Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Steve Beck was recorded in May 2018.
Steve Beck, Managing Partner at Serra Ventures, discusses his firm’s non-Unicorn investment thesis. Refreshing to hear.
Sramana Mitra: Let us introduce you to the audience. Tell us about the fund. How big is it? What kind of investments do you like to make? What is the focus?
Steve Beck: Serra Ventures is technically a micro-VC fund, which means we generally place between $500,000 and $750,000 into seed stage investment. We’re about $50 million. We’re on fund three. The fund has been going for seven years. We have very specific geographical focus and thesis for investing.
I’ve been doing venture capital since 2000. I’ve been with Serra for seven years. Serra is based in Champagne, Illinois where the University of Illinois is. We also have an office in Chicago. I’m based on the West Coast. We have an interesting geographical spread which we call the distributed Midwest and the underserved West Coast.
Sramana Mitra: How about a bit of your background? You said you’ve been doing venture capital for a long time. Is it all based out of the Midwest?
Steve Beck: No. I was an entrepreneur myself. I never went to business school. I actually just started companies. I started my first company when I was 23. We exited that company to a publicly-traded company called Footlocker.
Subsequent to that, I started a company up in Silicon Valley in 1998 with some partners. I exited that to another publicly-traded company. After I got a little bit of funding money in my pocket, I and another guy started a venture firm. We learned that business. My focus has always been the West Coast. My partners specialize in, what we call, distributed Midwest.
Sramana Mitra: Talk a little bit about what you like to invest in. What sectors? What style of companies?
Steve Beck: My thesis has changed. One of my early venture investment was a company in China called Baidu. Me and my partners put $1.6 million into the $3 million pre on a company that now has grown to a market cap of $90 billion and is probably the largest tech company in China. I had that unicorn ride, but my passion and my focus is completely different.
I like companies where we get in quite early and we like to shoot for an exit within four to five years at about a $50 million to $60 million exit. We like to get into companies that have deep intellectual property and where entrepreneurs are not trying to become unicorns. They’re not swinging for the fences. It’s your interest as well. You’re trying to build something of value and exit early. This really works well for our limited partners. It works great for entrepreneurs.