Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Jake Seid of Stone Bridge Ventures was recorded in November 2017.
Jake Seid, Managing Director, Stone Bridge Ventures, talks about trends, AngelList Syndicates, ICOs and more.
Sramana Mitra: Tell us about Stone Bridge Ventures. What is the focus of the firm? How big is the fund? What size investments do you like to make?
Jake Seid: This is a vehicle that I formed after my time as President of Ten-X. When I moved to the advisory board, I saw a tremendous amount of innovation happening in the Valley. The Valley goes in waves. Right now, we’re seeing multiple waves that are really re-platforming the enterprise, changing financial services, and changing many markets that are typically unregulated sectors that are now leveraging technology for the first time.
We want to tap the power of cloud and SaaS to bring software to verticals that’s traditionally not bought software but are very large and yet untapped by large incumbents. My focus is on those areas – around B2B and focusing on checks from a few hundred thousands to a few millions.
Sramana Mitra: How big is the fund?
Jake Seid: There’s a very small fund that I use for pre-seed and that’s really for $50,000 to $150,000 checks over the next 12 months. That’s just $1.5 million. Then what I do is I raise syndicates on a deal by deal basis leveraging AngelList. What I’ve done is bring together not just the experience that I have in building companies and working with companies but also bring in other value-add investors to help accelerate companies.
These are executives across the Valley that are relevant to those particular opportunities. The power of doing it on a deal by deal basis while there is no established fund allows me to form very customized syndicates depending on the focus of the company.
Sramana Mitra: Do you do AngelList syndicates for pre-seed?
Jake Seid: I do. It’s basically through the fund. For Series A, it’s typically through a combination of the fund and these customized syndicates. My focus is on leading the syndicate. I typically don’t invest in other syndicates.
Sramana Mitra: You said you focused on B2B. Is it necessarily B2B SaaS then?
Jake Seid: There’s a couple of important theme areas. One is SaaS. The other is marketplace models. That was what we built at Ten-X – the largest online marketplace for real estate transactions focused on B2B investors. We were selling many billions per year online from a B2B perspective.
Sramana Mitra: B2B marketplaces and B2B SaaS is what your specialty is.
Jake Seid: Exactly.
Sramana Mitra: What trends do you see in your deal flow? You started off by highlighting some of the changing landscapes in different segments of the technology industry. Within the spectrum that you defined as your core interest area, what are you seeing in the deal flow that is worth highlighting?
Jake Seid: I think there are a number of super interesting trends. First and foremost, artificial intelligence. The reason I think that’s so interesting is I really view it as a new architecture. When new architectures emerge, there is an opportunity to rethink each of the areas that have built big technology companies in the past and say, “What would that look like if you built a base of AI from the ground up?”
Whether it’s CRM, IT service management, security, HR, there are big companies in each of those areas in on-premise software, then in client-server, then cloud software. AI-based architecture creates that next generation opportunity. The other thing that’s obviously happening is the technology stack for most enterprises is no longer in their four walls. It’s a combination of their technology stack on-premise and their desire to leverage the public cloud.
What that means is how you have services, applications, and data that are spread. From the end user’s perspective, they want it spread seamlessly between their internal infrastructure and public clouds. There are a variety of public clouds that are out there. There’s not just one public cloud. It’s a multi-cloud world. Rethinking each of the infrastructure applications to make sense for how you think about storage, networking, security, and application performance management.
Each area that has created a big business in the past now has to be rearchitected for this world of multi-hybrid clouds. I think that’s very exciting. There are a couple of exciting things that I’m focused on. Of course, there are others like FinTech and real estate tech that are being transformed pretty dramatically.