Q&A: Matt Hayden, Founder of Sea Purity Investments, a Family Office
This Q&A is with Matt Hayden, the founder and owner of Sea Purity Investments.
Sea Purity is a family office in San Clemente with a multi-strategy approach. It’s an LP in 12 different funds and has completed over 100 direct investments in startups, as well as growth-oriented private and public companies. It primarily looks for broad- based tech, consumer, life sciences and cleantech.
The funds are typically around $500,000-plus, while direct investments range from $50,000 to $500,000.
Hayden declined to disclose the current value of Sea Purity’s portfolio.
OCSN: How did you come to be an entrepreneur?
Hayden: I grew up in Annapolis and went to school at University of South Carolina.
I started working at 12 and put myself through college.
Entrepreneurship is in my blood. It was also a necessity in order to be able buy a car, put myself through college and covering living expenses. My father worked at the postal service and my mom was stay at home taking care of five kids. My grandmother was a maverick investor and got me interested in the stock market. So, it’s in my DNA.
Straight out of college I started as a stockbroker. Loved the public markets, but quickly realized that was not what I warned to do.
I met a guy in the investor relations business. He was based on the West coast and wanted an East coast office so I said, “If you want to pay me to learn, I’m game.”
I quickly realized that my philosophy wasn’t completely aligned with those guys.
I told them that I appreciated the opportunity, but left and started my own company in 1996, Hayden IR, which I sold that in 2006.
OCSN: What originally brought you to OC?
Hayden: When I first moved to California, I lived in North San Diego and used to do business here in OC. I got married 10 years ago. We decided on San Clemente as a meet-in-the-middle place to live and raise our family.
OCSN: When did you create Sea Purity Investments?
Hayden: Sea Purity is a more formal Family Office structure. I have been investing since 1990 but made this a full time role in 2012 when I sold my second investor relations firm, MZ Group.
(Hayden is the chairman of that company, MZ North America. It’s the American division of MZ Group, an independent investor relations and corporate communications firm.)
Approximately 30% of our portfolio is invested across socially- responsible companies. These are companies “doing good” where we anticipate significant returns on invested capital.
A great example is LivFul, which has developed a chemical-free, long-lasting (16 hour), extremely cheap insect repellent. This is a much bigger global play where parents don’t want to put chemicals on kids (or themselves), and more importantly where over 1 million people (majority kids) die from malaria each year. The initial results from the launch in Africa has been amazing, where malaria cases have been reduced by 70% with the people using it.
Separately, we contribute a portion of profits to multiple charities each year, including our church Pacific Coast. We also contribute to CouldYou?, which is partnering with LivFul to provide a host of key services/support for two countries in Africa, and the Crohn’s and Colitis Foundation, plus several others.
Now that I have a six-year old daughter and a two-year old son, I made a commitment to travel minimally, which has helped create a portfolio with a much higher concentration in SoCal than at any other time previously. It’s a great chapter of life and I am really enjoying it.
OCSN: What’s it like focusing solely on the family office?
Hayden: You’re trading one thing for something else. I’d say it’s just as busy. Probably even a little more stressful because you’re not the one running the ship, you’re betting on all these other (entrepreneurs) to run the ship.
With about 10 of the portfolio companies, we work to add value, but where it organically happens. With relationships, skill sets – the understanding that we can help the business by generating revenues, adding C-level execs or board members, introducing strategic investors, all in the name of creating the best company possible.
And, it’s not predicated on us making an investment. I love to help. I try to go beyond the call of duty. While our investments are passive, I always look to organically add value.
OCSN: How did you get the name Sea Purity?
Hayden: I think it’s a few different things. I love the ocean. I’ve been a surfer my whole life. I’m probably in the water five days a week.
The purity aspect is the most important. We want to be aligned with high-quality, high-caliber people. That’s of the utmost importance in every single thing we do and every relationship we have. Like to see the best in everyone and look for those with purity/integrity in their soul.
OCSN: What are some of your recent investments?
Hayden: Sea Purity is a limited partner within the Cove Fund II.
One of the partners told me about a startup the fund had passed on, where we might have an interest — Deep Lens.
(This is an an AI startup working to expedite the use of digital pathology to help match cancer patients to relevant clinical trials. It recently raised close to $14 million in a Series A round. It’s raised over $17 million in total.)
That one struck a chord, in regard to what they’re doing.
I’ve had a number of friends and family members affected, so cancer has really been on the front burner. In fact, my sister called me last week to say she was diagnosed with breast cancer. I think anything that can move the needle and help effectuate better outcomes, I’m interested in.
I thought their strategy had enough traction and enough time spent and dollars invested. If they could get the pathologists behind this and start to deliver results, it should really start to take off. It was in the high-risk bucket, but love what they’re doing.
I can see why Simon Arkell came on board. (Arkell is the co-founder and president).
OCSN: How much did you invest in Deep Lens?
It was one of our smallest investments. We just didn’t have a lot of extra capital in the high-risk bucket and, more importantly, we did not have much time for diligence, as the round was closing a week after we first met.
OCSN: What company that you’ve invested in has seen the greatest growth?
Hayden: The biggest winner to date locally is our seed round investment in Acorns. (We invested $50,000). Acorns recently raised money from Comcast Ventures and other major media players at an $850 million valuation.
OCSN: What other companies have you invested in?
Hayden: In OC we have about 12 investments, including four that are within five miles of my house in San Clemente.
This includes Blast, (founded by Walter Cruttenden, who also co-founded Acorns.) See related story on Blast here.
And, we invested $200,000 in the founders’ round of Dosh, with HQ in Austin. They just did a major up-round Series B at a $300 million valuation. (We did not participate in that.) That’s more than 25x what we paid only two years ago.
OCSN: What are your thoughts about the investment climate for the rest of 2019?
Hayden: I feel like – for the time since I’ve been involved, in the private company ecosystem since 2012 – I’d say that there are more high-quality, early-stage companies than I’ve ever seen at any other point.
OCSN: What are your thoughts on the current state of OC’s startup ecosystem?
Hayden: I feel like it’s in motion. You’ve got great talent, meaning senior execs who have had successful exits and are ready to do it again. You have an incredible infrastructure in OC that supports management teams and startups. Whether its OCTANe, Evo Nexus, Nex Cubed, the Cove funds or Tech Coast Angels, you’ve got a bunch of different platforms in place that really help and are an attraction.
Also a great quality of life. High-caliber employee base. Feels to me like it’s all clicking!
Several of our portfolio companies are in OC. We’ve helped them through advice on making key decisions in addition to key intros, whether it’s a new member to the management team, onboarding customers, board members, capital, etc. Things that will help them grow the business and succeed.
Wherever possible, we’re there to help, and I really try to dig down and understand key points for management, what area they’re most focused on. Then we go through our Rolodexes and see where we can move the needle.
I also host a Best Ideas dinner each quarter, which is for family offices, as well as institutional and accredited investors. While it’s casual, it’s also extremely productive. It involves networking, in addition to six company pitches, plus hearing about a nonprofit. Some amazing stories and the next one is being held June 18.