Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this series. The following interview with Corey Schmid of Seven Peaks Ventures was recorded in February 2018.
Corey Schmid is General Partner at Seven Peak Ventures, a firm with a focus on the Pacific Northwest.
Sramana Mitra: Tell us a little bit about yourself and Seven Peaks. Let’s get to know the fund. What size is the fund? What’s your investment thesis?
Corey Schmid: I’m a General Partner with Seven Peaks Ventures. We are located in Oregon. We are an early stage venture capital fund that invests primarily across the west but with extra emphasis on the Pacific Northwest where we’ve identified that there’s a capital gap for some of these fast-growing regional hubs like Portland, Denver, Salt Lake. Beyond angel and before larger funds, there is a capital gap that we believe we can fill.
Sramana Mitra: What is the size of the fund?
Corey Schmid: We started our fund in 2013. My founding partner Dino Vendetti moved up to Bend. We all have the opportunity to live in Oregon and work and travel across the West but moved outside of the Bay Area, had been a part of two funds out there, and identified this opportunity to look outside of the Bay Area and start to fund a regional market. That was in 2013.
We have since invested in 20 companies out of that fund. It was a bit of our own incubation experiment. The good news is the fund is doing really well. We are in the middle of our fund two. We’ll be closing that out in June. We’ve actually made three investments out of our second fund and there soon will be a fourth investment.
The strategy is very similar on fund two – early stage. We are a sub-$50 million fund so we are a small institutional investor. We look at companies that we could invest in at the late seed stage to perhaps leading an A with a $500,000 up to $1.5 million check.
Sramana Mitra: Let’s talk a bit about how you define early stage. What is your preferred stage at which you like to encounter companies?
Corey Schmid: What we find that in regional markets is, there is a very healthy angel community here. A lot of companies can get seed funding, angel investing, friends and family and grow their way to a pretty valuable and interesting business model that has achieved product-market fit.
When we start to look at a deal, we really like a bit of a mature model. We’re not investing at the earliest stages of concept. We’re looking for viable businesses that have found product-market fit. Ideally, with a million to three million is great. We always identify companies that are earlier than that that have perhaps something unique in their tech. Maybe the founders have had success in the past and they’re going at it again.
We will invest earlier but we are looking for those that are at that stage where they’ve used their money wisely, have developed a product that has turned a customer to do the unnatural thing of buying from a startup out of a basement. That shows that they’re really meeting an unmet need. Geography is part of our decision-making.
We prefer B2B. We’re much more enterprise. We have a lot of deep tech and operational expertise on our team. Matt Abrams specializes in deep data analytics, machine learning, AI. Most recently, he came out of leading a worldwide data analytics team at Oracle. I mentioned Dino. He’s been deep in the venture space for decades. Our fourth investing General Partner is Tom Gonser. Tom founded DocuSign. He’s a seasoned entrepreneur who can work really closely with others in the security and identity space. Then my expertise is most relevant in the digital healthcare space.