Sramana Mitra: What you said about diversity is music to our ears because that’s our community. We’re very happy to see that that’s what you are doing and that people are paying attention to this issue a lot more right now. That’s progress for sure. Let me ask you a little bit more about the stage.
In the late 90’s, I did three startups in a row. At that time, it was seed and Series A. Now, it’s friends and family, pre-seed, seed, post-seed, pre-Series A, small Series A, and traditional Series A. The spectrum has segmented. Where do you see yourself in that continuum?
Miriam Rivera: We end up everywhere, even up to a traditional Series A. You’re right. The funny thing is a lot of people consider themselves early-stage investors. By the time somebody gets a Series A, there often have been three rounds of financing in the company. It typically depends on the company that we see and the opportunities that are in front of us. A lot of people are raising capital at each of those stages. Sometimes we’ll make a smaller investment, but our typical investment amount is $500,000.
We’ve made investments as low as $100,000. Here, the seed category has increased in size over the tenure that I have been investing. They’ve moved from seed round being about $500,000 total to now being up to $3 million to $4 million. It really depends on the nature of the business and frankly, on the availability of the capital. There has been so much capital moving into the sector that rounds have just gotten larger. Some of them are priced extremely high and our quantitative process helps us avoid overpaying.
Sramana Mitra: What do you like to seed? Would you invest in concept-stage ventures?
Miriam Rivera: It’s a pretty rare thing. We’ve probably made a little over a hundred investments. The typical company usually has some sort of a proof of concept. They may have some pilot customers. We tend to focus on enterprise applications and not consumer. The majority of them are either in sort of a pilot discussion or may even have a term sheet with a customer that’s waiting for a product, as opposed to a pure proof of concept.
SoFi was one of our companies where we made an investment on the basis of a deck. That was, in part, because my partner had known one of the principals in his prior work at Wells Fargo. He knew that he was really one of the smartest people in banking. Therefore, there was a heightened level of comfort with that particular concept. I think they were also a more mature company. They had the appeal to draw in very senior people from within those kinds of sectors to help grow their business.
Sramana Mitra: What about geography? Do you invest only in Silicon Valley?
Miriam Rivera: Probably 95% of our investing is in Silicon Valley. We have some investments in other parts of the United States and some in other places in the world. I would say that our most successful investing has been in the Silicon Valley area. It’s interesting but if you look at venture capital as a whole, most of the investments made by venture capitalists happen to be within a hundred miles of the home office.
I’m on the Board of the Kauffman Foundation in Kansas City which studies entrepreneurship and has published a lot of information about entrepreneurship. They’re trying to change that even here in the United States where only 4% of venture capital dollars are expended in the center of the country and almost all of it is expended on the coast.