1Mby1M Virtual Accelerator Investor Forum: With Kyle Asman, Managing Director at Backswing Ventures (Part 1)

Kyle Asman is Managing Director at Backswing Ventures, a firm that has a non-Unicorn investment thesis.

Sramana Mitra: Let’s get acquainted. Tell us about your background and also about Backswing Ventures.

Kyle Asman: My background is varied throughout different parts in finance. I was fortunate to have a really strong internship in college and got the opportunity to work with Goldman Sachs. I learned a lot about investment banking. I started a boutique advisory firm in January of 2018 and exited that in October of 2019.

Then I launched Backswing Ventures in February of 2020 which was an interesting time to start a venture fund. It’s a small venture fund focusing on seed and Series A investing anywhere from $250,000 to a million dollars in early-stage companies. We have a pretty good sized portfolio now. Our fund is fully deployed. We’ve had several successful exits so far.

Sramana Mitra: How big was the fund?

Kyle Asman: $15 million.

Sramana Mitra: Let’s double-click down into what was the investment thesis of Backswing Ventures so far.

Kyle Asman: I had a very clearly-defined investment thesis. I wanted to invest in companies that had a minimum of a million dollars in revenue. It’s super hard to start a business and I wanted to make sure that companies had proof of concept and could sell a product to a real customer before giving them capital for investment.

Two, I wanted them to be profitable within 12 to 18 months of investment. I have a big focus on profitability where we’re seeing more of the venture space go right now instead of growth at all cost. Three, I wanted companies that were thinking about exit opportunities within the next five years. The majority of the portfolio is in software.

Sramana Mitra: It’s an interesting investment thesis. The vast majority of the venture funds that we see in this forum tend to be more of the traditional venture style. I’m actually very interested in your investment thesis because we do believe that not every company can be a unicorn. Venture-scale growth is an anomaly and not the normal rhythm of business.

How do you find companies that already have a million dollars in revenue and are interested in working with you? That’s also a territory where other venture funds are also interested, but they’re interested in it from a growth focus. Your interest in them is from a capital-efficient, business-building, profitability focus. How do you find that special kind of company?

Kyle Asman: One of the reasons people like to work with Backswing is because, to a degree, we are hands-off on the day-to-day operations. I’m not overbearing on any of our founders. I’m not trying to push them in one direction or the other. I try and serve as a sounding board for them on an as-needed basis. Some people get scared by certain venture funds who can be overbearing. People want to run their own companies. They need help, but they don’t want to be told what to do day in and day out.

This segment is part 1 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Kyle Asman, Managing Director at Backswing Ventures
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