1Mby1M Virtual Accelerator Investor Forum: With Yanev Suissa, Managing Partner and Founder at SineWave Ventures (Part 2)

Sramana Mitra: When something fits your investment thesis, what do you want to see in the company when you’re doing a seed investment? What is the earliest stage check that you’re comfortable writing and what do you want to see? Do you want to see paying customers or a certain MRR?

Yanev Suissa: A lot of these firms have, what I would call, nonsensical rules. Some of that is indicative of how a startup is performing, but I don’t think it should be a barrier. Our seed deals are not pure tech risk in that a product is already developed. It may not have all the features and it may not be in scale, but it’s deployed in some way so you can test it and play with it.

We look for foundational technologies and a fantastic team. The other key characteristic that narrows it down is partnerships. We look for someone to either have a partner in their business line or a design partnership with these big companies and agencies who will work with you knowing that your tech is not perfect but will put in sweat equity.

The pre-seed stage where it’s just someone in a room is not what we do, but what is comfortable for us is the seed where you have developed something and are trying to figure out where it goes in the market and how to grow it.

Sramana Mitra: Only enterprise and government customers right?

Yanev Suissa: Right. Our companies always have to have commercial customers but often do not have government customers. We don’t like companies that look at government as the first vertical or commercial success. We want them to work with commercials first like Databricks.

Sramana Mitra: What about geography? Are you still everywhere?

Yanev Suissa: Geography is another one that VCs tend to have a somewhat irrational perspective on although there is some logic to geography. Our geographical centers are Silicon Valley, Israel, and Boston. Most of our deals are focused on the US market. It comes also with the nature of working with the public sector that you can’t do deals in certain countries.

The reason geography matters to some extent is, from a high-level perspective, you want to make sure that the talent and the resources for building the financing is around that orbit. For us, the most important thing is, can we come to your office and help you build. The most meaningful relationships the VC builds with entrepreneurs are by digging in and becoming part of their team. As long as we can get there by plane in a reasonable time frame, we are happy to make an investment.

Sramana Mitra: There has been a distinct trend. I came to Silicon Valley at the end of 1996. It was very much your point of view at that time. People wanted to invest within five miles of their location in Silicon Valley and everything else is outside of their orbit. We’ve seen a really interesting evolution of the trend.

Part of what we are seeing a lot of is people building their larger development centers outside of Silicon Valley because they cannot compete with the talent war. They cannot compete with the cost of living. That’s one driver, but there’s another big driver that is there’s a lot of technology development including data and AI happening elsewhere.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Yanev Suissa, Managing Partner and Founder at SineWave Ventures
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