1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners (Part 3)

Mark Achler: Our preference and our sweet spot is, we like it when there’s velocity and when there’s momentum in the sales pipeline and when there is a scalable way to generate growth, which is also another proxy for saying size and scale of the opportunity. There are a lot of wonderful companies out there that’s not just appropriate for venture. We need to get an understanding of the potential of the company, the potential of the market, and the team’s ability to sell.

Let me give you a concrete example. In the last three years, we’ve met with 4,200 entrepreneurs at my fund. We get pitches four or five times a day. The vast majority of entrepreneurs when they come and pitch, they start with, “Our product does…”. I stop them halfway through. >>>

1Mby1M Virtual Accelerator Investor Forum: With Ho Nam of Altos Ventures (Part 3)

Sramana Mitra: Our philosophy is much more in the former kind of financing. We are very much in the capital-efficient business building with a fundamentals-driven approach. Even if you raise a lot of money, our approach is, you need to do that at the right time with an eye towards the finer fundamentals.

Ho Nam: Just because you’re being frugal and pragmatic doesn’t mean you’re forever being conservative. We have one company that raised a billion in funding last year. They didn’t need to raise a billion. They had $300 million of cash in the bank. Earlier this week, we announced that one of our later-stage companies just raised $50 million. We are working very hard to get that company to profitability this year. We don’t need the money.

As you scale that business, adding another $50 million to the balance sheet to be opportunistic makes sense. When you see >>>

1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners (Part 2)

Sramana Mitra: Can you also double-click down into cyber security? Cyber security has urgency. As a result, it is also one of the most crowded markets of venture capital. It has always been that way. I’ve been in this industry for more than 20 years. There has always been huge amounts of cyber security investments and huge amounts of cyber security startups. How do you parse cyber security?

Mark Achler: I’ll give you an example of the two portfolio companies that we have. One is called NowSecure. They are the experts in mobile. If you look at utilization, more utilization and transactions are done through mobile than on the web. But if you look at resources, the vast majority of resources and infrastructure around cyber security are on the web. If you ask the CSO of a large company to show their head count, >>>

1Mby1M Virtual Accelerator Investor Forum: With Ho Nam of Altos Ventures (Part 2)

Sramana Mitra: Let’s switch back to our sweet spot which is the early stage venture game. Series A VCs these days are looking for a million dollar annual run rate and 100% growth rate. If you don’t deliver that, you can’t raise Series A except in very rare exceptions where you have a track record.

If you are a regular founder looking for a regular Series A, these are the things that you need to come to the table with. Let’s say a startup gets to that. What are the circumstances under which they ought to consider working with you as opposed to one of the larger VCs with bigger brand names? >>>

1Mby1M Virtual Accelerator Investor Forum: With Mark Achler of MATH Venture Partners (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Mark Achler was recorded in October 2017. 

Mark Achler, Managing Director, MATH Venture Partners, discusses their investment strategy and the industry trends.

Sramana Mitra: Tell us about MATH Ventures. What is the focus of your firm? How big is the fund? What sized investments do you make?

Mark Achler: We’re based in Chicago. We’re a $28 million fund. We’re just launching our second fund as well which will be twice the size. In our first fund, we made investments of $500,000 to a million dollars. Typically, we’re early stage investors. We do some Series A and seed investing. >>>

1Mby1M Virtual Accelerator Investor Forum: With Ho Nam of Altos Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Ho Nam was recorded in April 2016. 

Ho Nam, Managing Director at Altos Ventures, makes a clear distinction between capital efficient company building and the “grow at costs in all sorts of unsustainable ways” philosophy. These are two distinctly different ways of building businesses.

Sramana Mitra: Why don’t we start by you introducing Altos Ventures and your core philosophy about investing? Obviously, it’s somewhat different from other VCs out there. I would like our audience to learn how you look at the venture landscape and how you and your colleagues at Altos have come up with a differentiated positioning for the firm. >>>

1Mby1M Virtual Accelerator Investor Forum: With Nitin Pachisia of Unshackled Ventures (Part 6)

Sramana Mitra: One last question, which is another trend. I would say it’s less visible. We are in 2017. Lots of stuff have already been built. Especially if you’re B2B investors, there aren’t that many wide open opportunities out there nowadays. Building another Salesforce.com is not that easy.

There are many niche opportunities. Some of these businesses need to be built for very small amounts of capital – $1 million to $2 million and sold for $10 million to $15 million. In some case, built for $250,000 to $500,000 and sold for $5 million to $10 million.

I’m encountering a class of investors who are actually looking at these. These are smaller TAMs. They are not 

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1Mby1M Virtual Accelerator Investor Forum: With Jason Lemkin of Storm Ventures (Part 4)

Sramana Mitra: Concur is one of the best examples of replacing paper. That has built a very valuable company. It went public on its own. It made the shift from being a license software company to a cloud company as a public company which is very difficult to do. It did very well as a public company and now recently got acquired by SAP for $8.5 billion.

Jason Lemkin: You might look at Concur and say, “How can I possibly compete?” What’s Concur doing now? $800 million run rate. There’s plenty of room at the bottom that you and I can get together and we can build a $100 million business and SAP wouldn’t even notice. >>>