Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Nnamdi Okike was recorded in June 2019.
Nnamdi Okike is Co-Founder and Managing Partner at 645 Ventures. We have an excellent conversation about trends and his firm’s investment thesis.
Sramana Mitra: Tell us about 645 Ventures and your journey a little bit so we get to know you.
Nnamdi Okike: We are a seed to Series A venture fund. We are headquartered in New York. We invest primarily in enterprise SaaS and enterprise infrastructure software. We’re investing in companies that are typically just getting off the ground but have early and predictable performance metrics, focusing on very large markets, with great founders, and some kind of competitive differentiation early on in the product.
We started our fund six years ago in 2014. The fund began as a result of experiences that myself and my Co-Founder Aaron Holiday had. I spent about nine years working for a fund called Insight Ventures. It’s one of the largest venture funds on the East Coast. They manage about $15 billion of capital.
I spent many years there investing. I had done close to 20 deals. I had nine exits – four IPO’s and five acquisitions. I had learned the venture business at Insight and had seen some really interesting businesses over that time.
I wanted to take a lot of my learning to an earlier stage and develop a fund that had a more systematic approach to investing. I came together with my partner Aaron who is a software developer and engineer by background. We started to build our fund almost six years ago now.
Sramana Mitra: How big is the fund?
Nnamdi Okike: We manage about $50 million. Our current fund is a $40 million. We raised that fund last fall. We have several large institutions like Princeton University and some great high net worth individuals investing in our fund as well. We have folks like Marc Andreessen and Howard Morgan and some great LPs who back us.
Sramana Mitra: Define seed stage for us the way you see it. As you know, the venture business has fragmented quite significantly. Early stage or seed stage is no longer one moniker so to speak.
People have their own definitions. There’s pre-seed. There’s seed. There’s post-seed, pre-Series A, small Series A. Where do you fit in that spectrum?
Nnamdi Okike: That’s a wonderful point. There’s really been a fragmentation. It has resulted from a lot of different factors. It’s everything from the proliferation of micro-VCs to the rise of crowdfunding and growth of super angels.
The way we define it is companies that are early predictable metrics. I can describe how we look at the world. Our belief is that today, there’s a lower amount of capital required to get in business. You don’t need to buy servers. You don’t need to have very expensive sales and marketing.
Especially companies that are doing downloadable software or software for SMB’s, they can get started with a small amount of money. They can raise $500,000 from an angel group and get in the game. We define those rounds as pre-seed. Typically, the get-in-business round.