever assistance you can provide. Don’t just sit back and write a check and wait for your profits. Make it part of your model to uplift the businesses you give money to. Prop each other up, collaborate, don’t just compete.
You are a VC who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?
I started about 12 years ago helping provide capital to a partner who was a minority businessman to help achieve his dream. I then retired for a decade so I could raise my kids and give them the proper foundation for being the best they could be, and two years ago I decided to invest in and finance Happy Ice, a frozen dessert company that is about to take the world by storm. Happy Ice’s founder is a young Black man from the inner city of Philadelphia. His name is Lemeir Mitchell. When he was 11 or so, his father went to jail for life, so he didn’t get the upbringing or example he needed to become a strong businessman. I am not only providing capital, I am providing partnership and mentorship. I am working right now with an awesome minority businessman who wants to take the restaurant industry by storm providing eco-friendly solutions to all restaurants and venues, like cups and straws and spoons that normally destroy the environment. And I am looking into new opportunities all the time where I can be involved and focus on quality, not just quantity. For me, life isn’t just about money. It’s about connection. It’s about energy, the energy we all get the chance to bring to the party for our brief time on Earth. Are you bringing good positive energy with a focus, or not?
In general, which business sectors excite you most and which sectors do you look to invest in?
I’m excited about progress, and I love ingenuity. I don’t care what it is, if it’s exciting and making a difference and disrupting the market, I’m excited. My voice goes up in volume a lot. It’s not difficult for me to get passionate about just about anything.
Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?
I think I am actually in the middle of it with Happy Ice. I love the product. I love my partner. We sell a product that is sweet, brings people together and gives them a smile for a bit. If you can’t love that, I don’t know what you can love. It’s going amazing so far. I am proud of the progress the business is making and of my partner for the progress he is making. I don’t know for sure what its lesson is yet, but I know so far that it’s shown me that there are great opportunities out there, even in these crazy and sometimes trying times. Put on the glasses that help you see opportunity instead of difficulty, and you’ll see those opportunities are out there.
Can you share a story of an Angel or VC funding failure of yours? What was its lesson?
I think what you mean is one that lost money. I’ve got a few of those, and they failed financially for different reasons. But I hesitate to call something that I gained incredibly valuable knowledge from a failure. That’s like saying the tuition from college was a waste because I could have read books for a lot less money. I learned invaluable lessons from everything I have ever done. So I guess the most important lesson is always look at situations like you can’t lose, and then you usually can’t. But follow your gut, because my instincts on the failures were right, I just ignored them and got involved anyway.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
As a VC, no. I have regretted a few ideas that I didn’t pursue myself, like a ride sharing app/service that turned regular people into drivers in their community while they weren’t busy for extra money. I didn’t work out the details in my head properly and couldn’t see all the angles clearly. The people who went out and founded those ridesharing companies were obviously smarter than me because they did it. It’s not a regret though, just part of my own journey. There are a few businesses I regret getting involved in though, mostly because my gut told me not to get involved from the beginning.
Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why? Please share a story or example for each.
That’s easy, My 5 P’s
- People involved — what’s the Founder/person’s motivation? Are they smart? Are the humble? Are they appreciative?
- Product and differentiation — why is their product something needed or interesting?
- Plan — how they going to achieve success? Not just product, but how it gets into people’s hands/life, have they thought about the people and money it’ll take to get there?
- Persistence — how bad does the founder want it?. Entrepreneurship is one of the loneliest places you can be, so is your founder/team strong enough to make it?
- Payoff — how is my money going to grow, and what good will the investment do for them or the world?
If you are missing any one of these, the ship sinks.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-).
I’m not sure about the enormous influence part, but I do have thoughts. I’d like to restructure America and the way we govern ourselves. I’d start with schooling/early education. We do a terrible job of teaching basic financial knowledge, and that is literally the single most important topic governing everyone’s life. We also do not teach human interaction, connection, energy. Some people get it from religious upbringing or their parents, but it’s not a general population minimum standard. Very few people become self-aware in their entire lifetime. If we put the ideas of concern for others, being a considerate person, adversity management and staying positive when things aren’t perfect into people’s heads early, maybe we’d get a more caring and just society…eventually. The whole world would be a better place if those skills were mastered from a young age. Those principles and actions should be taught alongside the basics of reading, writing and basic math. And then we should have some exposure years, so kids can see what they have an affinity and interest for, so they develop a love for learning and becoming better. Lots of kids hate school and learning because they are challenged by things too early. And then they get discouraged. We need to build everyone up from the beginning, then challenge them later. When you become more mature, then you can go back and learn about things you wished you did. And if someone is gifted, they’ll stand out and you can put them in the pressure cooker earlier. In my own life, I hated history as a kid, but now I love learning about it. But when people don’t learn how to be a decent human that can function within a community, history or chemistry class ain’t gonna do much to help them.
If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?
If you can’t think of any better reason, do it selfishly. When the world is better around you, your life gets better. Now that we’ve been through lockdowns and coronavirus, does anyone have any doubts about that? And who wants to leave a legacy where you made things worse? That’s the only alternative to making them better, so that it feels self-evident.
We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this. :-).
Wow, that’s a really good question. Out of those leaders who are alive today, I would say Bill Gates is one I would love to meet. He seems genuinely motivated to make the world a better place, and he has put a lot of time into that project already. I think he could make me a better person with just his influence and perspective (not to mention, access to his Rolodex).
How can our readers further follow your work online?
I have been a pretty private person so far in life, but I started an Instagram account a year and a half ago or so. It’s @tedfoxman