Investment Thesis: Alex Osadzinski

Monday, September 25, 2006 | 5 comments

I interviewed Alex Osadzinski over the weekend, as a follow-up to the recurring theme in conversations with entrepreneurs: “VCs are only interested in coming to the rescue of victory”.

SM: Please describe your background, to help entrepreneurs understand your point-of-view.
AO: My background is mostly on the operational and entrepreneurial side. I spent 22 years in operational roles, at 6 startups, one behemoth, and one turnaround. My roles were always a combination of VP Engineering, VP Marketing and VP Sales, or CEO/President. Of the startups, two were sold, three went public with multi-billion dollar outcomes, and one is a gently smoking crater. I’ve been at Trinity for just over five years, working across all of our practices, but with a personal focus on software and digital media.

SM: What stage are you looking to invest in over the next 6-12 months?
AO: I, and Trinity as a whole, generally invest in the first or second institutional round (and then follow the company through outcome). However, we’re also looking at a few seed deals, where we know the team and/or the space really well.

SM: What segment(s)?
AO: Trinity is a very collegial firm, so we jointly invest in a specified set of segments: digital media, internet services, mobility, security and SaaS.

SM: What market dynamics do you look for?
AO: That’s easy: a fast-growing market that can sustain a startup’s explosive growth.

SM: What size of investment are you looking to make?
AO: Our normal bite size is $5-10M, although it can be much less for a very early stage company.

SM: What kinds of deals are you interested in seeing? Describe, in some detail, the last deal you funded, and your rationale behind funding it.
AO: Trinity has a “shared” model, where we work in groups of 3-5 on a given investment, although, in the end, one partner takes responsibility for the investment and Board seat. Even then, on many investments, one or more of us will be involved in Board work and/or in providing practical help to the company. With that in mind, I led our investment in Modulus Video, a developer and producer of broadcast-quality video encoder for the IPTV, satellite, cable and broadcast markets. My rationale was that I knew the team (and, in fact, recruited the CEO, someone whom I knew well, to the team), and agreed with the team’s early vision that their particular approach would dominate the market. That turned out the be true, and the company is the leader in its space. I’ve also been closely involved with, for example, Fuego, and enterprise software company with a Business Process Management (BPM) product. There, I leveraged my experience in the space from a former company (Vitria) to, I hope, add value in strategy, marketing and product.

SM: Do you fund capital-intensive deals?
AO: Generally no, if by “capital intensive” you mean more than $15-50M to break-even.

SM: Do you fund built-to-flip deals?
AO: Hell no, that’s a bad idea because it generally doesn’t work, doesn’t feel right and, even if it does work, is dilutive to the fund’s overall multiple goal

SM: Do you fund “hits” businesses?
AO: Sometimes, but with care, and only betting on a stellar team.

SM: Describe your ideal entrepreneur.
AO: Smart, focused, a leader, capital-efficient, wants to work with me and I can add value to him/her. Knows his/her limitations and is courageous enough to adjust his/her role accordingly as the company grows. Communicates. Collaborates. Drives him/herself harder than anyone else ever would.

SM: Which VCs do you like to work with as part of a syndicate?
AO: We syndicate with multiple local and remote firms, depending on the circumstances. We’ve tried hard to be a good syndicate partner to all, with the consequence that many firms will, and have, partnered with us.

SM: What is your thesis on entrepreneurial / investment opportunities given the state of the market? What markets are likely to crash? What markets are likely to open up?
AO: Well, if I knew, I wouldn’t tell you! Like most VCs, I get paid to spot trends in advance of them becoming over-invested. More importantly, I think that it’s possible to shape markets and trends by partnering with the right entrepreneur. There’s a lot of self-selection here, too: great entrepreneurs don’t come in to show you the 25th company that you’ve seen in a month in a given space. They pitch companies that are different in some important respect from the competition. I hope that I can bring to bear my market knowledge to help them shape the plan.

(SM:I have worked with Trinity for close to 10 years, and I like their culture. It’s a lot less arrogant than many other top firms. They are, however, a conservative investor, focused on fundamentals, sometimes slower than others, but overall a solid firm that currently has a lot of momentum. Several partners are looking for new deals, and Alex is a thoughtful investor with a LOT of operating experience, a decent, polite, highly responsive, enjoyable person to work with in a market full of rude, flaky, arrogant people whose asses you will be kissing.)

He added the following concluding thoughts:

I’m new to venture, and have two unshakable tenets that I apply to my job:

This is a SERVICE business. I’m here to provide a SERVICE to my portfolio companies. All VCs’ checks cash, i.e. the money is always there. I had better provide more value, more engagement and more insights than the next VC, or I won’t get the good deals. Anyone can fund a bad deal, but only the best get to fund the good deals.

VC stands for VENTURE capital. There has to be risk for reward. “Rescuing victory”, as you so aptly put it, isn’t interesting, or rewarding IMHO.

This segment is part 1 in a 16 part series George Zachary →
Jump to part: Alex Osadzinski, George Zachary, Sumir Chadha, Alessandro Biral, Peter Redford, 1, 2, 1, 2, 3, 4, Warren Packard, 1, 2, Paul Asel (IFC), Thesis?

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