When and where we invest

People often ask me when we invest. My standard answer to this question is that we are Series A investors, but are opportunistic so occasionally go earlier or later. Out of curiosity, I went back to run the numbers and compare the story I’ve been telling with the data. The data never lies. It turns out that I’ve been mostly telling the truth. We’ve invested in 15 companies so far from the current fund. Of those, we’ve entered seven businesses at the Series A Stage and six at the Seed or Seed Prime stage. (Seed Prime sits somewhere between a Seed financing and a Series A financing in chronology.) We invested in the two remaining businesses at Series B stage or later. This was a good exercise as it turns out we’ve done more seed investing than I would have guessed. The main difference between our seed investments and your typical seed fund is that three of the five were investments with CEOs with whom we had partnered previously or whom we have known for a long time. The other two were Seed Prime, so not the first money into the business.

In terms of business models, I talk a lot about SaaS and marketplace on this blog, but let’s check the record. Eight of the 15 businesses are true SaaS business models. Four of the businesses are marketplaces and the other three are media and/or ad tech related. This feels about right. SaaS and marketplace business models are two of my favorite - I believe they represent what the internet was made for - so I anticipate we’ll continue this theme.

When we look at dollars invested, the numbers tell a slightly different story and the answer I’ve been telling rings truer. We’ve invested roughly $4 million in Seed and Seed Prime funding rounds, $24.2 million in Series A rounds and $17.2 million in Series B and later rounds. Of course, these numbers include subsequent rounds of funding into businesses that we entered earlier in their lifecycle. If we isolate our first money into businesses, we still committed $4 million into Seed and Seed Prime rounds, but Series A represented $17.6 million and Series B and later consumed $7.5 million. In other words, 60% of our invested capital has gone into Series A rounds and this feels exactly where I would expect it to be.