Building a Virtual Company to $20 Million: Rob Cheng, CEO of PC Pitstop (Part 4)

Sramana Mitra: So, just give some metrics of how it took off. What kind of numbers were you doing? How long did it take you to get to a million in revenue for example?

Rob Cheng: In the very beginning, we had no revenue model. Revenue was not important at that point in time. It’s much more about how many users you had and whether that was growing. Revenue didn’t matter at all. So we didn’t have any advertisers.

1Mby1M Virtual Accelerator Investor Forum: With Matt Holleran of Cloud Apps Capital Partners (Part 7)

Sramana Mitra: If you look at your 2018 deal flow, how many deals have you looked at? What are the nuggets you’re seeing that speak somehow to your investment thesis? What are you seeing out there?

Matt Holleran: We make about three or four investments per year and the reason for that is we do a lot of work on the front end. But on the back end, we also take action in areas such as recruiting, partnerships, and feedback.

1Mby1M Virtual Accelerator Investor Forum: With Matt Holleran of Cloud Apps Capital Partners (Part 6)

Sramana Mitra: Let’s talk about a few of your portfolio companies. What have you invested in that you feel really good about? What did you see in these companies that really captured your attention?

You gave us one example to begin with. So give us a little bit more color on these companies that you have chosen to invest in.

1Mby1M Virtual Accelerator Investor Forum: With Matt Holleran of Cloud Apps Capital Partners (Part 5)

Sramana Mitra: Now let’s tie this into the investment strategies that you are following. What kind of cloud companies appeal to you? Of course, you want a venture scale category. That’s table stakes, otherwise, you don’t want to do the kind of investing that you’re doing. But within that, we’re looking at a very mature category. Cloud Apps is a very mature category.

1Mby1M Virtual Accelerator Investor Forum: With Arihant Patni of Ideaspring Capital (Part 5)

Sramana Mitra: If you were to assess, how many enterprise software companies that fit your thesis are operating in the market currently? What would be that number? Is it like thousands of companies? Tens of thousands of companies? What are we talking about?

Arihant Patni: We definitely have thousands of companies. This is in the enterprise tech space, so to speak. It also depends on what stage we’re looking at.

1Mby1M Virtual Accelerator Investor Forum: With Matt Holleran of Cloud Apps Capital Partners (Part 4)

Sramana Mitra: Let’s say a company in your portfolio has reached a certain level of critical mass, let’s say $50 million in revenue. They want to acquire other SaaS companies that may be able to give them a second or third product that is adjacent, and can leverage the channel.

How do you think about integrating such an acquisition or a set of acquisitions?

1Mby1M Virtual Accelerator Investor Forum: With Arihant Patni of Ideaspring Capital (Part 4)

Arihant Patni: I just had a breakfast session with a bunch of corporate venture folks. They’re all talking about how they want to evangelize startups, invest in them, work with them, and partner with them. I think that’s a terrific philosophy.

I can talk about a couple of slightly more evolved startups that we invested in coalition with other venture funds. One is called worxogo, which is in the AI space to enhance human capital productivity by sending sales agent-type nudges and motivational behavior tweaks.

1Mby1M Virtual Accelerator Investor Forum: With Matt Holleran of Cloud Apps Capital Partners (Part 3)

Sramana Mitra: I’m going to ask you something based on what we just talked about with your background as the head of platforms at Salesforce.com. My assessment is that there are probably a couple of hundred SaaS companies at this point that are doing upwards of $50 million in annual revenue.