Steve Bird, Partner at Focus Ventures:
Let me start with you, Steve, what does your firm, as a late-stage Series C or D investor, look for when you’re considering making an investment at this point?
Well, that’s a great question. I think first of all there are three important things that we look for that are very much like all investors we look for some sort of strong technology or another proprietary advantage we look for a market that has the potential to grow fast and be big and we look for a strong management team.
I would suggest that most all venture capitalists look for those three things the thing that makes us a little bit different is we also look for momentum.
We’re investing late enough that we expect the companies to have their products in the market to begin to have some revenue and we want to see some good traction with those revenues.
I mean we are definitely looking for companies that have begun to have revenue shipments but still have a long ways to go in terms of their growth path.
David Williams, Williams Capital
What is the exact role of an investment banker in the Silicon Valley venture community and what kind of relationships do you want to have with venture investors?
Sure, half the time we’re doing capital raises and half the time we’re doing M&A. Typically it’s for later stage companies when a company is doing a series a for example or Series B they’re usually going straight to the VC’S, they don’t need an investment banker to help them out with that. It’s usually the companies that are already venture-backed that are moving on to the series C, D, E or are looking to get acquired and do an M&A process that use us; and usually, it’s the VC’S on the board that are contacting us and asking for our help.
One of the least understood aspects of the startup ecosystem in Silicon Valley is the specialization of late-stage venture capital investors and private equity in providing liquidity and an M&A strategy to startup companies.