1Mby1M Virtual Accelerator Investor Forum: With Gary Little of Canvas Ventures (Part 3)

Sramana Mitra: What about geography?

Gary Little: We just have three partners now. Our target is never to have more than five partners. Since we’re early, our main task when we get that technical team is to help them recruit their Head of Sales, Head of Marketing. At some point, maybe Head of Product and Head of Engineering. The last investment I made, we recruited a CEO, CRO, CMO, CFO, VP of Product Marketing. That’s the job on the first year – building up the management team so it can scale to $10 million and beyond.

To do all that hiring, it doesn’t make sense for us to make investments overseas. Our primary focus is in Silicon Valley where we can use our network. Having said that, there are people we trust that spend a day in the week with the company. We have that network in New York. We have several investments in New York City but today, we’re primarily in Bay Area.

Sramana Mitra: You have a question from the audience which is probably a reasonable question to elaborate which is, “Please define conviction investor versus traditional investor.”

Gary Little: That’s a term that we’ve coined internally. We’re a sizeable venture firm with a $300 million fund and nearly half a billion under management, but we’re also not a billion-dollar fund trying to put money to work in all sectors. Like any company that we would advise, focus is really important.

For us to be successful, we try to pick some sectors and focus on that, and get knowledgeable about those sectors and hopefully know more about their sectors and have a better network than the generalist. We call that thesis investment. We’ve made the largest number of our investments in what we call, new enterprise. That’s B2B. Fintech, digital health, and marketplaces.

Current trend across all those has been use of AI to enable opportunities. In those areas, we spend a lot of time. We try to find a company that we think has the best opportunity, which is usually the core team with the value proposition that we can build around. For that one, we’re going to make an outsized investment. What we mean by conviction is we’re not hedging our bets by playing with three different companies. We try to pick the winner and put all our chips on that.

Sramana Mitra: What are some of the highlights of your portfolio that are worth discussing as case in points of your investment thesis?

Gary Little: The easiest thing is to say what we just did. I can tell you about my last two investments and the reason why. One of the investments was a company called Kinetita. Kinetita is a relational database that can basically do SQL queries natively on streamed data that’s coming in at high velocity. If you can do SQL, you can then do things like have Tableau run natively on this database as an example.

Why did we make this investment? We were looking for opportunities where all this data that the world is generating is used. Half of the world’s data has been generated in the last two years. That’s just increasing at a high rate. We know from Facebook and Google that those companies that have the most data can make use of the best data. Data is coming in from IoT devices, sensors, and other computers from the internet.

Companies are just awash of data but they have a really hard time processing it. We were looking for both what new opportunities are enabled by data and also what breaks. Certainly relational database breaks when you try to flood a lot of data in and try to query it at high speeds. What Kinetita did is a relational database that works on GPU chips. These are the chips that run on gaming machines. Instead of having a duo core from Intel, these chips have 2,500 to 4,000 processors per chip.

Kinetita had customers that were running 500 chips in parallel and 700,000 processing elements running simultaneously on billions of rows. They were landing million dollar annual contracts. There’s GPU that’s going to take advantage of Moore’s Law to keep up with the flood of data. Oracle can’t rewrite their software to do this stuff. This company has a head start. We hopped in and co-led the deal with a large investment. We had conviction. They had conviction.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Gary Little of Canvas Ventures
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