1Mby1M Virtual Accelerator Investor Forum: With Corey Schmid of Seven Peaks Ventures (Part 2)

Sramana Mitra: You emphasized geography greatly. Pacific Northwest is the sweet spot of the fund. You don’t invest outside?

Corey Schmid: We do. We call it the Mountain West. One of our newest deals is out of Phoenix. They’re in the no-password security space. Majority of our deals are in Oregon and Seattle. We have five or six investments in the Bay Area. We have a deep network there based on our syndicate partners and investors that come on in later rounds.

We have two in Boulder. We’re seeing talent in those regions. What’s lagging is sophisticated capital to help grow those businesses. The Bay Area is chock full of successful funds. We’re identifying opportunities primarily outside of the Bay Area.

Sramana Mitra: Let’s talk a little bit about what you’re seeing in your deal flow in 2017. What’s exciting? What’s interesting? What are the trends that you are seeing?

Corey Schmid: We’re four and a half or so years in from when we launched our 2013 fund. We’re seeing a ton of great deals across the regions that we’re looking at. As I mentioned, my sweet spot is digital health. It’s a great time to explore opportunities to reduce cost, improve clinical care, and really compress the work flow in healthcare. We’re looking at some interesting opportunities in that space.

We have a deep operational expertise as well as technology, so convergence of machine learning in a sector that we’re deep in is something that’s of interest to us. We do have investments in two companies. Enlitic is deep machine learning for radiology. Another is Cricket Health which is looking to change the model for how kidney failure patients can receive care at home, which can improve quality of life and reduce cost dramatically.

Sramana Mitra: That’s actually very interesting. What does the company enable?

Corey Schmid: It’s founded by a dynamic co-founding team. Arvin came out of LinkedIn who opened up the Asian market for LinkedIn. They’ve taken this concept of providing educational tools to these patients. A lot of time, the patients don’t know what options they have. They don’t know that they can get dialysis at home.

As you receive and deliver that care at home, this enables services to deliver the clinical care and feedback to allow them to be in home. They’ve had the opportunity to work with the American Kidney Foundation who’ve sent patients their way. If patients are educated and given the right options, they’ve gone from one in seven choosing in home to eight out of ten. It dramatically changed the paradigm for how these patients can get care. It’s an old industry that needed some disruption.

We see this in enterprise. There’s a company out of Portland called Opal. Opal is doing this with brand management for large companies where they’re taking the time to create all of your campaigns and collateral through this beautiful platform that allows for sharing and collaboration. They’re able to save 8 to 10 hours a week of work per marketer.

Sramana Mitra: These companies that you’re talking about, what stage did you encounter them?

Corey Schmid: They were early. Dino and I met the founder at an event. The numbers were phenomenal. They had worked extremely hard to build a beautiful product and go out and land top customers. They bootstrapped it and funded it with angels. Then, they opened it up to VCs.

Sramana Mitra: What kind of metrics did they come to you with?

Corey Schmid: They probably had around 10 big brand customers. Revenue from those were five to six figure annual contracts. That shows that you’ve built something that is solving a real unmet need. You immediately know when you see a product that has nailed that user experience.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Corey Schmid of Seven Peaks Ventures
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