Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Gary Little of Canvas Ventures was recorded in March 2018.
Gary Little, Co-founder at Canvas Ventures, discusses the various types of venture capital and the evolution of the industry into a rather segmented current eco-system. For an entrepreneur trying to raise money, all this is extremely complicated, but essential to understand, or else, you will find yourself trying to fit a round peg into a square hole.
Sramana Mitra: I think what would be great for our audience is to hear about a bit of your backstory before Canvas Ventures. Then we’ll double-click down on Canvas Ventures and what you are trying to do differently. You have been in this business for a long time. What have you done? What have you seen? How has the industry changed in the long time that you’ve been playing?
Gary Little: I’ve had the opportunity to be in the industry for 30 years now. I’ve had a chance to see a lot of ups and downs. That’s part of the drama and fun of the venture industry. It’s cyclical. I started as an electrical engineer. I was also in sales and marketing at IBM. Then I went back to business school. That’s where I first heard about venture capital.
I started researching and ended up joining the Rockefeller family fund straight out of business school. I did that for about two and a half years based in New York City. IBM and MBA really did not prepare me to be a venture capitalist. At that time, entrepreneurs were probably in their early 40’s when they’re starting businesses. I didn’t have much to offer to them. I had the itch to be on the operating side.
For the next 10 years, I was working in various positions with Sun Microsystems, which was, at that time, still a young company. I ended up running product marketing. Then, I went to Apple and had a variety of roles there including international marketing, channel sales, and ultimately, running their PowerMac division. It was at that point where I said, “This is a good time to see if I can take the skills I’ve learned and go find a startup to run.”
I wanted to meet up with some tech entrepreneurs and see if I could help them build and scale the company. That was 20 years ago. That’s when I ended up meeting a bunch of venture guys again. I got pulled over to the venture side instead of running a company. The difference was that after 10 years of working at Sun and Apple, I really felt like I did have something to offer to the entrepreneurs in terms of connections and ideas.
Sramana Mitra: That was Morganthaler, right?
Gary Little: Yes, I joined Morganthaler about 20 years ago. Morganthaler was one of the earliest venture firms. In fact, it’s celebrating its 50th year in business this year. Morganthaler did not only IT but also life sciences. We raised an $850 million fund 18 months after $600 million fund. It’s a large enterprise.
What we decided to do was really have the information technology team form Canvas Ventures, members of the life sciences team created Lights One, and members of private equity team created Morganthaler Private Equity. Our inaugural fund at Canvas was in October of 2013. It was $175 million. We were successful in raising our second fund of $300 million. We’re just under half a billion dollars under management right now.
We focus in on Series A and Series B investments. Our investments range from $5 million to $10 million. Total investment raised is from $10 million to $20 million over the life of a company. We focus almost exclusively on software and business made out of software, which is everything from mobile, internet-based, and SaaS companies.