Today, Scale Venture Partners is pleased to announce a new $335M Fund, Scale Venture Partners V. We are very grateful to our Limited Partners for their participation in Fund V. Every one of our investors has a compelling mission and our role is to generate the capital gains to help them achieve it. We are glad to earn and re-earn that support every fund.
We are even more grateful to the entrepreneurs we have had the privilege of working with over the years. They are ones who create the value that makes everything possible. The best part of every day is working with founders and executives like Aaron Levie (Box), Chris Golec (Demandbase) and Alex Stigsen (Realm) as they build the companies that are changing the future of business.
Writing in January 2016 as fear waxes and euphoria wanes, we are reminded again that financial markets are fickle but technology trends are strong. Trends like cloud and mobile adoption, the confluence of big data and machine learning, and the re-architecting of the enterprise tech stack are going to drive and disrupt the tech industry for the next ten years. By contrast, the fears of Jan 2016 and the euphoria of much of 2015 will be long since forgotten by then. Founders and teams that focus on the long term will succeed.
We try and keep our business simple. We invest solely in information technology companies, primarily in startups focused on selling software to businesses. We only invest in companies once they have paying customers but there is not a minimum revenue requirement. Sometimes repeatability is clear after ten customers, sometimes it takes a hundred. We will know a repeatable sales model when we see it! We can invest right up to an IPO and thus while our typical initial investment is about $8 MM and can be as low as $5MM, we can scale up to $25MM+ in total. We are thesis driven. When we meet with an entrepreneur we want to learn about the company, but we should already know about the market and the trends driving it. Andy talks here about the trends we are focused on right now.
Because we invest just as a company is starting to grow we try and add particular value around helping companies scale from $1MM to $10 MM and then $100 MM, a journey we have seen many times. A year ago we hired Dale Chang to our growing team run Portfolio Operations. We want to help our companies, we also know clearly what our role is as a board member, and what can only be done and solved by management.
Finally we have learned that we have to be flexible. Where we invest has to evolve as technology progresses and how we advise our companies as board members has to take into account changing business conditions. Right now the big story is a clear shift in the capital markets from a focus on growth at all costs, to a more balanced growth + profitability mission. Companies that need to raise capital will have to take this reality into account but without letting it dominate the longer-term mission. By contrast we see remarkable continuity in the trends we have been investing in for the past five years (cloud, data, machine learning). We believe that great companies with a vision for the future can prevail in any business climate. We look forward to investing in those companies.
