1Mby1M Virtual Accelerator Investor Forum: With Mark Hasebroock at Dundee Venture Capital (Part 2)

Sramana Mitra: That philosophy of “operators do not make good investors” does not exist in Silicon Valley. In Silicon Valley, operators are highly-valued.

Mark Hasebroock: It’s really interesting. I hear it a lot. What you have is a mindset in the Midwest because of insurance, private equity, and hedge funds. They have a quantitative analysis approach to invest in.

Sramana Mitra: Early-stage venture capital is not about quantitative at all.

Mark Hasebroock: Not at all. There’s a big education that’s going underway- just getting money off the sidelines and teaching people what the asset class of early-stage venture capital means.

Sramana Mitra: What about sectors? What kinds of businesses do you like to invest in? B2B? B2C? Any particular sector preference?

Mark Hasebroock: Not really because what we see from Dallas, Minneapolis, Denver to Pittsburgh is just a variety of companies. We’re pretty agnostic when it comes to that. Most of us have some good B2C experience. That doesn’t mean that’s our sole focus. It’s a variety of things. We’ve made about 30 investments and they’re all over.

Sramana Mitra: When you say you like to put in $250,000 to $750,000 in a seed round, what is it that you’re looking to see in terms of validation before you’re willing to write that check?

Mark Hasebroock: We’ve done some pre-product, pre-revenue companies. What we’ve seen is a team. We’ve seen a big market. We’ve seen that maybe this is their second or third startup. We’re as early as that to companies that have a couple million dollars in annual run rate. Normally, do they have a handful of customers? Are those customers repeating? Is it truly a large enough market to put money into because this is a 10-year partnership?

Sramana Mitra: Tell me a bit about the 30 odd companies that you’ve invested in. Give us something that gives us a view into how you look at companies. Choose a few case studies and walk us through your thinking in why you chose to invest in those.

Mark Hasebroock: There’s one that just got announced as an exit last week called AddStructure based in Chicago. The two founders were very smart, very determined to solve a problem that they had seen exist personally. We love those. It basically was a voice technology. They were actually doing just fine and got an offer to acquire the business.

These are guys that I would back up again because they have unusual vision and are very disciplined and methodical when it comes to operating the company, but realized that there’s a bucking bronco every single day to running a company. When we see that they don’t get flustered over that, we like that.

Sramana Mitra: What is the business?

Mark Hasebroock: It was a voice technology. Think about trying to purchase a television that would go over the fireplace. What you typically have to do is type in, “42-inch television.” You get television cables and all sort of stuff as a result.

Theirs is just a voice technology where you say, “I’m looking for a tv for my kitchen. It should be 42 inches but it could be 60 inches. I want the thinnest one possible.” The result that comes up synthesizes all that down to the things that truly match. It’s more just conversational commerce. It’s something that is going to be a lot more common.

Sramana Mitra: How do they go to market? Where would I encounter this technology?

Mark Hasebroock: Target or a Best Buy. Target was a customer, and they were testing it in the electronics department. It was working really nice. It’s a great product.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Mark Hasebroock at Dundee Venture Capital
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