Posted on Friday, Mar 12th 2021
If you have been bootstrapping and think you are ready for investors, you need to learn how investors think. First, please study our free Bootstrapping course and page. Then start looking for entrepreneur – investor fit. Today I introduce you to Bruce Cleveland. Investor Introductions
Bruce Cleveland, Founding Partner at Wildcat Venture Partners, is one of the early employees at Oracle, as well as a co-founder of Siebel Systems. His book, The Traction Gap, shares the framework that his firm uses in its venture capital practice. You can listen to a podcast of our conversation
here and watch the roundtable video below: Sramana Mitra: For those of you who may have been around in the early 2000’s, one of the most successful ventures in the history of enterprise software was Siebel Systems. Bruce was an integral part of Siebel Systems. Bruce, tell us about what you are doing with Wildcat Venture Partners. Given your background, you must have brought something unique to the perspective of Wildcat Ventures. Tell us what are the specifics of this venture. Bruce Cleveland: Wildcat is a joining of two different groups – three people from a former firm and me from another firm. We elected a couple of years ago to build a brand new platform to do early stage software investing. I’ve known my partners for many years. One of the unique aspects of our particular firm is we all come from an operating background.
One of my partners built a company from scratch that was acquired by Oracle and generated about a billion dollars for his investors. I had the fortune of working in a number of interesting companies. I started in Silicon Valley at Oracle when it was still a small company with less than a hundred people. I was one of the first employees of a gentleman by the name of Tom Siebel. We all come from building companies.
We wanted to take those lessons that we learned to see if we could provide a set of operating principles and build a playbook to enable early stage seed or Series A companies. We’re a firm of four people. We’ve raised a transitionary fund. We’ve invested that across 23 companies.
We’re now in the middle of raising our second fund with the same principles – early-stage investing focused on software across B2B and B2C with the intent of using these operating principles to generate a better-than-average success rate. In this period of time, there’s almost a 90% failure rate. When we did some introspection of our investing track record, we’ve had about a 70% success rate. We’ve taken the principles and codified them into a framework.
Sramana Mitra: Let me ask you a few more questions about the fund so we know what kinds of entrepreneurs you would be interested in within our community. What sized investments do you make and what is the size of the fund? Bruce Cleveland: Our first fund was a transitionary fund. We raised about $60 million. We come from very large firms. Many of our prior investors could not be investors in Wildcat because we wanted to create a smaller fund. We will never raise a fund bigger than $250 million.
The data shows that it’s very hard to generate venture returns off of larger funds. That’s one of our policies. We’ll invest in seed rounds – $100,000 up to a million. A normal full-sized investment would be somewhere around $6 million to $8 million and maybe $4 million initially. All in if you added reserves, a full investment over the course of the history of a company might be $10 million.
Our conversation continues
here. This segment is a part in the series : Best of Bootstrapping . Bootstrapping to an Exit . Why is Bootstrapping Important? . How Can You Play this Low-Probability Game Intelligently? . Do NOT Go to VCs as Beggars - Go as Kings . Excess is NOT Required for Success . Bootstrap First and Raise Money Later . Some Bootstrapping to Exit Case Studies . The Buy Side of Bootstrapping to an Exit . Blitzscaling vs. Bootstrapping . Bootstrapping to Unicorns More »» . Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million . Mailchimp Bootstraps to $600M Revenue . Bootstrapping from Arizona to $10 Million . Bootstrapped Basecamp Executes a No Nonsense Strategy . How Under30Experiences Bootstrapped to $5 Million . Bootstrapping with a Paycheck . How Algo.ai CEO Amjad Hussain Bootstrapped using Services from Michigan . Seed Investors Who Like Bootstrapped Businesses . How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million . Bootstrapping with Services . How The Intern Group CEO David Lloyd Bootstrapped to $13 Million . How Passageways CEO Paroon Chadha Bootstrapped from Indiana . How SmartBuyGlasses CEO David Menning Bootstrapped to $50 Million . Death by Overfunding . How RainmakerForce CEO Mack Sundaram Bootstrapped Decisively to $5 Million+ . How FormAssembly CEO Bootstrapped a Virtual Company with a Paycheck . TimeSlips CEO Mitch Russo Bootstrapped to Exit with Sage . The VC-Entrepreneur Compensation Disbalance . BioConnect CEO Bootstraps with Sophisticated Strategic Maneuvering . Tremend CEO Marius Hanganu Bootstraps from Romania . Gesture CEO Jim Alvarez Bootstraps to $10 Million . SproutLoud CEO Bootstraps to $30 Million from Florida . Tuft & Needle CEO Bootstraps to Over $100 Million . Co-founders Bootstrap Linguamatics to Over $10M from the UK . Ownership Matters . Vainu Co-founder Mikko Honkanen Bootstraps from Finland . Entrepreneur Couple Bootstraps to $10M from Colorado . 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Bay Dynamics Co-founders Bootstrapped Using Services . Building an AI Software Company from Dallas . RJMetrics Co-founders Bootstrapped First, Raised $22M Later . Bootstrapping Niche E-Commerce Business BuyAutoParts to Exit . TemplateMonster was Bootstrapped to $15 Million . Bootstrapping Edge Hosting to $18 Million . Bootstrapping, Fund Raising and Exiting with Sefaira . Bootstrapping IdeaScale to $5M from Scratch . Bootstrapping to $10M from Finland . Happy Grasshopper CEO Dan Stewart Bootstrapped to Inflection . Bootstrapping Gravity Pro Using Services . Founder Builds Multiple Bootstrapped Education Software Companies . Bootstrapping to $10M from Australia, Raising $25M from the US . Bootstrapped Y Soft to $30M from the Czech Republic . Bootstrapped from Belarus, Raised Money from Silicon Valley . Bootstrapped SproutLoud to $30M from Florida . Bootstrapped 2600Hz Using Services . A Serial Bootstrapping Entrepreneur’s Journey . 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