1Mby1M Virtual Accelerator Investor Forum: With Cameron Kramlich, General Partner of Angelneers (Part 3)

Sramana Mitra: You said you invest mostly in enterprise software. Can you elaborate more about what is your enterprise software investment thesis? Let’s talk about your enterprise software strategy.

Cameron Kramlich: Our core strategy has to do with the shape of our team. Our deepest background is in software. Software is quite complicated. You have everything from platform plays to applications. When you look at our team, we have a whole bunch of experts that are part of companies of all sizes. We’ll look at a company that needs a good CMO. We’ll take a public company CMO who’s looking for a new project for a couple of months. We’ll put him in that job. We get a company that needs a CTO or an engineer.

Oftentimes when we look at startups, we’ll find a brilliant core team with two or three developers. None of them are people managers. We’ll put them together with somebody who’s a great developer and a great people manager. Our core strategy is to build better teams. By having better teams, it’s more likely they’ll be successful. We align our interests with those entrepreneurs.

Sramana Mitra: So you don’t have any sector-specific investment thesis? Within all enterprises, you do all blends?

Cameron Kramlich: We have portfolio companies in a bunch of enterprise software verticals. Our focus is on team and opportunities. As a result, we don’t have a specific vertical focus because we don’t think that’s where we can add unique value. We’re focused on building great teams.

Sramana Mitra: You said the team is your core USP. How do you manage this kind of recruitment? Do you work with recruiters? Do you have your own recruiting partner?

Cameron Kramlich: We’re angels and engineers. We’re really angels and product builders. As part of our team, we’ve built companies that have had a hundred billion dollar exits. We have this deep network in Silicon Valley that includes everybody from public company CEOs to interns. We know these people personally. Because we know them personally, we get to know entrepreneurs and figure out their needs. Who of our friends can we add to their team?

Is it one specific way that we find people? No. I’ve been in the industry for almost a quarter of a century. I’m one of the youngest in the team. I know all these people. Our role is in being connectors and helping put together these great teams. It’s not one strategy. We’re open to talking to recruiters. Every team is unique and every person is unique.

Sramana Mitra: Are you looking for unicorns?

Cameron Kramlich: It goes back to our strategy. We like to be super early where we help companies make critical hires. We want every startup that we invest in to have a billion-dollar exit. Do we want the company to have a billion-dollar valuation on day one, no.

Sramana Mitra: That’s not my question. Are you looking to invest in early-stage companies that have the potential to become unicorns? I’ll qualify that question. There is a class of investors that are coming together who acknowledge the fact that there are a lot of exits that happen that are not unicorn exits, but there is money to be made.

Are you squarely focused on the unicorn companies or are you also looking at these smaller TAMs but real problems where people are willing to spend money and there are potential exits for that as well?

Cameron Kramlich: There is this myth in Silicon Valley that every company IPOs or fails. Do we want to create a whole flock of unicorns? Of course, we do. But our focus is on building great teams and making money for limited partners. We can do that with half a billion or a hundred million exits. We are looking at companies that might not, potentially, have a billion-dollar exit. If you get below a hundred million exit, it’s hard for us to get over our own cost to make it worth our time.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Cameron Kramlich, General Partner of Angelneers
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