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 Investor Introductions page. Then start looking for entrepreneur – investor fit. Today I introduce you to Yanev Suissal.
Yanev Suissa is General Partner at SineWave Ventures out of Washington DC and Silicon Valley. The firm invests alongside some major firms like Andreessen Horowitz and NEA. Yanev talks about how they invest, and also the trends he sees. You can listen to the podcast interview here.
Sramana Mitra: So tell us about SineWave Ventures. What is the focus of your firm? How big is the fund? What size investments do you make?
Yanev Suissa: SineWave mainly works with enterprise technology startups similar to the ones in the 1Mby1M network. We look for commercial technologies where we can help them as a VC firm in navigating both commercial and public sector partnerships.
We’re big believers that the overlap between the private sector and the public sector is only increasing. Enterprise technologies, across the board, need to pay attention to public sector in terms of them being giant customers, which can be very sticky in terms of regulatory risks. We end up using our significant resources and ecosystem to advance those startups.
Smarana Mitra: You are located in Washington DC?
Yanev Suissa: We are. We have an office in both Silicon Valley and Washington DC, but the main headquarters is in Washington.
Sramana Mitra: That’s actually interesting. How big is the fund?
Yanev Suissa: The fund we manage is over $60 million. We’re on our first fund right now. We’ve done a few deals already. We do seed, Series A, and Series B. Our main focus is on seed, A, and B always alongside another top tier investor in our syndicate who we sometimes bring in or who sometimes brings us in. The typical check size could be as small as $250,000 for seed. On average, an A is usually around $3 million to $5 million.
Sramana Mitra: Do you lead these rounds?
Yanev Suissa: We can lead rounds. We always syndicate with top tier partner of ours. Usually folks want that partner to lead because they’re usually the bigger guys like NEA, or like my former firm, or Andreessen Horowitz. Usually those guys lead, but we do often lead when it’s an internal round or when they want different pricing.
Sramana Mitra: I’ve worked with NEA for many years. They invested in one of my companies. I’ve funded other clients through NEA. That’s a very big fund that can only do much later stage work. If you do seed and series A, that’s not NEA’s sweet spot.
Yanev Suissa: No, that’s not true at all. I worked at NEA for about a decade before starting SineWave. NEA is very closely involved in SineWave as are some of the other firms. A lot of the seed funds, smaller funds, and entrepreneurs who’ve been burned sometimes like to harp that these larger funds like Sequoia and NEA are all later stage vehicles. Actually the majority of NEA’s companies are Series A investments. They do, at least, 30 or so seed deals a year.
Sequoia, I imagine, does even more deals, but I don’t know the exact numbers. They do everything. The difference with a big fund is you de-risk your financing because they put some in a seed round, as well as in an A round, B round, and also in a C round. They do put a lot of money into a company, but they do it in multiple rounds rather than all in one.
Sramana Mitra: Let’s actually take the example of working with a deal with you and NEA as co-investors. How would that play out? Obviously, given NEA’s fund size, they can’t put partners on the board of these seed deals. Help us understand who prices the deal, who leads the deal, and who gets on the board of the deal on NEA’s behalf. On your side, I imagine, it’s much more straightforward.
Yanev Suissa: Great question. We work with all different kinds of parties. Our deals go three ways. The top seed investors tend to be a little different than the top A and B investors. Sometimes we find a deal and we bring it to them. Sometimes they find a deal and they bring it to us. Sometimes we target a deal and we say, “Hey, I want to be in this deal, because I think I can really help this company.”
The way it would typically work is, the big investor takes the board seat. At SineWave, we usually don’t take board seats in our partnerships. We take observer seats. We like to be in the board meetings to hear what’s going on.
When you mention that you’re trying to work with Amazon, I could say, “We know the senior folks at Amazon. We can help you.” We like to be there to know that we can help, but we don’t require a board seat. The big fund would take a board seat for their seed investments. To be fair, I grew up at NEA as a VC so I know how they do it a little bit, but I don’t want to speak for them.