1Mby1M Virtual Accelerator Investor Forum: With John Frankel of ff Venture Capital (Part 3)

Sramana Mitra: That is a very reasonable strategy for Indiegogo. You mentioned that Indiegogo’s equity crowdfunding platform has been successful. What are the trends? What kind of ventures are gaining traction in the equity funding world of Indiegogo?

John Frankel: A lot of the things they’ve been going for are what you might consider lower beta type of projects. These are ones that may not be shooting hundred times returns but can really do well. Maybe less of the kinds of things that the venture capitalists back. We’re in the early days. It’s too early to say that crowdfunding is a niche. It’s somewhere between the first and second inning with regards to the opportunities that crowdfunding brings.

Sramana Mitra: We have entrepreneurs in our portfolio who may be interested in looking at working with Indiegogo in some of their equity crowdfunding stuff. We do a lot of bootstrapping. Our goal is not to fund with venture capital a million entrepreneurs.

Our goal is to help a million entrepreneurs reach a million dollars in annual revenue. We do support a lot of entrepreneurs that are not hitting for the home run. There may be an opportunity for us to work with Indiegogo on some of these.

John Frankel: Absolutely.

Sramana Mitra: You’ve talked quite a bit about Indiegogo, which has been very interesting. Talk a bit more about your current portfolio. You talked about cybersecurity being an interesting area. Cybersecurity, as we both know, is a very crowded market.

From the beginning of venture capital, it has been one of the hottest areas of venture capital and incessantly so. For 20 years, people have been invested in cybersecurity. How do you parse cybersecurity opportunities? Help us understand the thought process that you apply for those kinds of deals.

John Frankel: We think it’s the gift that keeps on giving. As time goes by and new platforms come along, it’s important to protect them. We look at cybersecurity as four main categories. One is perimeter protection. Companies like Distil Networks fit into that. Another is monitoring attacks. That’s where a company like CyberX would play. There’s a whole bunch around identity. That’s where a company like Unity comes to play.

The fourth category is increasingly important. It’s around prevention. We invest in a company over a year ago called DocAuthority the monitors, in real time, all the documents large organizations have and seeing who has access and who should have access. That can then fit in to the perimeter defenses so the important documents don’t get downloaded on a thumb drive or emailed down to the organization.

The area that we think is going to grow is AI-based attacks. A lot of the attacks today are automated. They’re not learning systems yet. We see this as an opportunity.

Sramana Mitra: When you look at enterprise, are you also looking at mid-sized enterprises or is it just large enterprise?

John Frankel: We look at it all. I’ll tell you a little secret. Most SaaS companies think they should start with the small businesses and work their way up. What we’ve seen is the ones that get successful are the ones that solve problems for the largest companies and work their way down.

Sramana Mitra: It depends. We have one company that we look up to very much. It’s and entrepreneur that I’ve known for 10 years. Sridhar Vembu has done Zoho. Zoho is going to do a billion dollars in revenue next year. They go after the very small businesses. They’ve really done a superb job. It’s a completely bootstrapped company and not one penny of venture capital in the business.

John Frankel: That’s nice.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator Investor Forum: With John Frankel of ff Venture Capital
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