1Mby1M Virtual Accelerator Investor Forum: With Warren Weiss, Managing Partner at WestWave Capital (Part 1)

Warren Weiss is Managing Partner at WestWave Capital. We had a terrific discussion on small exits as seen by a seasoned investor.

Sramana Mitra: Warren is very well-known in the industry as “Bunny Weiss”. That’s his nickname. I’ve known him for a very long time. He was a General Partner at Foundation Capital for many years. Our families go back a long time. My husband and Bunny worked together under Steve Jobs. More recently, Bunny has started his own fund. He has also recently invested in one of the 1Mby1M companies.

Warren Weiss: I have. I wanted to thank you for the opportunity to be introduced to Fullcast.io, which is in the enterprise sales planning space. We’re very excited to be an investor; we appreciate the referral that you gave us. 

Sramana Mitra: I thought you would be the perfect investor for that company because of your background in sales management. One of the issues that we faced while funding that company was that everybody was asking what is the AI angle. This is not an AI company; this is a workflow automation company. Let’s start with a little bit of your thinking about WestWave Capital. It’s a new project that you’re doing. What is the investment thesis? What’s the fund size? 

Warren Weiss: WestWave Capital’s first fund was in 2018. It was a $33-million fund. We’re in the micro-VC asset class. The focus is enterprise-only SaaS applications, security cloud infrastructure, and edge computing. We have some thesis around artificial intelligence and what it should be used for around engineering productivity. We’ve invested in 41 companies. We’ve had seven exits. We’re raising our fund two which I can’t talk about publicly. It’ll be a little big larger. 

Sramana Mitra: In fund one, what were the check sizes that you’ve been writing?

Warren Weiss: We started with $300,000 checks. We’re now up to $500,000. Our next fund will be writing checks up to $2 million as we’ll be taking a little bit more ownership. The first fund was really agnostic about ownership. We wanted to get our brand out there and work with great firms. We’re very strategic in how we think about who we do our seed, pre-seed, and Series A projects with. The data’s overwhelming. Who you invest in really matters. 

Sramana Mitra: What do you like to see before you write a $300,000 to $500,000 check? What level of validation are you looking to see especially in an enterprise play? What stage are we talking about?

Warren Weiss: It’s situation-dependent. About 40% of our projects had some customer revenue. I wouldn’t confuse that with them having product-market fit. We’ve also done many projects that have no revenue and don’t’ even have a product yet. Our thesis is in the micro-VC asset class. The initial rounds are between $1 million and $3 million. We partner with angels and other micro-VC’s. Sometimes, with Series A firms. Lately, it’s unusual that that will happen.

Sramana Mitra: The micro-VC asset class has completely segmented.

Warren Weiss: All the other alphabet groups of funding have moved up quite a bit in terms of the size. 

Sramana Mitra: And geography? Are you investing all over the United States?

Warren Weiss: About 70% of our projects are here in the Valley. They’re highly-distributed teams these days. We have a couple of projects in Europe and not in Asia. That would be harder for us to do. The requirement for us, if it’s outside of the US, is they’re going to move to the US. That we have a venture partner that’s local on the ground to assist the firm.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Warren Weiss, Managing Partner at WestWave Capital
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