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On April 21st, 2016 | by Aydin Senkut
On October 23rd, 2015 | by Aydin Senkut
On March 11th, 2015 | by Aydin Senkut
On January 13th, 2015 | by Aydin Senkut
On August 5th, 2014 | by Aydin Senkut
ZERO – Back in 2006, when I started Felicis, that number represented my deal-flow, the size of my network and the chance the venture establishment gave me of succeeding. It became instantly clear that to win, changing the rules was essential. So I applied whole- heartedly one of the core principles I learned from my experience at Google: obsession with questioning the status quo. I took a different path by pursuing companies poised for remarkable future growth (instead of the obvious hot sectors), being extremely flexible with ownership, not taking a board seat, and accepting uncomfortable valuations. The ability to write smaller checks more often allowed for learning much faster than at a typical venture capital firm. That initial approach swiftly netted a dozen exits by 2010, enough to help raise our first institutional fund.
To emphasize thinking differently and to consider a wide range of perspectives, I assembled a talented, self-made team hailing from very diverse, humble backgrounds, cultures and experiences – strikingly similar to our most iconic founders.
We diversified rapidly beyond largely seed-stage consumer-internet start-ups into a variety of new sectors and geographies that were not popular with most investors. Today, our investments are spread evenly across seed-, early-, and mid-stage companies that push the technological edge in an incredible range of areas from programming bacteria, to powering global payments; from platforms that power global logistics to next generation satellite systems. Our portfolio now encompasses companies with operations in 13 countries and 14 states. (We produced this brief video to capture the amazing spirit and diversity of our founders.)
We are very proud of the fact that, to date, our unique, unconventional approach has produced more than 60 notable exits and 3 IPOs out of 180 or so investments. We’ve had exits every year that we have been in operation except our first, even during the 2008-2009 downturn. Our biggest winners now include 11 companies valued at over $1B, including 5 already exited.
Collectively, our companies have created nearly 22,000 jobs, generated well in excess of $4.3 billion in annualized revenues as of last year, and raised over $4.5 billion of capital. For every $1 we have invested, $35 followed on average from other investors. Our current realized return across all our exits (including full and partial ones) is over 8x. (True to our tradition of transparency, these interesting stats and others are depicted in this new infographic here.)
On the back of this exciting momentum, we have just raised a new $200 million fund, our fifth, to mark our tenth anniversary. We will leverage that extra scale to make much bolder bets, and support our founders in more meaningful ways with one of the most diverse teams in venture.
As we embrace our next decade, we will always be mindful that the only success we strive for is the one that our founders envision for themselves. To make a stronger point of that effort, we were the first venture firm to commit to always vote our shares with our founders. Our mission is to help them realize their dreams and create their own destinies, anywhere in the world.
To work with entrepreneurs globally who will turn convention upside down, reinvent the things everyone takes for granted and give the world something it never knew it needed, but suddenly can’t live without, that is our dream.
Pursuing the right talent along with building a unique, sustainable company culture should be top of mind for every CEO. So important in fact that in two surveys we conducted among our portfolio companies, it was highlighted as one of the most crucial areas where we can help. We listened and sought out one of the most experienced and respected executives in this field: Beth Steinberg. We’re very excited to announce that Beth has joined Felicis Ventures as Senior Advisor for Talent and People Operations.
Beth will assist us in offering our companies strategic advice in critical areas like attracting top talent and developing a scalable company culture in a high growth environment.
Beth is an incredibly talented individual who dedicated nearly her entire career to developing successful organizational and people operations strategies partnering with exceptional leaders. She served as the first VP of Human Resources at Facebook, then as VP Talent & Organization Development at Sunrun (IPO) and next as SVP, People Operations at Brightroll (acquired by Yahoo).
We have relied on Beth’s counsel not only to address our founders’ organizational challenges, but also to pursue awesome technology solutions to reinvent people analytics and operations. Beth’s unique insights reinforced our efforts to make some of our most strategic bets in this space, including Greenhouse and CultureAmp. Without a doubt, she will continue to have a tremendous positive impact on the people within the Felicis community, and beyond. We couldn’t be more excited to have her on board.
At Felicis, we have long believed that great companies can be built anywhere in the world, aided by the democratization of access to capital, customers and talent. We have been fortunate to back companies based in 11 different countries. We also recognize that Silicon Valley remains the central hub for entrepreneurship; founders come here, against all odds, leaving behind everything known to them, to start something new. Unsurprisingly, immigrant founders founded 52% of all new Silicon Valley companies between 1995 and 2005. True to our DNA, Felicis founders hail from over 29 countries.
Our founders have told us that support from someone who has been in their shoes is invaluable. That is why we are thrilled to announce that Harley Finkelstein, Chief Platform Officer at Shopify, has agreed to join our Founder Advisory Council.
Welcoming Harley to this role will allow our founders to learn from one of the most talented operators in our portfolio. We strongly believe that deepening our team’s operational experience is one of the best ways we can serve our founders as they build great companies.
A former attorney, Harley took a non-traditional path to become one of Shopify’s earliest employees, eventually helping to grow the company to power over 150,000 merchants. We have been privileged to support Harley as he and Tobi, Shopify’s CEO, led the company to become one of Canada’s epic tech success stories.
Harley is a special person. Warm and personable, he is a great hustler, community builder and operator. Shopify’s Build a Business competition is a strong testament to that effect. It has grown under his leadership from 1,378 new businesses launched in the first annual competition, to more than 21,000 in last year’s competition.
With five portfolio companies based in Canada, plus close to another half dozen in the US with Canadian founders, Felicis is deliberately long on Canada. We look forward to having Harley as our eyes and ears for the best Canadian companies yet to come.
I’m extremely pleased to share that Wesley Chan, whom I’ve known for more than 13 years since our early Google years together, has joined Felicis Ventures as a Managing Director. Wesley is a phenomenal product expert: an early visionary on Google’s advertising system, he went on to found both Google Analytics and Google Voice, growing each business to tens of millions of users. He then switched to the investing side, playing a pivotal role in the growth of Google Ventures. Wesley made great investments in companies including Parse (acquired by Facebook), Optimizely, and iPerian (acquired by Bristol-Myers Squibb). He was recognized by MIT’s Technology Review as one of 35 Innovators Under 35 and has 14 US patents for his work on Google’s advertising system. He’s a really great guy all around, to boot.
Wesley will join as the fourth partner on our investment team. To capitalize on this momentum, I am also pleased to announce that we’ve increased the size of our latest fund, Felicis Ventures IV, from $96M to $120M. This is an exciting way to begin the new year, which I have no doubt will surpass last year in terms of the amazing achievements of our portfolio companies. In 2014, we were fortunate enough to celebrate two new $1B+ companies (Credit Karma and Adyen) and seven $100M+ exits (Twitch at $970M, Brightroll at $640M, Dropcam at $555M, RelateIQ at $390M, LiveRamp at $310M, and Acompli at $200M).
To be clear, the addition of Wesley to our team and the increased fund size are two important moves reflecting our deep commitment to delivering an exceptional founder experience. As a team, we have always felt our most important customers are our founders. We are constantly optimizing how we can better serve them, particularly in meaningful ways aligned with the boutique nature of our firm.
Wesley shares my view that Felicis is, first and foremost, a product built for founders, and should be developed as such. With this in mind, we conducted our first founder NPS survey in late 2013. In summer 2014, we publicly committed to always vote our shares with our founders. Finally, last fall, we kicked off a deep survey of founders, including a few we did not have the chance to back, to truly understand how we could improve our level of service.
The two recurring themes stood out. First, founders needed greater operational expertise from our team. Our NPS survey revealed that 75% of founder respondents sought more support in building their companies at the earliest stages, including help with hiring, building customer pipelines, deeper relationships with partners, and coaching from investors who had been in the trenches as an entrepreneur. In our deep-dive interviews, 90% of founders rated an investor’s ability to help founders reach critical milestones as “very important” (4 or higher on a 5-point scale). 100% of these founders rated an investor’s ability to provide and be connected to a broad network as “very important.” On average, this deep, meaningful support was more important than thought leadership and domain expertise.
We also discovered an identity issue that reflects Felicis’ exciting maturation over the last several years. Founders had trouble placing us in the context of the broader venture capital landscape. They recognized that we had graduated from our super angel days, when we were fortunate enough to be among the first investors in Meraki, Twitch, Dropcam and others. Founders also noticed us making larger, bolder investments in later-stage companies around the world, such as Adyen and Rovio.
The latter observation is consistent with the type of firm we aspire to become: one that leads with conviction and offers actionable, deep support to founders in company building, regardless of geography or stage. Though we have been fortunate to achieve a stellar track record, we have realized that it also carries higher expectations of Felicis as an active partner to our portfolio companies. To that extent, both the addition of Wesley to our team and our increased fund size are squarely targeted at deepening our commitment to better serve our founders.
We are actively listening and are determined to support founders in the best way possible. Concurrently, Wesley has already hit the ground running with two pending investments, which we look forward to announcing in coming weeks.
Felicis Ventures, the Palo Alto-based boutique venture capital firm, announced today that it has raised $96M for its fourth fund to back iconic companies with a focus on reinvention of core markets, such as security and mobile infrastructure, as well as development of frontier areas, including machine learning and personalized medicine. The fund, backed 100% by institutional investors, welcomes three university endowments as limited partners.
Since its inception in 2006, Felicis has refined its unique founder-centric approach while backing over 120 technology companies, 50 of which have been acquired or gone public. With each added fund, Felicis has tripled its aggregate enterprise exit value, which now exceeds $5.6B. The current portfolio spans a variety of sectors and includes startups headquartered in ten countries. Notable portfolio companies include Adyen, Bonobos, ClearSlide, Counsyl, Fitbit, Rovio and Shopify.
With its fourth fund, Felicis’s largest to-date, the team intends to lead more sizeable financing rounds and continue to play a pivotal role with its founders. “Felicis believed in our potential before everyone else,” remarked Manish Lachwani, co-founder & CTO of Appurify, a mobile testing company recently acquired by Google. “Many investors make introductions for their portfolio companies, but Sundeep made the most important one of all: he brought me and my co-founder together,” said Lachwani. “We frequently looked to him for advice and support all the way up until our acquisition.”
Felicis’s most important requirement for partnering with a founder is shared conviction. “Felicis sought us out after using our service. They were both prepared and enthusiastic at our first meeting. The team made it clear that they believed in our mission and would work with us to make preventable medicine achievable,” said Ramji Srinivasan, cofounder of health technology company Counsyl. “Their initial investment in our Series B and substantial follow-on support matched their conviction on day one.” Similarly, a strong belief in the enormous potential of global payments infrastructure led the Felicis team to pursue Netherlands-based
Adyen. Following two years of building a relationship with Adyen’s founders, Felicis became one of only two institutional investors in the rapidly growing company.
The new fund will also allow Felicis to meaningfully deepen its alignment with founders: today, the firm announced a commitment to always vote its investor shares alongside them. This initiative has been lauded by industry heavyweights, including Sam Altman, President of Y Combinator. “For the two years I was angel investing before joining YC, I often did this when I funded entrepreneurs. I applaud Felicis for taking this step and hope other funds will follow in their footsteps,” he said.
Jack Abraham, a founder Felicis has backed multiple times and whose first startup, Milo, was acquired by eBay, originally suggested the voting rights concept. Abraham, who is also an advisor to Felicis, noted that, “Renata, Sundeep and Aydin genuinely care for their founders.
The firm’s conservative fund size means that exits that wouldn’t move the needle to larger funds remain meaningful for Felicis, reinforcing their alignment with the companies they back. Whether it’s committing to vote their shares with the founders, or being flexible on the usual ownership, stage or location constraints, Felicis is trailblazing a truly special approach to venture capital.”
For more information on Felicis and a graphical representation of the fund’s impact globally, visit: www.felicis.com/infographic