In a recent episode of the Startup Project podcast, I spoke with David Blumberg, a seasoned investor with decades of experience funding early-stage tech companies. Blumberg, who began his investment journey in the 1990s and was an early investor in the Israeli ecosystem, shared his insights, successes, and lessons learned over the past three decades.

Blumberg’s path to venture capital was anything but typical. Initially drawn to government service, his experiences in Washington, D.C., coupled with the entrepreneurial spirit he discovered running a student business at Harvard, led him to the world of finance and technology.

Early investments and the rise of Israeli tech

Blumberg’s early investment experience at T. Rowe Price exposed him to the burgeoning tech scene. He recalls one of his first investments, Sitex, an Israeli company, at a time when Israel was still perceived as a socialist economy. Blumberg’s contrarian view that the perceived risks were already priced into the stocks led T. Rowe Price to begin investing in Israeli companies.

He also discusses his involvement in the Yozma program, a government initiative that incentivised venture capital investment in Israel. While acknowledging the program’s role in fostering collaboration between international and local investors, Blumberg emphasises that the key to Israel’s tech success was the government ultimately “getting out of the way” and allowing entrepreneurs to flourish.

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The importance of strong teams and repeat founders

Blumberg’s investment philosophy centres on the importance of strong teams, particularly at the pre-seed stage. He believes that a great team’s ability to adapt and pivot is crucial in the unpredictable world of startups. He cites examples of successful repeat founders like Oren Netzer (Double Verify, Data Heroes) and Dan Sanker (CaseStack, SupplyPike) whom he has backed multiple times, highlighting the value of long-term relationships and trust built through shared experiences.

Bloomberg Capital’s investment strategy: Data-intensive companies in leading democracies

Blumberg Capital focuses on pre-seed, seed, and Series A rounds, typically investing US$1-5 million initially, reserving half for follow-on investments. They also manage a growth fund focused on late Series A and early Series B rounds, with investments ranging from US$5-15 million.

The firm’s current investment thesis centres on data-intensive companies leveraging AI and machine learning algorithms within specific vertical domains. Their portfolio includes companies like Vair-AI (AI for mining), Imogene (cancer detection), Joshua (insurance policy writing), and Telen (automated receipt inspection).

Blumberg’s personal investments and mentors

Beyond his work with Bloomberg Capital, Blumberg invests personally in diverse areas, including real estate and, unconventionally, oil and gas. He describes himself as an “energy humanitarian,” emphasising the need for reliable energy sources to address global energy poverty.

He acknowledges the influence of mentors like Fred Adler, Abby Joseph Cohen, Alan Patricoff, Charles Bronfman, and, notably, the entrepreneurs he’s worked with over the years.

Key takeaways for aspiring investors

Blumberg’s advice to young investors is simple yet crucial: “Get everything signed up front.”  Ensure clear contracts and agreements to avoid future disputes and protect your hard work.

The episode offers a wealth of insights from a seasoned investor, spanning his journey into venture capital, the evolution of the tech landscape, and the enduring principles of successful investing.

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