1Mby1M Virtual Accelerator Investor Forum: With George Spencer of Seyen Capital (Part 4)

Sramana Mitra: One of the options that we have to keep in mind is that the vast majority of strategic acquisitions happen in the $50 million to $60 million price point. For everybody concerned about making money with a $50 million exit, you have to build the company in that $5 million to $10 million capitalization.

George Spencer: That’s right. The goal here is not to sell the company for $50 million to $60 million. If that’s what ends up happening, you end up making three or four times your money, so be it. Just getting yourself to the position where you’re able to do that is important. I think that you need to be very capital efficient and conscious of that. To be honest with you, I don’t think that happens all that much out in the Valley. >>>

1Mby1M Virtual Accelerator Investor Forum: With George Spencer of Seyen Capital (Part 3)

Sramana Mitra: Your point is very well-taken. In the early stage, not everything is figured out. There is a certain amount of pivoting that goes on often in the quest for that repeatable sweet spot. Capital markets change and competitive markets change. You just have to adapt.

With that understanding though, I want to ask you a slightly different question. We are in the beginning of 2019. Lots of stuff have already been built. It’s not like there are so many wide open opportunities out there to build these massive unicorns. There are some and there are categories where people are pursuing that kind of opportunities. There are also many niche opportunities. Some of these businesses need to be built for small amounts of capital – $1 million to $2 million – and then sold for $10 million to $15 million. Do you have appetite for this type of investments? >>>

1Mby1M Virtual Accelerator Investor Forum: With George Spencer of Seyen Capital (Part 2)

Sramana Mitra: Within B2B SaaS, do you have a preference between selling to enterprises versus selling to small businesses?

George Spencer: I’ve invested in the past in both and made money on both. My diligence is understanding how you’re going to be able to build a distribution channel based on the price points that you’re able to sell your software for. I’ve worked with SPS Commerce that was selling outbound telemarketing salesforce. I can work with both small businesses that make $100 a month per customer all the way to companies taking in $5 million a year from some customers.

Sramana Mitra: Across the companies that you have invested in both from this fund as well as your general experience, can you share a few examples and give us a flavor of when you went into the deal, what did you see? What is it that made you decide to invest in this particular set of companies? Give us some case studies so we understand how you think about investments. >>>

1Mby1M Virtual Accelerator Investor Forum: With George Spencer of Seyen Capital (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 George Spencer was recorded in January 2019.

George invests in SaaS companies mostly in the Midwest from a small fund out of Chicago. The interview contains an excellent discussion on ideal levels of capitalization for good exit prices. >>>

Best of Bootstrapping: Why is Bootstrapping Important?

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Over the last decade and more, I’ve had the privilege of working with a large number of bootstrapped entrepreneurs. These include self-financed companies and also modestly capitalized startups that operate in a capital-efficient manner applying the principles of bootstrapping. [You can review my Bootstrapping Course to recap these.]

For our Seed Capital series of podcasts and blog interviews, I’ve interviewed hundreds of investors, especially micro-VCs and angels who are playing and important role in the early stage game.

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1Mby1M Virtual Accelerator Investor Forum: With Spencer Crawley of Firstminute Capital (Part 5)

Sramana Mitra: In a nutshell, you are still looking at unicorn exits as the preferred investment thesis.

Spencer Crawley: Correct.

Sramana Mitra: It is the conventional wisdom of venture capital.

Spencer Crawley: We debated it at length. It’s not something that we took as gospel from day one. It’s a more organic process of building a business and scaling. In a way, it’s a very VC question in terms of when you’re meeting a seed-stage company to have a meaningful internal debate if this is a billion dollar exit or not. It’s a little bit academic. The amount of unknowns are so significant. >>>

1Mby1M Virtual Accelerator Investor Forum: With Spencer Crawley of Firstminute Capital (Part 4)

Sramana Mitra: What are some of the highlights of your portfolio? Tell us about what stage and what condition you encountered when you chose to invest in them. What is it about them that caused you to place the bet?

Spencer Crawley: I have to think through my head about which ones are public and which are not. I mentioned the gaming business in Berlin. It’s a business called Klang. We invested in the A round at the beginning of this year. Elliot, a colleague of mine, sourced that business by trailing through a list of 2,000 names that flushed the conference in Helsinki. He met them there and started to open a dialogue with them. They’re building an MMO.

The business was founded a couple of years ago but its timing had become really interesting. When we met them, they had success with their initial >>>

1Mby1M Virtual Accelerator Investor Forum: With Spencer Crawley of Firstminute Capital (Part 3)

Sramana Mitra: We just announced a partnership with EIT Health. They are going to be accelerating 115 companies with us. The first 15 have been named.

Spencer Crawley: How did that come about? That seems really impressive and exciting.

Sramana Mitra: We have very deep connections in Europe. I am married to a European. My husband, Dominique Trempont, was Steve Jobs’ right hand at Next. He’s on the Board of one of your British media conglomerates DMGT.

Spencer Crawley: I’m on the fourth floor of Northcliffe House. >>>