20 Apr Pausing for a Reality Check
I have had the privilege of knowing the folks at Aver Informatics since the team consisted of the two founders and the plan was on the back of an envelope. It has been quite a ride over the last few years, a ride that, alas, has taken the company from Green Bay to Columbus Ohio. As a strong advocate for high impact entrepreneurship and venture capital here in the Badger State, last year’s move to Ohio was disappointing. As a small investor in Aver – and having spent some time with the company and its lead investor in Columbus last week – I am a bit chagrined to say that, well, moving to Ohio was a great idea.
Aver – which has grown from ten to close to fifty folks since the Drive Capital led funding last year (and will be approaching one hundred by the end of the year) – shares “office” space with Drive and another Drive portfolio company. I put the word office in quotes because except for a couple of conference and “quiet” rooms, the space looks more like a busy trading floor than an office. Everyone – from Drive’s partners and portfolio company CEOs down to junior programmers and administrative folks – works at standup desks scattered about the floor. The desktops themselves are in the form of whiteboards, and due to space constraints there are some “hot desks” that are shared among folks depending on day, time, and needs. The activity level – throughout the day last Friday – was intense, in the best sense of the word.
Of course, we all remember – well, those of us of a certain age remember – a time way back in the 1980s when more than one Silicon Valley startup was caught hiring folks to fill otherwise empty offices and look busy for prospective investors. Talking with some of the folks at Aver, though, made it clear the activity on the floor was quite real. Deals were closing, and new products were being introduced. The vision – big last year – is on a new level this year (and so is the exit strategy). An idea, vision, and team that was significant and promising last year is today huge and compelling.
The question I kept asking myself, as the day went on, was what accounted for the “new” Aver? What changed – besides the move to Columbus – since last year that took Aver to another level (or two, or three)?
The good news is that the answer is not Columbus as such. Don’t get me wrong, Columbus is a pretty vibrant place. But truth be told, in terms of high impact entrepreneurship generally, the Columbus story (today, at least) is more or less the Madison story.
Except for Drive Capital.
For those unfamiliar with Drive Capital, the firm was launched about two years ago, and quickly put together a “first fund” of almost $300 million – in Columbus. Quite a feat, until you take into account that Drive’s founders were previously partners in one of Silicon Valley’s most storied and successful venture capital firms, Sequoia. Drive may be “in” Columbus, but it is “of” Silicon Valley. In terms of experience, the Drive team has likely invested, over their years in venture capital, a lot more early stage risk capital than has been invested in Wisconsin in total over the same time frame. And their collective rolodex, in terms of numbers and quality is, I suspect, bigger than the collective rolodex of all of Wisconsin’s early stage venture capital investors combined. Bottom line: Drive can write more and bigger checks than any early stage investor in Wisconsin and – even more to the point – can and does follow up those checks with the kind of access to potential customers, downstream investors, senior level talent, and strategic partners that Wisconsin’s early stage venture investors can only dream about. Just ask Aver CEO Kurt Brenkus.
I remain a huge fan of high impact entrepreneurship and venture investing in Wisconsin. I believe the Badger State can develop a self-sustaining high impact entrepreneurship and venture capital community that can be a major engine of economic growth in the state. And I still think we are making progress to that end with a new generation of smallish venture investors and nationally-recognized programs like gener8tor. At the same time, I don’t think we will get where we want to go until we have our own Drive Capital; until, that is, we have at least one indigenous early stage venture capital fund with several hundred million dollars under management, led by folks with deep experience, network and reputational assets in Silicon Valley – and beyond.
More articles by Paul A. Jones
- Thoughts on why good venture investors turn down good deals
- Thinking about financing rounds
- Angels and Early Exits: Sometimes, a Bird in the Bush is Worth More than a Bird in the Hand
- Beyond the “A” Round
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of WTN News. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.