I would say that I am a first principles investor given I invest in the earlier stages of a company’s life. First and foremost I’m looking for founders who have built something new and unique. This means either a new technology or platform or they are creating a new market. I’m also looking for founders who are technical and who have the ability to take the company all the way. Finally, I like to get in early. On top of these guiding principles, I have to be excited about what the founders are building as this is an incredibly long-term game.
As far as sectors, I have been spending a lot of time focusing on enterprise software especially around data analytics as well as more vertical focuses like healthcare and finance. The next big battleground in saas is in financials and for the vertical focuses, you need an incredibly large home market to get going and that is why most fintech companies that have launched in the UK internationalize fairly quickly to the US or the rest of Europe.
What would you say are the top investments you have been a part of? What stood out about those investments in particular?
My best two performing investments so far have been Lyst and Trustpilot. What has really stood out about both of these companies is how the founders have grown with the companies. It has been impressive watching them stay ahead of the company in terms of knowing what the company is going to need.
A personal deal that I got involved with a few years ago as an advisor called MediaCore just got acquired by Workday. The founders were never willing to make big compromises which worked out well for them as they stuck by their initial vision and only cared about serving their customers. I think we are still in the very early stages of creating entirely new markets in the education space.
Another company that is going to have a widespread impact is called StrataJet. They are effectively building two monopolies around enabling business people to travel faster and more efficiently by owning the data in the private aviation space. It’s been awesome to watch so far (especially the CEO who flies in an old jet from airfield to airfield to sign up his customers personally).
What areas are you most excited about and why?
I still think that we are at the beginning of disrupting the old guard in finance and healthcare. I’ve made a few personal investments in this space and will continue to make more.
One of my fastest growing investments is called SketchDeck. It was actually started by two Brit’s who then moved out to the Valley. They are a saas enterprise marketplace company that allows an enterprise to outsource any of their design requirements. We’ve been using them at the company I’m currently incubating to create all of our branding and design, marketing assets, presentations etc. What’s exciting about what Chris and David are building is that highly specialised workers from not only the design world, but soon from software engineering, accounting etc would love to plug-in and work using Sketchdeck. This isn’t too dissimilar from the Uber offering which allows drivers the flexibility of working when they can and when they need. This is going to be a major societal shift over the next 30 years.
What are your thoughts on the current state of the European technology market?
It’s never been stronger. I don’t think really good startups are going unfunded like they used to. It’s still massively undersupplied compared to the US if you look at the sheer amount of demand for VC at almost every stage across Europe from Series A to growth rounds, but you could argue the US has been oversupplied. As capital is becoming much more commoditised it’s finding its way to the best businesses around the world. Just look at the latest rounds in Spotify, Blablacar, Deliveroo, Lyst, etc. a lot of it is coming from the US.
Money aside, I think the biggest problem we have in Europe is a lack of middle management and strong talent that has taken companies public and built $20b+ companies that are still around. The US has a much thicker market in terms of talent so we struggle to find world class product folks or sales managers, but this means we just have to work 10% harder than everybody else.
What have you enjoyed the most since becoming an EIR at Seedcamp?
It’s a cool job because I go from discussing saas metrics with a founder based in Turkey to discussing growing the supply side of a marketplace business based in Stockholm to supporting a founder prep for their Series B road trip up and down Sandhill Road.
Many people don’t realise this, but Seedcamp is not an accelerator any more. They are a first round investor that leads or syndicates pre-seed and seed rounds and they have now backed just over 200 companies to date. It’s been interesting learning how they’ve scaled their internal operations to build a platform to service these 200+ portfolio companies and continue investing at a constant pace.
You can follow Scott on Twitter @Scott_Sage.
The VC Long View is a regular series of posts where Seedcamp talks to our network of investors on the trends their following and the ideas they’d like to back. In this post, we talk to Scott Sage.