Investors from Accel Partners, Sierra Ventures, and Samsung outlined investment trends at the CED Tech Venture Conference. Their advice: Change an ecosystem.
Alex Estevez of Accel Partners, Mark Fernandes, of Sierra Ventures, Brendon Kim of Samsung NEXT Ventures, and moderator Robbie Allen of Automated Insights, offered insights into “Investment Trends from Outside the Region” during a brief panel discussion at the conference.
Kim said Samsung NEXT “wants startups to change an ecosystem. Do some homework. Think deeply about how Samsung can help you in more ways than putting your app on our phone.” He added that Samsung NEXT is “Easy to reach out to.”
Fernades of Sierra Ventures said, “There is plenty of capital out there. It may not seem like that if you’re fund raising, but the amount of overhang is crazy. A lot of capital is chasing unicorns. Lots of money is chasing early stage deals, but more dollars are going into later stage deals.”
Sierra, he said, “Is seed and Series A focused on B2B companies.” His advice: “Have a prepared mind and know which partner you want to chase.”
Embrace a culture of failure
Estevez of Accel touted the virtues of North and South Carolina for entrepreneurs. “They have so many excellent qualities. Government-private collaboration, the tax environment, the low cost of living.”
But, he added, the region needs to embrace a “Culture of failure. You learn a lot from failure. The acceptance of failure is what makes Silicon Valley unique. It’s common for teams to go from something that doesn’t work to something that does. To get to the next level, you have to get used to things not working out and there is no shame in that.”
Asked about investing in open source firms, Estevez said they must “Be clear about what the business model is. It’s like AI – what’s the problem you solve?”
Moderator Allen asked Estevez why Accel has not done more investing in the Southeast.
“That’s like being asked why you have never been married,” Estevez replied. “I’m here and we have looked at a lot of things. We bet on teams and on the East Coast we’ve done larger deals in New York and Atlanta. But a lot of companies in the Raleigh/Durham area are ripe for our investments. We want to get married.”
Responding to the question of what technologies they are most interested in, Kim said he sees a lot of interesting things going on at the University of North Carolina. Augmented reality interests Samsung, he said. “It is another form of display and our business is about display. There needs to be some fundamental breakthroughs in terms of optics, but I think we’ll get down to the ideal form factor, which is a pair of glasses.”
The investors also said AI, especially in terms of making good decisions with less computing power is a hot area.
Fernandes said data analysis that can change industries, applying it to inefficient businesses, healthcare, software as a service, and financial services are all “The biggest buckets for us.”
“There is such an abundance of data but despite all the analytics, there is a tremendous mismatch between the amount of data and understanding it. We still don’t understand more than 10 percent of it.”
Like many speakers throughout the conference, he referred to legendary venture capitalist John Doerr’s comments about understanding healthcare data in a fireside chat Tuesday at the conference.
“Understanding healthcare data could take a trillion dollars from our 3 trillion in healthcare costs,” Doerr said.
Kim, telling a story about forgetting his wallet so that he showed up at an airport with no ID, said, “I’d loved to be able to do ID with my phone. I’d like an ID feature to work on web sites, a door-to-door function I could use with Uber, at the airport, at a hotel.”