1Mby1M Virtual Accelerator Investor Forum: With Steve Beck of Serra Ventures (Part 4)

Sramana Mitra: How did that happen? How did they find you? How did you find them?

Steve Beck: I built a company with some guys called C2B Technologies. We sold it to a company called Inktomi in 1999. We had a great exit. We started a little venture firm. One of the companies we began to help was called BioSpace. There was a lady there that we really liked.

We put a little money into her company and really came alongside her. Lo and behold, she introduced us to her father Bob King. She said, “My dad is a pharmaceutical investor in the Valley. He’s come across these guys from China that have this idea about a search engine. He knows nothing about search.”

We built a search engine and we sold our product to the largest search company in the world. It was Inktomi that ran search at Yahoo!, Google, and Microsoft. 70% of the search market was owned by Inktomi at that time. We met with Bob. Bob said, “I have these two guys who had a 12-slide deck.”

The presentation was so compelling that we pulled Bob aside and we said, “We can’t let these guys leave the room without writing a check.” We wrote a check for $1.6 million. It came to us simply out of a relationship.

We like to come alongside our portfolio companies and serve them. We don’t come to lord over them. We like to roll up our sleeves, get in the trenches, ask how we can help. When entrepreneurs see that, it builds goodwill and good things happen. She would have never introduced us to Bob if we hadn’t brought value to a certain level. That’s an interesting story.

I got another story on a company I’m very excited about called White Box Defense. White Box has built a radio frequency and prediction platform that controls drone movement in airspace. They can put an invisible wall up and keep any drone from entering any geography. They can take control of drones. They can whitelist drones.

They got invited to go speak at my undergrad alma mater at Cal Poly, which has now a very exciting center for innovation and entrepreneurship. They invited me, and I looked at the 20 companies they were incubating. There were two that really stood out to me. One of them was White Box. Here’s the thing. We know the commercialization of drones is in all our futures. We’re going to see that happen. The need to be able to manage airspace is absolutely critical.

Two, the IP of being able to control a drone without that drone’s permission is complicated intellectual property. I was very intrigued that they were claiming that they had done that. That really got me interested. The guy was 20 years old. He had four Ph.D.’s working for him. He was passionate and profoundly articulate. He had an amazing sense of business acumen. He was coming back with really insightful answers.

I researched the company and put an initial $600,000 in. I called some of my buddies. Within 14 months, I can disclose right now but we have done a massive up round led by a reputable firm. Their sales activity is global. It has been a really fun ride. For me, it was the founder himself that grabbed my attention.

Sramana Mitra: If you think about all the trends that you’ve seen, how has that informed your current investment thesis? Where do you think you want to invest? What sectors?

Steve Beck: Interesting. We’ve looked at 1,400 deals over the last 12 months. We’ve invested in 18. What’s difficult for me is we’re so broad. I know firms that are just IoT firms or they’re a fund focused on the AI opportunity. We are very broad – AgriTech, scientific instrumentation, medical devices. We will do B2B SaaS, IoT and all these things. We’re more opportunistic.

What really turns my crank are entrepreneurs. I have invested in entrepreneurs where their concept has failed and yet they pivoted into a completely new concept. They’re like a cat. You throw them in the air. They will land on their feet. I get a very strong sense about who the leaders are. That excited me tremendously.

Just a couple of months ago, I invested in a company called VeriSIM Life. They’re developing an AI monkey for doing FDA testing in the United States, which usually takes six years. They’ve been able to reduce that down to six months and profoundly reduce animal suffering along the way as well.

With Jo, it’s her energy, intelligence, optimism, and intelligence, and leadership. Those are the things I look for. I was blown away. We invested. So did Bezos, Bill Gates, Zuckerberg. It’s really the entrepreneur.

Sramana Mitra: Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Steve Beck of Serra Ventures
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