1Mby1M Virtual Accelerator Investor Forum: With Yanai Oron of Vertex Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Yanai Oron of Vertex Ventures was recorded in March 2018.

Yanai Oron, General Partner at Vertex Ventures, took us through his firm’s investment focus on deep technology ventures in Israel. The discussion includes an excellent window into how VC firms have different arithmetic depending on their size and structure.

Sramana Mitra: Tell us a bit about Vertex. Tell us about yourself. Let’s introduce you to our audience and also let’s get to know you.

Yanai Oron: I grew up in Israel. I was an electrical engineer and worked at Intel for a couple of years. When I wanted to switch to the business world, I wanted to live in New York, so I went to study at NYU. I did my MBA there. After that, I worked for a mid-stage startup doing business development. During that time, I had been in New York for about seven years. Around 2010, I decided to go back to Israel. This is when I started to go into venture. I started as a small angel investor.

In hindsight, they were very good years to be an angel investor. Not a lot wanted to invest but probably the best startups were founded then. I had the nice fortune to invest in some interesting startups. About three to four years later, I joined Vertex as a Partner. Vertex is a 20-year-old fund based in Israel. We are an early-stage fund managing around $150 million each cycle.

We invest in early stage which is a general word for anywhere between large seeds up to small B rounds. The unique thing about Vertex is the fact that we are a network of funds in major hubs throughout the world. There’s one in Silicon Valley, one in China, on in Singapore. We have presence in most places of innovation throughout the world.

Sramana Mitra: When you say you like to invest in seed, can you define what is a reasonable proof point that you are looking for before you’re willing to put in money into a company?

Yanai Oron: We don’t do only seed. Our typical A round in Israel is a seed round in the Valley. Our sweet spot is probably A round but we see ourselves going upstream and doing earlier rounds not only to get significant percentage in the company before it gets very expensive, but also because we would not do a small seed.

If a company raises half a million to a million, that’s probably not where we are best at. We leave that to angels or actual seed funds, which in Israel usually have a size of $30 million to $70 million. We would participate in seed. That could be just an idea if we really know the founder or believe that they are really strong founders. We would be very comfortable investing in the presentation phase and where there is deep technology to be developed.

It’s not something you can develop in three to six months and get an MVP out. It’s usually something that takes a year depending on the kind of technology. Then we would make sure that the company has, at least, $2 million to $3 million. Sometimes we participate in $6 million to $9 million for the company to develop the product and get some initial traction to be ready for the next round. In those cases, we usually partner with other funds or angels.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Yanai Oron of Vertex Ventures
1 2 3 4 5