1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear Ventures (Part 2)

Sramana Mitra: An aspect of running a company that’s not pleasurable at all.

Coming back to Clear Ventures journey, let’s double-click down a little bit on what stage are you looking for. When you say you are willing to put in very early stage, what are you looking for in terms of validation? Are you looking for just concept or revenue? What is comfortable for you?

Rajeev Madhavan: We have done all the way where the concept was not fully baked. We have had people who just sit here with us. We take them to some of the customers and refine the generic idea. We’ve done investments at that stage. >>>

1Mby1M Virtual Accelerator Investor Forum: With Rajeev Madhavan of Clear 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 Rajeev Madhavan of Clear Ventures was recorded in January 2018. 

Rajeev Madhavan, Founder and General Partner at Clear Ventures, was first a highly successful serial entrepreneur, and brings to the VC game an entrepreneur’s view of the world. Rajeev highlighted the Series A gap in a big way.

Sramana Mitra: Tell us about Clear Ventures. How big is it? What is the investing focus? What sized investments are you making? >>>

1Mby1M Virtual Accelerator Investor Forum: With Ira Weiss of Hyde Park Venture Partners (Part 4)

Sramana Mitra: Since 2013, there have been 50,000 to 70,000 seed investments. By seed, I mean the entire spectrum of pre-seed, seed, post-seed, and pre-Series A. That’s a lot of companies. The number of venture-funded companies is still very low. It’s 1,200 to 1,500 and it remains more or less constant.

At the other vector is that there are 500 to 700 micro-VCs of various sizes. There is a lot of capital, but it’s still very difficult to navigate for entrepreneurs. One of the reasons why I’m talking to all of you guys and trying to get some sense of this process is to help the entrepreneurs gain clarity on how to navigate this. >>>

1Mby1M Virtual Accelerator Investor Forum: With Ira Weiss of Hyde Park Venture Partners (Part 3)

Sramana Mitra: Let me ask you the TAM question. We are in January 2018. Lots of stuff have already been built. Nowadays, there aren’t as many wide open opportunities to build these multi-billion dollar companies. It’s not like very corner of the enterprise software market is full of billion-dollar opportunities. There are lots of niche opportunities.

Some of these have lower TAMs. Some of these businesses need to be built for small amounts of capital – $2 million sold for $15 million. In some cases, $250,000 and sold for $5 million to $10 million. What is your perspective on these kinds of opportunities? Is this something you look at? >>>

1Mby1M Virtual Accelerator Investor Forum: With William Hsu of Mucker Capital (Part 4)

Sramana Mitra: Can you put some quantitative parameters around that $200 million exit? For a good, healthy $200 million exit where everybody makes money, what is the optimum amount of capital invested? What kind of revenue levels do you target?

William Hsu: Depends on the category. For a SaaS or an enterprise software solution, typically, anywhere from $20 million to $40 million will be good enough to get anywhere from $100 million to even $300 million in valuation. If it’s an e-commerce business, it probably has to get to closer to $100 million in revenue. Software businesses are a lot more capital efficient.

If you’re looking for an opportunity that is sub-unicorn in size, try to find businesses without an inventory or any cost of goods. To >>>

1Mby1M Virtual Accelerator Investor Forum: With Ira Weiss of Hyde Park Venture Partners (Part 2)

Sramana Mitra: It’s the same model as Gartner? The software companies are paying a subscription fee to G2 Crowd to be included in this review process.

Ira Weiss: It is free for the software companies. Some of the companies do choose to pay if they want to pay if they want to have an enhanced presence on the site. I actually encourage people who have early-stage software companies to use the site and have your customers go to the site. There’s no better way to sell software than to have your customers sing your praises. That was the reason G2 Crowd was started. >>>

1Mby1M Virtual Accelerator Investor Forum: With William Hsu of Mucker Capital (Part 3)

Sramana Mitra: Our philosophy in One Million by One Million is entrepreneurship equals customers, revenues, and profits. Financing and exit are optional. We make sure that customers are willing to pay for whatever it is that you’re selling. Whatever it is that you’re doing, that is the fundamental belief system of our program.

William Hsu: It’s the fundamental belief of any capitalist system.

Sramana Mitra: It should be. In Silicon Valley, it is not. Silicon Valley operates on venture welfare.

William Hsu: The funny thing is if you’re able to prove product-market fit and you’re raising money simply for distribution, we >>>

1Mby1M Virtual Accelerator Investor Forum: With Ira Weiss of Hyde Park 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 Ira Weiss of Hyde Park Venture Partners was recorded in January 2018. 

Ira Weiss, General Partner at Hyde Park Venture Partners based in Chicago, talks about venture activity in the Midwest.

Sramana Mitra: Tell us about Hyde Park. What is your investment focus? How big is the fund? What sized investments do you like to make? >>>