1Mby1M Virtual Accelerator Investor Forum: With Ken Elefant, Partner and Co-Founder at Sorenson Ventures 2021 (Part 1)

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Ken Elefant, Partner and Co-founder at Sorenson Ventures, talks about trends and his investment thesis.

Sramana Mitra: Tell us a bit about your funds. I know you have been working with your fund one and you are in the middle of raising your fund two. Fund one was about $100 million, right?

Ken Elefant: That’s right. We have two funds at Sorenson Ventures. Sorenson Ventures is our early-stage fund and Sorenson Capital is our growth fund. At Sorenson Ventures, we have a $110 million fund. We are focused on seed and Series A investments.

We are typically investing anywhere between $1 million and $5 million in startups. Then we do follow-on in those companies. Sorenson Capital is our growth fund. We invest in companies that have over $5 million in ARR. The typical check size for Sorenson Capital is anywhere between $10 million and $40 million. 

Sramana Mitra: Let’s focus on your categories of investments. Where are you today? What is the thinking? What have you been investing in? What is your thinking moving forward?

Ken Elefant: At Sorenson Ventures and Sorenson Capital, we are focused on security and enterprise software investments. You can see that most of our investment in enterprise software has a lot of property associated with it.

The rationale for this is that the movement to the cloud is real, and as such the complete software stack is changing. This includes everything from the database level up to the analytics. The entire software stack is changing.

The same thing is true for the security stack because the perimeter doesn’t exist anymore. Any enterprise whether it’s small or large is connecting to their partners through the cloud. That creates huge opportunities for startups. That is where we are focused. 

Sramana Mitra: Let’s start by talking about some of the companies that you have invested in and are particularly excited about. Give us a flavor of what you have been up to. As you are doing that, tell us what did they have when you encountered these companies first? What was it about them that caught your attention? 

Ken Elefant: I’ll give you a couple of examples. We are investors of Fastly. They provide fast internet access from the edge. The rationale for this is what I talked about before in terms of the trends. Enterprises are leveraging the cloud more. They are leveraging more content.

The existing systems that are out there are not built for the new age. We were attracted to Fastly initially because of the technology and then we saw how interesting it was from the customer’s point of view and how it was being implemented. Fastly ultimately went public and it’s still on a great roll.

On the early stage side, I’ll mention a company called Cycognito. We led the seed round. Cycognito is a security company. One of my theses in security is that it is difficult to choose Chief Security Officers today. You need a new route into enterprises. One route is through open source. Another route might be through premium and DevOps. The way Cycognito does it is through agent-less security. It means that an enterprise doesn’t need to download any software on their laptops and servers internally. I thought that it was interesting.

This was a thesis that I had for about two years before we invested in them. The reason that I was attracted to Cycognito was because they were the first company that had the fidelity of data that could be interesting for enterprises. They pound the outside of an enterprise just like an attacker would and see the vulnerabilities that are there.

What is unique about them is that they are an attack validation technology where they can see how important each vulnerability is. If you are Equifax, you would have seen that there is an Apache stress web server issue on the outside and that is the first thing that you need to solve. 

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Ken Elefant, Partner and Co-Founder at Sorenson Ventures 2021
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