Subotovsky: Enterprise SaaS requires solving business problems, not just pleasing users
Santi Subotovsky · 20VC: Zoom From Series A to IPO, How VCs Can Provide CEOs with Additional Leverage and Why The Negative Effects of Signalling Are Very Real with Santi Subotovsky, General Partner @ Emergence Capital · Jul 15, 2019 · at 20:54
Santi Subotovsky, General Partner at Emergence Capital, explains the limits of purely consumerized, bottoms-up adoption in enterprise SaaS software.
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“If you don't do that, if you're not solving a real business problem, and you're just solving something that the end user wants, but that's it, you're not going to be able to build a true enterprise company.”
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More from Santi Subotovsky
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“I don't fault people here in the Valley for saying video conferencing is done. It's not going to happen again. It's a race to the bottom. There's no room for a new player.”
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“So for us at Emergence, we all love that phase, and that's why we should be a lot better than more diversified firms because we have a very targeted approach.”
Subotovsky: Emergence Capital generates most fund returns from first two checks
“What we realize for our fund and our strategy, we typically generate most of the returns when we write that first and second check. Then everything else we do afterwards, it's not in line with the initial returns that we're generating.”
Subotovsky: Emergence Capital will not blindly exercise pro-rata rights
“So our strategy has shifted over the years from we want to participate in every round until the company goes public and beyond, to we're going to Be incredibly concentrated early on, and then we're going to help those companies find the right partners to suppo…”
Subotovsky: Multi-stage VC funds follow on in only 30% of early investments
“A lot of entrepreneurs underestimate the negative effect of signaling. They raise from this multi-stage funds, and this multi-stage funds are incredibly focused, and typically they follow on on about 30% of their earlier stage investments, and that's an incred…”
Subotovsky: VC will be disrupted by specialized capital, not mega-funds
“I feel that venture capital is going to get disrupted, and I feel it's not going to get disrupted by humongous funds. It's going to get disrupted by people who are funding businesses and are providing the right capital for the right needs.”