1Mby1M Virtual Accelerator Investor Forum: With Sumner Douglas of BoomStartup (Part 3)

Sramana Mitra: Would you want to do another case study of companies that you’ve invested in and that you particularly think highly of?

Sumner Douglas: I’ll do one that I got involved in. A couple of years ago, I made the cardinal sin as the Managing Director and left to join one of our portfolio companies called Vutiliti. They create a device that enables you to hack the smart meter in infrastructure In smart cities and in residential areas and see real-time consumption of electricity, water, and natural gas. We can see that in a much more granular functionality back to the power companies or the utility companies as well as the end residence.

The average use of something like this enables us to reduce all three different types of utilities by around 20%. This is solving very large problems like water consumption, electrical consumption, and pollution. All of these different components are tied together. This is a company shooting for the moon and going after some very large problems.

They had created some technology already when they came into the cohort proving that they could attack the market and deploy these hardware devices that enable us to see, at scale, real-time consumption of all different types of utilities. This is a very interesting problem. I’ve been passionate about conservation and renewable technologies for quite some time and that ties into those perfectly.

It’s the synthesis of what a lot of investors look for, a really big market where it’s going to be able to touch almost every person in that country and solve significant problems that are also problems in our current society today as well. Those types of companies are always very interesting to us simply because they’re on par with some of those Kleiner Perkins and Sequoia models.

How many people is it going to be able to touch? How big is that market? How prevalent is that problem? Nobody really loves paying utility bills. If they can reduce them or have higher levels of insight into them, this is a product that could change a lot of the consumption patterns in the domestic US.

Sramana Mitra: I’m going to switch the gear a little bit and ask you about your philosophy around what kind of companies you are looking to invest in. Do you necessarily require that companies have these billion dollar TAM whenever they become a unicorn at some point, or are you comfortable with investing in companies that have more niche-y spins and are woven to build robust companies? But they need to be built in a more capital efficient way and can also make money off smaller exits.

Sumner Douglas: We’re comfortable with both of those different companies. Unicorn-based markets are really interesting but those vary in between. As for the deal flow, they are same types of deals. You only see a few of those deals on an annual basis that really have the legs to get up and go. We place a lot of investments in the smaller seed stage of niche markets. There’s a great opportunity to go and attack some of those markets, build up a company quickly, and exit that company within a three to seven-year period. We like those plays a lot.

We’ve done quite a few of those different plays and feel those plays are really good for us. As an early phase seed investor with an accelerator and everything like that, we love to see early exits. We feel a lot of those niche markets take a little bit less time to mature a company and see a potential exit. My partner and CEO Robb Kunz really likes the niche plan. He’s a huge fan of that. We had quite a few wins for those different cycles.

Sramana Mitra: Great! You may have read my “Bootstrapping to Exit” piece recently on LinkedIn?

Sumner Douglas: I did.

Sramana Mitra: Okay. That gives me a good idea about what kind of things we might be able to work on together. Do you have anything else that you want to add as messages to entrepreneurs out there who may be interested in working with you?

Sumner Douglas: We love to see applications. I love it when entrepreneurs reach out directly to me. Unlike a lot of the venture capitalist community, I feel entrepreneurs in the accelerator space are much different. People walk into my office all the time. If I can and I’m not in the middle of a meeting, I make time for them to come and pitch me on a regular basis.

We help to fuel a lot of these seed in early stage companies out there. We’d love to see applications from anyone who is interested in applying. With the great benefits of our program, you can stay right where you are. We’ll also key you into the ecosystem on the West Coast and get you a lot of different introductions to super high-quality mentors as well as a lot of funding mechanisms which a lot of entrepreneurs are looking for.

Sramana Mitra: Very good! It was very nice talking to you.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sumner Douglas of BoomStartup
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