TIANXIANG ZHUO

Karlin Ventures

Brentwood

About half of Karlin Ventures’ portfolio companies are found through incubators. That’s how Tianxiang Zhuo, Karlin’s managing partner, first met Jason Crilly and Holden Steinberg, the husband-and-wife founders of Santa Monica mobile advertising company NearWoo. They were introduced in late 2012 by former video game executive Howard Marks at his Los Angeles incubator, StartEngine. Zhuo immediately saw an opportunity in the market niche Crilly and Steinberg were targeting.

NearWoo shows targeted banner ads from nearby businesses on the smartphones of potential customers who are browsing the Internet or using mobile apps while they are in the neighborhood.

“We liked how NearWoo was trying to solve a relevant problem in a large and fast-growing market,” Zhuo said in an email interview with the Business Journal.

After they met, Zhuo spent a lot of time with Steinberg and Crilly, to get to know how they managed the company.

“What really stood out was how they were operational founders who could go and build a great product themselves,” he said. “And also how they were very meticulous at driving the product to near perfection.”

Zhuo also spoke to several of NearWoo’s early customers, who gave the business glowing reviews. He was also particularly impressed by how user-friendly the product was, in contrast with the complicated technology the founders had built to power it.

Zhuo then put Crilly and Steinberg’s strategic plan for the business under extra scrutiny. It passed all of his tests.

“I spent a lot of time understanding the vision they had,” he said, “to make sure to make sure it was well-aligned and to get comfortable with their working relationship.”

Once that happened, Zhuo decided to contribute to NearWoo’s $1.2 million seed round, which the company raised last August. Most of Karlin’s money comes from Gary Michelson (No. 28 on the Business Journal’s list of Wealthiest Angelenos).

Since then, Zhuo has been working with Crilly and Steinberg to scale the business, focusing on tightening up the sales process and building out the right team. Zhuo also envisions helping NearWoo form relationships with more companies that compile data on consumer behavior to improve the effectiveness of its customers’ advertising campaigns.

As NearWoo only makes money when its retail customers are happy, Zhuo said he wouldn’t have put Karlin’s money in the firm if he had gotten poor references. However, once feedback from NearWoo’s customers backed up his sentiments about the technology, he had the confidence he needed.

“I was convinced that the value proposition was clear and consistent,” he said.

– Justin Yang and Matt Pressberg