1Mby1M Virtual Accelerator Investor Forum: With Steve Beck of Serra Ventures (Part 2)

Sramana Mitra: That’s very good to hear that kind of alternative investment thesis because with 700 plus micro-VCs in the industry, there is no way we’re going to get 2,500 unicorns. Unicorns are supposed to be rare, so it’s mathematically impossible to have that many. I hear from too many investors that they’re all chasing unicorns. I’m actually thrilled to hear the investment thesis that you just laid out. Let’s double-click down on that a bit. Is that mainly a B2B thesis?

Steve Beck: We’re an opportunistic firm. We have a fairly broad thesis which is a little bit unusual. I would say about 70% of our fund is information tech broadly. Within information tech, we do B2B SaaS. I know a lot of people feel that’s played out but we don’t >>>

1Mby1M Virtual Accelerator Investor Forum: With Vivek Ladsariya of SineWave Ventures (Part 5)

Sramana Mitra: Two of my favorite unicorn companies are Veeva and Fortinet. These are multi-billion dollar market cap companies. Veeva, in its entire history, raised $7 million in capital of which $4 million was not necessary. They just had so much revenue and momentum. It was basically a company built with revenues and traction. Fortinet was an incredibly capital-efficient company that scaled tremendously. Today, it’s over $1.5 billion in revenue with a tremendous market cap.

Vivek Ladsariya: I agree. I’ll add Salesforce to that list as well. It’s not as capital-efficient as Veeva may be, but they didn’t raise the kind of money a standard unicorn might have. >>>

1Mby1M Virtual Accelerator Investor Forum: With Steve Beck of Serra 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 Steve Beck was recorded in May 2018.

Steve Beck, Managing Partner at Serra Ventures, discusses his firm’s non-Unicorn investment thesis. Refreshing to hear.

Sramana Mitra: Let us introduce you to the audience. Tell us about the fund. How big is it? What kind of investments do you like to make? What is the focus? >>>

1Mby1M Virtual Accelerator Investor Forum: With Vivek Ladsariya of SineWave Ventures (Part 4)

Sramana Mitra: Can you talk to me a bit about how you view TAM? I’ll give you the context of where I’m coming from in asking this question. We are in April 2018. Lots of stuff have already been built. Nowadays, there aren’t as many wide-open opportunities out there to build these billion-dollar TAM businesses.

Some people only want to invest in $10 billion plus opportunities which are fewer and farther between. I actually see that there are many, many niche opportunities out there. Some of these businesses need to be built for small amounts of capital whether it’s the $200 million TAM opportunities or $600 million TAM opportunities. >>>

1Mby1M Virtual Accelerator Investor Forum: With Curtis Feeny of Silicon Valley Data Capital (Part 3)

Sramana Mitra: Are you looking for billion-dollar TAM companies that are potential unicorns or are you open to the possibility of companies that are going to be solving niche problems with the kinds of technologies that you’re talking about but don’t necessarily have the billion-dollar TAM? Maybe they’re lower TAM companies and they’re going to result in smaller exits.

Curtis Feeny: One of our strategic theses is, both Jim and I believe that investing in early-stage companies with a smaller fund size gives you the opportunity to have excellent returns for your investors with $300 million to $500 million exits. We can return the fund on a $500 million investment if we do it right. That does not have to be a unicorn. What it does need is very high >>>

1Mby1M Virtual Accelerator Investor Forum: With Vivek Ladsariya of SineWave Ventures (Part 3)

Sramana Mitra: When did you invest in this company?

Vivek Ladsariya: This was a round that was announced in January. It was completed late last year.

Sramana Mitra: It’s already acquired?

Vivek Ladsariya: That’s correct.

Sramana Mitra: What’s the total amount of funding to exit ratio? How much did you put in and how much was the exit price? >>>

1Mby1M Virtual Accelerator Investor Forum: With Curtis Feeny of Silicon Valley Data Capital (Part 2)

Sramana Mitra: In other words, you are okay with companies that have some customer validation but not necessarily revenue?

Curtis Feeny: Absolutely. We have a few more deals where we put $250,000 to $750,000, take a lower ownership position, and bet on that team to get to final product. Maybe they have an alpha product or maybe early beta but no revenues. It’s not even necessarily a price round. We might do a convertible note with a cap on it just to give us access to the deal and the team and then hopefully, make a core investment.

Sramana Mitra: What about geography? >>>

1Mby1M Virtual Accelerator Investor Forum: With Vivek Ladsariya of SineWave Ventures (Part 2)

Sramana Mitra: What about geography? Do you invest all over the United States or just in the two locations where you are located?

Vivek Ladsariya: We have companies across the US. We are also looking for companies outside the US. We have looked at companies coming out of Israel and Latin America.

Sramana Mitra: Let’s take a few companies from your portfolio and double-click down to understand what you’ve invested in. How do you decide what to invest in? Give us a few examples. Take us through the process of understanding of how you’ve decided to invest in those companies. >>>