Tim Guleri, Managing Director at Sierra Ventures, discusses at length his firm’s investment thesis, unique relationships with CIOs, and some of the industry trends he sees.
Sramana Mitra: Can you explain the competitive landscape? Gero Decker: We offer a business transformation suite. In its entirety, it’s a new category. If you break it down into individual components, then you have small product categories. The component that has the largest footprint is called Process Manager and Collaboration Hub. The main competitors are
Sramana Mitra: I’m asking a question where the entrepreneurs, by definition of the type of opportunity, would not be raising money from the big funds. In this case, the opportunity is not to act as a seeder. The opportunity is to fund some entrepreneurs and then exit straight away. Jonathan Lewy: I guess that depends
Sramana Mitra: How did the business grow as you brought that North American sales channel together? How did North America contribute to your revenue? Gero Decker: By now, they’re at roughly 25%. The lion’s share is still from Europe. We also have operations in Asia Pacific. It’s roughly 25% North America and 10% Asia Pacific.
Sramana Mitra: You said you argue with a lot of your industry colleagues on this topic. You have to manage how much capital is required to ride that curve. You have to do it somewhat capital efficiently. You can’t raise $100 million and have a $100 million exit. That is not going to give you
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Sramana Mitra: How do you parse unicorn mania? As a pre-seed investor, you could get buried under later-stage liquidation preferences. Even with your special investment vehicle, you could get buried under later-stage liquidation preferences. How do you protect yourself? Jonathan Lewy: We know the risk. We believe in the relationship we’ve built with the founders.