I'm becoming a Venture Capitalist

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acadian logoWhen I left SAP, one of the first things I did was to invest in an unproven venture capital fund called Acadian Ventures, led by first-time VC Jason Corsello. I became what is known as a limited partner. I’ve given Jason some input on deal scouting and investment decisions, as well as coaching a couple of his founders. I’ve labeled myself an active LP. Most of the other LPs are former or current HR tech execs, and several are friends.

A bit of back story

I've known Jason for about 2 decades. It would have been about 2005 when I met Jason Corsello. At the time he was an analyst with Yankee Group, and we hung out at Sapphire when Jeff Nolan got the blogging thing rolling into enterprise land. Jason went on to lead strategy and M&A at Cornerstone. We used to meet at various software conferences about once a year or so. We went jogging and discussed SaaS, and we commented on each other blogs.  

We stayed connected over the years, while I was at Gartner and SuccessFactors.  About the same time I was wrapping up at SAP, he left Cornerstone to start Acadian Ventures.

A sound investment

It turns out my decision to invest with Jason was a smart one. The fund is performing really wellAfter a couple of years of investing it is on about 3x return on capital, nearly double the median, making Acadian a top-performing fund...

 
For those that like acronyms and emojis, I give you:
  
fund

 

A new opportunity

A couple of months ago Jason approached me with a proposal. He going to raise Fund 2, and asked me to join him as a General Partner. The more I thought about it, the more it makes sense.  Everyone I asked said what are you waiting for? 

The investment thesis remains hyper-focused on early-stage future of work businesses. Jason wrote this, and it resonates strongly with me. 

To understand our firm, it's important to understand how we think and the convictions in which we invest. At our foundation we believe that work is undergoing massive transformation. Increased automation and the displacement of millions of traditional jobs are creating a work and societal crisis. Work is also increasingly digital, distributed, complex, and constant. The workforce is demanding better tools to do all of our jobs and free up time for wellness, self-fulfillment, and personal development. The way companies operate today - organization structures, physical workspaces, managing people and teams, the growth of an independent workforce, and the ethical demands that are impacting shareholder value - will change more in the next 10 years than they have in the last 50.

We believe that we can work well together, and we bring a serious depth of experience to play. The space has never been more exciting. We see the opportunity to build on the success of fund 1 and make Acadian Ventures the go-to specialist fund.

The last 3 years running my advisory firm means I’ve developed relationships and experiences with a variety of early-stage HRTECH companies, and I’ve helped many of them grow, and get better prepared for fundraising or even acquisition. I’ve built trust with PE firms, start-ups, investment bankers, scale-ups, and large vendors across the globe.  I’ve done more than a dozen due diligence projects, supported 6 exits, and made multiple angel investments. This has helped me develop more financial and investment awareness, but I still have lots to learn.

I’ll gradually reduce my Otter Advisory work, and focus the majority of my time on the fund and portfolio companies. I'll be in touch with clients to figure this all out over the next few weeks. I'll continue to collaborate with the folks from the collective.  Services like the  Product Positioning Audit will continue, being led by the mighty Luk Smeyers.  

I’ll be spending my time seeking out early-stage companies, and helping portfolio companies do better.
It seems a natural evolution of the advisory and investor work, with the lever of capital to make a stronger impact.  The academic work I’ve been doing on innovation and strategy at Oxford dovetails nicely too.  

The term “smart money” often deserves to be treated with derision, but I’m hopeful that we can use our shared experience and insight to find great founders and help them build great businesses. I may bore them with long sermons about HR data models and effective dates, how to partner with big vendors without being squashed, or how to spot that awesome customer that will bring a sparkle to your roadmap. I probably will do a lot of nagging about ideal customer profiles,  and make them read Dave Kellogg’s posts about market fit.

I am excited about the potential to build a broader platform, leverage our combined networks, and expand our team later this year.  If you would like to discuss the fund in more detail, please drop me or Jason a note. 

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