Friday, January 2, 2015
What I Learned in 2014: Jeb Spencer, TVC Capital
We've been featuring a few reflections on the last year from a number of movers and shakers in Southern California's technology industry over the last couple of weeks, during the holidays. Today, we have some thoughts from Jeb Spencer of TVC Capital, a private equity investment company in San Diego.
What was the most significant event for you or your company this year?
2014 was the most active year in TVC history as measured by the number of investments/acquisitions/follow-ons/exits we completed. In addition, after less than 90 days from announcement to completion, we closed our latest fund just before Christmas with $115 million in commitments. We enjoyed tremendous support from our existing institutional investors and welcomed a few great new endowments/universities to the fund.
What was your biggest lesson learned in 2014?
Technology investing is not for the faint of heart and requires vision, focus, tenacity, creativity and some luck (a lot?). I have always known that the odds for success were stacked against us, but this was the first year we really quantified those odds. Looking at the 21,600 venture deals done in the last decade -- 66% have returned 1x or less, 91% have returned 5x or less and only 0.7% achieved a market cap of $1 billion or more. Those 10x deals everyone seems to be hunting are few and far between. So how do you address these odds and win? Build a great team that is focused on providing a unique product or service that offers something of great value that your customers simply cannot live without. Then treat these customers well and great things will happen….maybe even 10x.
What technologies or things are you looking forward to most in 2015?
There are a number of areas where we are focused right now including: the incredible explosion of online video and its impact on the enterprise, improved web and email security solutions, the gamification of wellness, tools that assist millennials transitioning to adulthood across all facets of their lives, disruptive innovations rolling out in the banking industry, the spread of enterprise based online communities and the increased proliferation of cloud computing.
Jeb Spencer is the Co-Founder and Managing Partner of TVC Capital, a growth equity firm focused on the investment in and acquisition of mission critical software companies.