1Mby1M Virtual Accelerator Investor Forum: With Corey Schmid of Seven Peaks Ventures (Part 2)

Sramana Mitra: You emphasized geography greatly. Pacific Northwest is the sweet spot of the fund. You don’t invest outside?

Corey Schmid: We do. We call it the Mountain West. One of our newest deals is out of Phoenix. They’re in the no-password security space. Majority of our deals are in Oregon and Seattle. We have five or six investments in the Bay Area. We have a deep network there based on our syndicate partners and investors that come on in later rounds.

We have two in Boulder. We’re seeing talent in those regions. What’s lagging is sophisticated capital to help grow those businesses. The Bay Area is chock full of successful funds. We’re identifying opportunities primarily outside of the Bay Area. >>>

1Mby1M Virtual Accelerator Investor Forum: With Greg Borchardt of Caerus Ventures (Part 5)

Sramana Mitra: I’m going to ask you a slightly different question. Given what you are doing, it sounds like there must be tons and tons of niche use cases out there of your model. We’re in 2018. There’s a ton of stuff that have already been built. Some of these use cases are not necessarily all billion-dollar TAM use cases.

Some of these are smaller niche opportunities. You can build great businesses with one or two million dollars and these probably can be good acquisitions for other larger companies for $10 million to $15 million. In some cases, slightly larger or smaller. You could be investing $5 million and selling for $25 million. You could be investing $250,000 to $500,000 and selling for $5 million to $10 million. Is that something that’s interesting to you?

Greg Borchardt: My non-answer is it depends. We look for deals where we can be happy without needing a multi-billion IPO. For example, if we >>>

1Mby1M Virtual Accelerator Investor Forum: With Corey Schmid of Seven Peaks Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this series. The following interview with Corey Schmid of Seven Peaks Ventures was recorded in February 2018.

Corey Schmid is General Partner at Seven Peak Ventures, a firm with a focus on the Pacific Northwest.

Sramana Mitra: Tell us a little bit about yourself and Seven Peaks. Let’s get to know the fund. What size is the fund? What’s your investment thesis?

Corey Schmid: I’m a General Partner with Seven Peaks Ventures. We are located in Oregon. We are an early stage venture capital >>>

1Mby1M Virtual Accelerator Investor Forum: With Greg Borchardt of Caerus Ventures (Part 4)

Sramana Mitra: I’ll tell you where I am a little bit uncomfortable with what you’re saying. I don’t feel a token angle of it. Your point is well-taken that somebody with a proven business model is a more interesting scenario than a concept financing or concept ICO. Why do I want tokens in this ecosystem and this exchange?

There are certain businesses that are very token-friendly businesses where the tokens will naturally float around and change hands. There are certain businesses that have that characteristic. There are others that don’t have that characteristic which in my opinion should not be doing ICOs. In this case, I’m struggling to understand the token angle.

Greg Borchardt: There are two separate tokens that the company is releasing. I don’t work for the company. I’m an investor. I’m not on the >>>

1Mby1M Virtual Accelerator Investor Forum: With Greg Borchardt of Caerus Ventures (Part 3)

Sramana Mitra: What is the go-to market strategy for this company?

Greg Borchardt: There are two sides of the business. They started off in the medical device space. They created a consumer product that we help them down the supply chain to develop the components for the product and ship it over to the US. They initially launched the product in the United States. Initially, they started with online-only.

We felt that it made the most sense to get feedback from the early adapters and be able to iterate from generation one to a generation two product, based on the early feedback we were getting from the heavy users. Then they subsequently launched the product at major retailers in the US including Best Buy and Target as well as a few overseas markets. >>>

1Mby1M Virtual Accelerator Investor Forum: With Tim Wilson of Artiman Ventures (Part 3)

Sramana Mitra: Let’s talk about some of your portfolio highlights. What are you really proud of having invested in? As you choose the ones to talk about, specifically point out when you saw them, in what state did you see them, and what is it about them that attracted you?

Tim Wilson: I’ll start with a company that I invested in in 2004. It’s called InvenSense. The founder came in with two other co-founders. His model and idea was to build a motion sensor. I still remember his words. He said, “Here is the size of motion sensors today and I’m going to put one in every smartphone in the world.”

He didn’t have a product. He had a concept. He had a track record. He was a manufacturing whiz. He knows how to build things. We looked at him >>>

1Mby1M Virtual Accelerator Investor Forum: With Greg Borchardt of Caerus Ventures (Part 2)

Sramana Mitra: Let’s then talk about the investment thesis. This is your second fund. You’ve already used this investment thesis and invested your first fund in a bunch of companies. If you could take us through a few examples that illustrates how you think about your investment thesis and how the companies you’ve invested in fit with that investment thesis, that would probably be the best starting point to understand your unique investment thesis.

>>>

1Mby1M Virtual Accelerator Investor Forum: With Tim Wilson of Artiman Ventures (Part 2)

Sramana Mitra: What are you seeing in your deal flow? We’ll come to what you’ve invested in in a moment. You’ve been in this business for a long time. Let’s look at the 2017 deals that has approached you for investment. What are the trend lines that you see in there? What are you seeing?

Tim Wilson: I see several different trends. One is more money is being invested at higher valuations prior to reducing significant risks. I’ve now done this for over 16 years. I’ve seen the ebbs and flows. Early stage venture capital requires a certain amount of ownership in order to work in the end. I’ve seen valuations creep up and up to the point where we walked away from deals not because they’re not good deals. We don’t think they’re going to make the metrics work for early stage ventures. >>>