Interlock Capital: Angel Group Blooms into San Diego Venture Capital Firm
Interlock Capital provides an inside scoop on building a VC firm in San Diego
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It was around eleven o’clock on a Friday, when billionaire investor David Friedberg came on stage to address hundreds of San Diego-based entrepreneurs in a fireside chat conversation in a swanky hotel resort in Encinitas.
The invite-only gathering held earlier this year, resembled well-known technology summits similar to those held in San Francisco and Los Angeles markets. Where top deal-makers gather to discuss the biggest opportunities in technology, venture capital among other top-of-mind topics.
The summit was the brainchild of a relatively “new” venture capital firm called Interlock Capital led by managing partners Neal Bloom and Al Bsharah. The goal was to unite ultra-successful entrepreneurs and off-the-radar investors entrenched in the San Diego startup ecosystem in a single conference room.
“The goal of the summit was to bring leaders of the tech community, to convene at the highest quality place and have quality conversations — we achieved that.” said Bloom, sharing his personal goal to have every tech CEO in San Diego as an LP in its fund.
In the final weeks of November, I chatted with Neal and Al for about a 30-minute interview. We discussed a few things — Interlock’s founding story, what outsiders think about San Diego early on, and what to expect from them next year.
High-Level Overview
Founded in 2020, Interlock Capital is a venture capital firm that backs early-stage startups in industries such as technology, science, and consumer.
The firm holds a “not your typical startup fund,” mantra and has a network of 1,200 experts which includes angel investors, subject matter experts, service providers, startup operators, many who reside in San Diego.
Earlier this year, Interlock Capital hosted an augural Interlock Summit bringing together key leaders and investors in the San Diego startup ecosystem. Notable companies in its portfolio include Acquire.com, Impossible Foods, Mercato, among others.
Founding Story
Neal Bloom and Al Bsharah have come a long way from its startup days building fast-growing technology companies a dozen years ago.
Prior to founding Interlock, Bloom helped co-found Portfolium, which was acquired by Instructure for $43 million in 2019 and Bsharah founded Email Copilot, which was acquired by technology software company Seismic in 2016.
After crossing paths supporting organizations like NuFund Venture Group, formerly known as Tech Coast Angels, they decided to join forces and launch their own angel investing group and pooled $1.3 million to start investing in various startups.
“We want to be San Diego’s venture capital firm. We were both founders of tech companies and had benefited a lot from San Diego’s startup community,” said Bloom. “After watching the startup community grow up, we decided we want to play a bigger role in San Diego, specifically on the investing side of the table.”
Helping Investors and Founders
Convincing investors to take San Diego seriously is an easier conversation today than it was ten years ago, said Bloom and Bsharah.
They recalled big-name LA investors' biggest question — “When will more tech startups finally go public or become the region’s next Qualcomm?”
“It’s much different than it was eight years ago,” said Bloom, who began organizing invite-only venture capital dinners back in 2015.
Los Angeles-based investors would often ask what exactly is happening from a S.D. tech startup perspective? He said.
They would tell me, “I'm completely blind to San Diego — I know nothing about what's happening beyond our borders, aside from L.A.”
The Portfolio
Over the last sixteen months Neal and Al have yet to take the gas off the pedal, the “not your typical startup fund” has written more checks than the majority of tech-focused venture capital firms in the region.
The duo has bigger ambitions than simply backing tech and software companies.
“We invested in 16 companies over 16 months,” said Bloom. “As an angel group, we’re written checks ranging from $100,000 up to $1 million. As a result, that has attracted more people to pay attention to us, many who want to get involved on a bigger scale.”
For Neal and Al to succeed in the long run, however, they’ll need to get some early big wins that generate results, which includes convincing unicorn startups valued at $1 billion or more wanting to take their investment pre-IPO.
“We’re year one (and a few months) on this new fund,” Bsharah responded when asked about how it's fund’s performance so far.
“We're ten times as large as we were when we started. We have at least five companies that now have 3x or higher revenue since Interlock invested. We’re really focused on companies that are generating revenue and growing quickly.”
Raising a Fund in San Diego
Interlock has made 30 investments and has deployed nearly $6 million in capital.
As Interlock Capital works to become more established, it is learning to embrace its founders helping founders narrative.
Interlock expects to close its venture capital fund by the end of this year. It also wants to continue to find ways for the firm to intertwine its financial success with people they admire and respect.
“The big draw for most LPs is that we're de-risking the investments we're making because of who we surround ourselves with,” said Bsharah. “We are able to empathize with these companies like nobody else. Our story founders helping founders has been the biggest draw so far.”
We're fortunate to have such talent right here in San Diego. These guys are blue-chip all the way.
loved reading about the origins and purpose of Interlock!