Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon (Part 6)

Jeff Solomon: I talked to some other mentors and people I’ve met over the years and came to the conclusion that it was better for me to leave the day-to-day operations. I probably undersold my value to our Board and to our investors. The investors didn’t appreciate the scrappy founder guy like they do now.

Sramana Mitra: The general philosophy and appreciation of first-time founders has gone up tremendously. At the time that you’re describing, I don’t think we were quite there yet.

Jeff Solomon: At that time, they didn’t see me as critical. I was making a good salary. I probably could have made more money continuing to sell. There wasn’t really an opportunity to get more stocks at that time. For me to leave and have the company go through an exit, I’m going to make the same amount of money. I could then apply my resources elsewhere, which I did. It turned out to be a great decision. The exit happened in 2017.

Sramana Mitra: Who bought Velocify?

Jeff Solomon: We ended up selling it to a company that was in the mortgage space. They were the most aligned buyer. Our multiple was lower going for a verticalized sale.

Sramana Mitra: Salesforce also has changed. Salesforce has become more verticalized. Vlocity, for instance, is the beginning of their vertical CRM strategy. Their vertical CRM strategy started with Veeva. Veeva has been enormously successful. They didn’t get to buy Veeva.

Jeff Solomon: That’s true. At that time, it was less so. It was still a good exit because our cap table was pretty clean. We only raised those two rounds.

Sramana Mitra: How much was the revenue in 2017?

Jeff Solomon: Maybe low 30’s.

Sramana Mitra: You got 5x?

Jeff Solomon: We sold it for $130 million.

Sramana Mitra: That’s still pretty good. The capital infusion was very modest.

Jeff Solomon: It was overall a pretty clean cap table. Everybody did well. It was a nice exit.

Sramana Mitra: What did you do after you left?

Jeff Solomon: I started Amplify which is an accelerator here in LA. We just closed our 5th fund. It was a lot of fun. I’ve never been on the other side of investing. I met a guy in LA who still runs Amplify. He is just one of those connector people. He was really good at putting the fund together. He was not great operationally. There were a lot of operational elements related to building this accelerator that was a model that YCombinator had proven but was still early. We had to figure some stuff out.

Sramana Mitra: How much money do you offer?

Jeff Solomon: In the first fund, we did $25,000. In the current fund, we’re close to $200,000.

Sramana Mitra: You also moved with the YCombinator model. YCombinator also started with $25,000 in the beginning.

Jeff Solomon: There’s a follow-on now. So we’ll end up investing somewhere between $350,000 and $750,000 into any company that continues.

Sramana Mitra: Do you have a sweet spot of what you like to invest in?

Jeff Solomon: We certainly like SaaS. We like the intersection of entertainment and tech because of the LA connections that we had. That was a big part of the initial thesis. It didn’t pan out as well as we had hoped. It’s become a little wider. Not a lot of consumer stuff. Mostly B2B. It’s fairly wide still.

Sramana Mitra: Wonderful story. It was nice to meet you.

This segment is part 6 in the series : Non-Technical Founder Scaling SaaS Venture to Exit: Velocify Founder Jeff Solomon
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