Sunday, January 17, 2016

Venture Capital Profile on Greycroft Partners by Will Szczerbiak

Will Szczerbiak, a senior associate at Greycroft partners recently participated in the Texas Venture Growth Forum, in October, 2015.  First, a little background.  Will came out of Georgetown in 2007, and spent three years as in investment banker and joined Volition Capital in Boston sourcing and executing deals and everything related to getting a deal done.

He went to business school at Columbia, and interned at Greycroft Partners.  Greycroft focuses on Internet and mobile-enabled businesses in a wide range of industries.   He later joined full-time and works with both Greycroft’s core early stage and growth funds. The growth fund is a $300M pool of capital which partners with eVentures and focuses on later stage opportunities.  Their core fund focuses on Series A deals.
Greycroft takes a flexible approach to investing and does not maintain a minimum check size or ownership threshold.  They also don’t require a board seat and can lead or follow via syndication. The growth fund looks for more mature companies, usually with $10MM+ in ARR and established teams.

Greycroft looks for strong syndicate partners that can continue to support the company.  They don’t want to be the only investor able to support a company if they need to do a bridge round or some other financing at a suboptimal time. 

Greycroft aligns themselves with the entrepreneur.  Their fund is purposefully small relative to other firms, meaning that exits in the $100M to $500M range can be very impactful.  Bigger funds oftentimes take the entire round and may push the entrepreneurs to pass on lucrative outcomes because they need a considerably larger exits to return their funds.  At Greycroft they want the entrepreneur to exit when it’s right for them. They’ve worked with just about every venture firm you can name and are very collaborative as they believe their approach generates better outcomes for all involved.

For the core fund, they generally look for commercial traction.  Product-market fit, compelling unit economics, and a strong team are important.  Growth is also critical, as many portfolio companies are growing >10% month over month.   They also look for companies that have gotten to that point without having to raise large sums of capital.  An ideal range is less than $2M. 

In terms of sector, Greycroft looks for anything internet or mobile enabled B2B or B2C.  They have an array of mobile gaming, pure play content, and B2B SAAS companies in the portfolio. Some in sales enablement, security, fintech, etc.  Among other areas, they are interested in digital healthcare, cybersecurity, and have made investments recently in both spaces.  

They are agnostic in terms of geography.   In Austin, they’re invested in Buzzpoints, and the B2B courier service Dropoff.

On the operational side, they have innovation days with various groups in NY and also have an office in LA in which they recently setup a demo day with Macy’s to showcase their branded ecommerce companies.  They had twenty of the top executives of Macy’s attend the event and they’ve done similar events for Alibaba, Time Inc, and others.

Every year they put on a summit in which they invite key executives from potential acquirers, customers, and partners of portfolio companies. It drives a lot of business for their portfolios.

From the Texas Venture Growth Forum, Will noted two companies – Trendkite who has built an incredibly impressive roster of clients and Seismos which has an impressive team. 

Will likes to be on the investor relations list. With Trendkite, he is staying in touch till they need another round. He proposed a quarterly check-in to see how the business is tracking and their time table to another round of funding.   The next time he makes it to New York or he comes to Austin he’ll setup a meeting.  He likes some documentation to track the company’s progress but keeping in touch personally makes a big difference.  

See more about the Texas Growth Capital Forum coming up here.

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