Javelin Partners, a Silicon Valley venture firm of three entrepreneurial partners Jed Katz, Noah Doyle, and Alex Gurevich, have not only impressive backgrounds but also a remarkable roster of start-ups. At a sit down with Jed, he was able to share why his team works so well with young start-ups, and what tech venture is looking for in such a fast paced funding environment.
Background
Jed shares a unique background with his investments, he too has been part of a succession of startups. His first startup was Rent Net, which dominated the rental market in dot com boom. His business partner was a UCLA law student and as he as a recent Berkley MBA grad himself, they both had the problem of having to move long distance in 1996. With no access to digital apartment guides that shared floor plans and enough details to help them make informed choices to move, the two learned how to code themselves learned html basics, and found a team who could create upstart success RentNet.
He understood first to market, and over the course of a few years, they had every apartment building who had a marketing budget as well as movers on their site. They were eventually bought by Sendit, but were given the opportunity and experience to continue building the company. His reward was selling it to Homestore for just under a billion (now Move.com). Building RentNet, Jed is an exceptional operational coach, and has incredible finance instincts as he understands the finer details of negotiating smaller and billion dollar deals.
After selling Rent Net, Jed knew he wanted to try something different. “I always wanted to create a product, and I met an entrepreneur who built a device in his garage which used accelerometers to look at everything in the sky.” This opportunity was SkyScout, a personal planetarium in which a user can find celestial objects with the click of a button. He then built a product, manufactured it, registered and litigated patents, and learned how to license, broadening his start-up experience.
At this point he started to do some Angel investing on his own. He soon met the DFJ Gotham partners in New York and spent the next 4 years learning the Venture Capital trade, joining boards, and learning what made a start-up successful. In 2009 had the opportunity to start Javelin in San Francisco with partners Noah Doyle and Alex Gurevich.
Both Noah and Alex also had incredible early stage start-up experience creating a well-rounded team. Noah was the one of the founders of Mypoints.com, an internet rewards program which he took public, and Keyhole which he sold to Google, and became Google Earth. Alex’s background was as the first employee at Ooma, as well as Say-Hey-Hey.com, the web’s first internet video dating site. The team has built a hands on, entrepreneur friendly firm.
With six years under their belt, the team is now on their firm’s third fund. In total they manage $335 million. They like to focus on Series A – $2.5-$4 million, and they like to be the first one in. According to Jed, the first one is ,”Taking a good idea and proving that it can fail. Seed would be beta testing, finishing up prototype and getting initial customer feedback and traction with a small staff.”
What They Look For
When it comes to pitch decks, Javelin Partners are looking for pitch decks with 20 slides or less that tell a compelling story. They’re looking for organization, initial customer feedback, virality, sales cycle, and product demos. They also want to see that the company will be scalable and a staffing plan. The last piece that’s important is the strategic value about the revenue stream that makes the company unique enough to be purchased at the right moment.
For Javelin, they’re looking for companies withe a bottom’s up analysis of a truly addressable market over a billion. They want some signal it can get to $100+million revenue is a reasonable amount of time, 5-7 years is their benchmark of what’s “reasonable.”
When it comes to the C-suite, they’re looking for leaders with humility. Every team is going to need help with something, and working with a VC is a partnership. This includes brainstorming all the time, recruiting help, lots of introductions to their network, helping with people issues, having empathy for what they’re going to with a start-up. They don’t just show up, they take phone calls and have an ongoing productive relationship, not just board meetings.
Javelin Partners Success Stories
Using this strategy, Javelin has invested in some pretty remarkable companies. One, for instance, is Thumbtack, an incredible marketplace matching professionals with customers looking to get projects done. Jed feels Thumbtack’s success formula is critical to their founders’ skill set, as they are very data oriented. They pay attention to everything on their site, understand their KPI’s and page flows, are aware of all the buttons and levers to adjust things along the way, and are building for the marketplace. They are organized and analytical and know their product inside and out to make adjustments. They are also long-term oriented and see the big picture. The team is looking to build something significant in their space.
Correlated Magnetics, an Alabama based company, is another Javelin Partners success story who figured out how change magnet technology. They have over 100 patents based on their technology. They are using magnets in a way that no one has before, they can make magnets only attract when they are perfectly aligned, and suspend just a few millimeters from each other. There are hundreds of use cases, making this investment a combination of a team and product balance, which is important to investors, especially Javelin.
Another significant early stage find for Javelin that showcases what’s important when they’re investing is Famo.us. They are new development platform that will change the UI of the web. What’s unique about Famo.us is not just their platform, but the CEO is an amazing visionary who is able to tell the story in a way that’s compelling and excited the team. He’s building game changing technology.