1Mby1M Virtual Accelerator Investor Forum: With Evangelos Simoudis of Synapse Partners (Part 3)

Sramana Mitra: What kind of check sizes are we talking about?

Evangelos Simoudis: Low hundreds to maybe half a million.

Sramana Mitra: Let’s talk a little bit more about the portfolio companies. Let’s actually talk about the two that you talked about that have exited already. Give us a window into what kind of company they were. What attracted you to them? What stage did they come to you at? I like to do this just to understand how the investors think about their investments. It provides a lot of insight to see what they have invested in and why.

Evangelos Simoudis: Because we look at early-stage companies, what we consider is what is the problem being solved and how relevant is this problem to one or more themes of our investment thesis. As I said, we formulate this investment thesis both by interacting deeply with our corporate partners as well as with our own advisory board.

The thing that we look at is the type of intellectual property that the company is developing in order to address the problem that they’re solving. Both members of my advisory board as well as myself get very involved in trying to understand what is the hard IP that is being developed for the problem that they’re solving.

Both members of my advisory board as well as myself get very involved in trying to understand what is the hard IP that is being developed. The hard IP identifies how to design the structure in order to provide safety in the vehicles. For very hard problems, it’s almost like dealing with fractal geometry.

You asked about the companies that already exited. This one company was developing a reporting tool that was using artificial intelligence and knowledge about queries that can be asked in a data warehouse to automatically create the right query and optimize it. That means that novice business analysts can create really sophisticated queries without really understanding what is going on behind it.

The second company was a security analytics company. We invested in them because of what we heard from three or four telco corporate partners. They said that they wanted a very flexible way of looking through the security alerts that they’re getting into their corporate network. If you can imagine, a global telco may be getting millions of alerts per day. They wanted a way to do that both effectively and relatively inexpensively.

In order to capture the data to analyse, you spend a lot on storage. This company had developed this solution and they had already deployed it with three customers. We’ve introduced them to additional customers. Early this year, they were acquired by FireEye. In both of those cases, what attracted us was the IP that was being developed. We got convinced that the team that they had had the right characteristics. They were hungry entrepreneurs.

Sramana Mitra: Did they have a paid pilot already underway?

Evangelos Simoudis: They did. In the first case, they had two customers for their solution. In the second cases, they had around four customers. We could see that in both cases, the IP is working.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Evangelos Simoudis of Synapse Partners
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