The most experienced and successful venture capitalists grok the concept of the power law and how it describes the outcomes of startup investments. Simply put, 80% of the returns come from 20% of the deals. The 80-20 rule can be seen in both natural and man-made phenomena such as the size of earthquakes, the size of solar flares, the distribution of wealth and movie ticket sales. The power law is so common that Peter Thiel, the billionaire tech investor and entrepreneur, declared that "we don't live in a normal world, we live under a power law." According to Thiel, it’s like the law of gravity—you can’t escape it. Paradoxically, if this power law phenomenon is so simple and so common, why does Thiel declare that the "biggest secret in venture capital is that the best…Read More
We invest in fast-growing software, mobile and Internet companies at initial scale, typically over $1 million in revenue. We invest actively across North America and have a dedicated fund focused on South Korean companies.
We prefer founder-led companies that have bootstrapped or grown to initial scale with minimal capital. We like to back teams that can grow efficiently without relying on excessive amounts of outside capital.
We often provide a company’s first institutional capital and will invest up to $10 million over the life of the company. Our typical initial investment ranges between $1-5 million, for which we seek a meaningful ownership stake.
We typically take an active board role in helping founders to scale their teams and companies. We are especially active in the early years of our partnership with founders, but have the patience to nurture companies for over a decade.
Vertical Markets: A Trillion-Dollar Opportunity
According to a Gartner, vertical-specific software is by far the largest category of the software market posting $100B in sales in 2013 and accounting for 28% of the market. The second biggest category, operating systems, holds only 8% of the market, ahead of database management systems, ERP, middleware and security. $100B is a surprisingly large … Read More
Beyond Competitive Advantage
Imagine two very different business worlds. One is a world in which market forces work their magic. If companies are profitable, new competitors enter and profits get worked down to nothing. If there is too much competition, companies exit (or go out of business) so that they neither lose nor make much profits. The other … Read More
SaaS: Early Innings, $1 Trillion Game
In our work as software investors, we think a lot about where we are in the adoption cycle for the current generation of software-as-service (SaaS). We know quantitatively and qualitatively that the opportunity to bring productivity and enterprise functions to the cloud is huge, but at the same time, we worry about investing into a … Read More