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Ed Sim is the Founder of boldstart ventures, which partners with bold founders reinventing the enterprise stack at the inception stage. Ed takes us inside the journey building boldstart, from its first $1m fund in 2010 up to $850m in AUM today.
Timestamps:
(00:00) Intro
(03:48) Evolution of early stage investing(05:11) Inception stage investing
(10:32) Backing bold founders reinventing the enterprise stack(11:20) Repeatable ways to build enterprise businesses
(12:04) The 5 P’s of early stage investing
(14:12) Backing Guy Podjarny and Snyk
(18:18) Knowing when to follow-on
(19:18) The 3 Ch's of a good board member
(22:01) How Ed’s board role changes over time
(24:20) Balancing founder friendly with returns
(27:20) How to build customer relationships
(30:24) Advice for closing customers
(33:47) Creating the Seed category in 2009/10
(37:31) boldstart’s $1m Fund 1
(39:00) Why Ed didn’t join a large firm in 2012
(39:55) boldstart’s $16.5m Fund 2
(40:26) Why LPs passed on the first funds
(43:11) Leading rounds in Kustomer, Snyk, BigID, and Blockdaemon in Fund 3
(47:09) Why $112m Fund 4 was the hardest to raise(50:52) Ed’s approach to LP fundraising
(55:12) Inside Meta’s acquisition of Kustomer and sale back to the founders
(59:52) Backing Rahul from Superhuman a 2nd time
(01:00:52) The different GTM playbooks
(01:02:20) Importance of contract size and time to close
(01:05:07) Why AI makes security more important
(01:06:11) When to switch from founder-led sales(01:07:46) Backing ProtectAI after a conference
(01:08:28) Balancing between inbound and outbound sales
(01:09:55) Winners and losers in AI
(01:15:26) Building the boldstart team
(01:25:19) Lessons being an interim CEO
(01:27:15) How ZIRP pulled revenue forward
(01:29:08) The death of high growth software
(01:32:58) Identifying startup opportunities incumbents won’t crush
(01:35:00) Second order effects of AI
(01:36:46) Using "Intuitive TAM" to size new markets
(01:38:04) Investing before there’s a market map
(01:38:57) Balancing family, fitness, and career
Referenced:
https://boldstart.vc/
Turning Down HBS: https://x.com/edsim/status/1315644287007240193
Ed’s tweet on raising Fund 4: https://x.com/edsim/status/1315644287007240193
Second Order Effects of AI: https://www.whatshotit.vc/p/whats-in-enterprise-itvc-379
Death of Hyper Growth: https://x.com/edsim/status/1797613384994623808
Where to find Ed:
Twitter: https://twitter.com/edsim
LinkedIn: https://www.linkedin.com/in/edsim/
Newsletter: https://www.whatshotit.vc/
Where to find Turner:
Twitter: https://twitter.com/TurnerNovak
LinkedIn: https://www.linkedin.com/in/turnernovak/
Newsletter: https://www.thespl.it/
Jamin Ball is a Partner @ Altimeter Capital where he sits on the board of Airbyte, Clickhouse, dbt Labs, Prisma, Tabular. Jamin has also led investments in Deel, MotherDuck, Personio and Starburst. Prior to Altimeter, Jamin spent 5 years at Redpoint where he led investments in Workato, Monte Carlo, Cityblock Health, Root Insurance.
Ed Sim is one of the best seed round investors in venture as the Founder and Managing Partner @ Boldstart, Ed focuses specifically on developer, infra and SaaS at pre-seed and seed round. Over the last decade, Ed has backed some of the best including Snyk, BigID, Kustomer, Front and Superhuman.
In Today's Episode We Discuss:
1. How to Invest Successfully in 2024:
What are the three biggest mistakes growth investors can make in 2024?
Why should founders not start a platform company?
What were Jamin and Ed's biggest mistakes from the ZIRP era?
How does Jamin justify paying an $8BN price for Hopin? What were his lessons?
2. The M&A Markets in 2024:
Did Figma kill the M&A markets for 2024? What should we expect in M&A?
Why will private companies buying private companies be a massive segment in 2024?
What are Ed and Jamin's biggest tips to founders considering selling their company in 2024?
3. When Will IPOs Come Back:
What will be the catalyst to the opening of the IPO markets?
Will Stripe and Databricks go public in 2024? What others should we expect?
What are the three requirements for a company to go public in 2024?
4. Firesales: Investors Need Cashback:
Why does Ed believe now is the time in the cycle where late-stage investors want cash back to distribute back to their LPs or to recycle?
What should we expect to see in terms of acqui-hires and firesales?
What are the different incentives when comparing founders vs early stage VCs vs late stage VCs when it comes to acquisitions?
Ed Sim is one of the best seed round investors in venture as the Founder and Managing Partner @ Boldstart, Ed focuses specifically on developer, infra and SaaS at pre-seed and seed round. Over the last decade, Ed has backed some of the best including Snyk, BigID, Kustomer, Front and Superhuman.
In Today's Episode on Seed Rounds We Discuss:
The Three Types of Seed Round:
What are the three different types of seed round today?
Has seed ever been this competitive?
Will seed be unimpacted by the macro decline we are seeing?
Why are growth and multi-stage funds being more active than ever in seed?
2. Too Much Cash Will Kill You!
Why does Ed believe that too much capital can kill companies at the seed round?
Why does Ed believe that the best founders are not always optimising for the highest price?
What are the single biggest negatives of taking a high price at the seed round?
What advice does Ed have for founders who have large offers from multi-stage funds at seed?
3. Is Growth Dead?
Why does Ed disagree and suggest that growth is not dead?
What do multi-stage and growth funds now what to see that they did not before?
How will the growth market evolve over the next 12-18 months?
4. IPOs, AI and M&A:
What will cause the IPO windows to crack open again?
Why does Ed believe that many investing in AI are simply giving money to Nvidia?
Does Ed agree that 95% of the cash going into AI from venture today will go to zero?
Will we see more or less M&A in the next 12 months?
How did Ed evaluate the Loom acquisition by Atlassian?
Ed Sim is the Founder & General Partner @ Boldstart Ventures, one of the leading players in early stage SaaS investing. Their MO, to be a first check VC for enterprise founders and they have backed the likes of GoToMeeting (acq by Citrix), LivePerson (IPO, NASDAQ), Divide (acq by Google), Kustomer, Snyk and BigID just to name a few. Ed is also a cofounder of MState, a growth lab for enterprise blockchain in partnership with IBM. Ed is also a board director/observer of Kustomer, Hypr Biometric, Snyk, BigID, Fortress IQ, Wallaroo Labs and Manifold. If that wasn't enough, Ed is also the writer behind BeyondVC, a must read blog in the world of SaaS.
In Today's Episode You Will Learn:
How Ed made his way into the world of VC from one very meaningful high school lecture that changed his life and career path?
What does Ed mean when he says "founders should not sell their product to enterprise in the early days". Starting from the ground up, what can founders do to begin that relationship building process with enterprise buyers and CIOs? What can a startup do to establish that trust in the mind of large buyers? How much of a role does VC backing provide in comforting enterprise buyers?
What would Ed advise founders contemplating the debate of going SMB up to enterprise or enterprise to SMB? What role should product play in this decision-making process? What are the leading indicators in testing the product that founders should observe for and guide their direction? Where does Ed most often see founders make mistakes here?
How does Ed think about discounting? Would he agree with a previous guest that "discounting is now table stakes"? Rather than the financial element, what does Ed believe the founder should really be looking to get from the buyer in terms of commitment? How does Ed approach and assess pilots? To what extent should they be free or paid? What can be done to set the benchmarks for success and ensure closing?
Ed's 60 Second SaaStr
What does Ed know now that he wishes he had known in the beginning?
Quality or quantity of logos?
What would Ed most like to change in the world of SaaS?
Read the full transcript on our blog.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Jason Lemkin
Harry Stebbings
SaaStr
Ed Sim
Ed Sim, Founding Partner @ Boldstart Ventures, Ed truly has had the most astonishing career in early stage SaaS having led first round investments in todays market leaders, LivePerson (now on Nasdaq) and GoToMeeting (acquired by Citrix). Over the 19 years in early stage SaaS he has also helped a number of entrepreneurs scale from seed to market leader with his portfolio companies being acquired by the likes of Google, Linkedin and Salesforce, and I would like to say that all the data and information presented in today's show is provided by the kind folks at Mattermark, check then out at www.mattermark.com
In Today's Episode You Will Learn:
1.) How Ed made his way into the wonderful world of venture?
2.) Why did Ed start a seed stage SaaS fund? Where did he see the market opportunity?How was the fundraising process for Ed? Were there any surprises?
3.) How does Ed view the current seed stage funding environment, is there too much money chasing too few deals?
4.) Ed backed cloud companies in 2000. What is different from then vs today’s saas companies?
5.) How do you value early stage SaaS startups, when there are often very few clear metrics at this stage?
6.) What makes a great enterprise founder at seed stage?
7.) How has the seed stage SaaS environment changed over the 19 years of Ed's career?
Items Mentioned In Today's Episode:
Ed's Fave Blog or Newsletter: Jason Calacanis: LaunchTicker
Ed's Fave iPhone App: Slack
As always you can follow Harry, The Twenty Minute VC and Ed on Twitter here!
If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here!
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