Triangle Tweener Talks

00:00:04 - Announcer
Welcome to Tweener Madness, the high stakes startup showdown where eight promising companies go head to head for a $25,000 investment prize from the Triangle Tweener Fund. But before the competition kicks off, let's meet the people making the tough calls. The judges. In this special meet the Judges episode, we're sitting down with the investors and industry leaders who will be asking the hard hitting questions, evaluating the startups, and ultimately deciding who moves forward in this bracket sty competition. Each round, three judges will vote on which startups advance leading up to the finals in early April where one company will take home the top prize from the judges. You'll hear about their backgrounds, what they look for in a winning startup, and maybe even get a little inside scoop on their decision making process. So if you're a founder looking for investment, an entrepreneur curious about what investors really want, or just someone who loves a good business battle, you are in the right place. Let's meet the judges. Here's your host, Scott Wingo.

00:01:06 - Scot Wingo
Hey everybody. We are today joined by David Jones, affectionately known as DJ to those of us that have known for a long time. And then David is a general partner at Bull City Venture Partners. Dave, thanks for joining us today.

00:01:20 - David Jones
Thanks for having me, Scott. I appreciate it.

00:01:23 - Scot Wingo
Yeah. So you graciously volunteered to be one of our selection committee members for the Tweener Madness. So we're looking forward to spending some time with you in the studio as we get into this contest. Until then, let's let folks know a little bit about you. How did you, where are you from? And then how did you get into this fun world of venture investing?

00:01:46 - David Jones
So let's see, from the coast, from Wilmington, North Carolina, originally grew up there and then took a little different path in life and went to the Naval Academy for undergrad and from there flew planes in the Navy for almost ten years. Um, and then while I was finishing up in the Navy, I got a master's in in computer science and then from there got out, did consulting for a couple years, did my own startup as a founder and CTO and then went back to business school at UNC and met my now business partner there and got into the venture business.

00:02:22 - Scot Wingo
Got it. What? Give us a fun Navy naval aviator story. Did you see active combat?

00:02:28 - David Jones
Fun? I saw some time in the Bosnia War, if you guys remember that in 95 90, my the plane I flew is called a P3 Orion. It's being phased out. That shows you how old I am. But our mission was tracking submarines. We'd go down to 200ft over the ocean and drop these sonobuoys basically these microphones that the guys in the back could drop down to different depths and we could, they could listen to a submarine. So I spent a lot of time in Iceland, Norway and places like that.

00:02:57 - Scot Wingo
Submarine hunting. Interesting. Yeah. My grandfather was a admiral in the Rear admiral in the navy on submarines. Worked for Nimitz. We'll have to have that conversation sometime. I can't believe I haven't had that before. That's cool.

00:03:10 - David Jones
Wow.

00:03:11 - Scot Wingo
Yeah. So. So. So your stressful situations aren't as stressful when you've been in some situations like that.

00:03:17 - David Jones
Not quite as stressful.

00:03:20 - Scot Wingo
Yeah. And then walk through the progression. I, I've known you guys forever but for folks that don't know you're on the third fund of Bull City, but then you guys go back to Southern Capital Ventures, right?

00:03:30 - David Jones
Yeah. So getting out of school, I joined Jason as he was starting Southern Capital Fund 1. We had two funds under the Southern Capital name. We called Fund 1 and Fund 2. And again early investor. The first fund was an early investor in Scott's first. Scott's third company, Channel Advisor. And then due to a death and one part time partner aging out, we started Bull City to kind of change up some of the ownership. And so we are now investing out of fund for of both. Same focus, same strategy, a lot of the same investors. Fairly, you know, a tech VC fund, fairly software generalist across the board. That fund is around $55 million. We're about halfway into that. We just made a new investment 20 days ago. So. So super actively investing out of that fund.

00:04:27 - Scot Wingo
Very cool. And then for founders that, that are kind of new to the area and kind of ask what, what's your sweet spot? So you've got a $55 million fund and you guys have done a really good job of. Of kind size which means the check size grows which is awesome for the area. So where's kind of like your current sweet spot on check size, company stage and that kind of kind of thing?

00:04:46 - David Jones
Yeah, Scott. So we brand ourselves as kind of seed and series A. And so I think what that's tend to mean is we don't do as much pre seed. So if it's two or three people with an idea, we'll do one or two of those per fun. But most of it is you have a beta product, maybe you have at least a customer banging around on it, something like that. A customer or two kind of up through, you know, something that's doing 2 or 3 million, 4 million in revenue, so kind of seed and Series A, again, fairly, fairly broad across software. Obviously we're spending a ton of time in AI and we have some themes in there that we've done a lot of, but I would say very founder focused. I always say 70% of our decision is usually on the founding team and you know our opinion of the founding team. So. So check size out of this fund can be. It's probably averages 750 to a million. We can write us something a little bit smaller. We've written a 250k check but I would say the sweet spot is probably 750 to a million and a half again depending on that stage. And then a plan to kind of get 2 and a half to 3 million total per company.

00:05:59 - Scot Wingo
Yeah. And then you know, everyone's favorite category is B2B SaaS. So I'm sure you do a lot there. Any other, any other favorite categories? You mentioned AI and then also any categories you guys don't invest in. Like, do you do biotech and life science type things?

00:06:15 - David Jones
So let's see. Scott, the things I think we like and we've done a lot of healthcare software is something we like. Again, we will not do biotech or anything with regulatory. No medical devices, nothing like that. So healthcare software, we've done a decent amount of, let's see, the enabling E commerce which is kind of, you know, a little bit of what Channel Advisor has done that and pure play E commerce, we've done a handful of pure play E commerce and so that's a, that's a sector that we like cyber. We've done a little bit of developer tools kind of infrastructure software across the layer is something that we've done a decent amount and like, and like that. So that's again a couple of themes. I'll come back to that. The founder will trump the themes, but those are some of the themes I think we've, we've done a lot in.

00:07:02 - Scot Wingo
Got it. Cool. And then what are some of your biggest successes as a firm? And we can go all the way back to SCV if you want. So. So you've been investing for, you know, you're on your sixth fund basically if we count the previous two. What are some of the big wins in there?

00:07:19 - David Jones
So Channel Advisor Scott, again, we were super fortunate to be the first institutional investor and Channel Advisor back when it was doing like 50k a month in revenue that went public, that alone returned our first fund over, don't quote me on this, roughly two and a half times by itself. So that Was a huge winner for our first fund. In our second fund, a company in Washington D.C. called Wedding Wire returned the second fund. That was that Wedding Wire has now bought the knot. And so in the Wedding Wire team runs the knot. But it's kind of yelp for weddings. Founders of Blackboard and so I would say those are, those are probably two of the biggest ones. Again, you kind of dream of being able to return the fund on a company and those are two companies that have returned the fund. And some.

00:08:08 - Scot Wingo
Yeah. And you guys, recently this one had like a lot of people in the triangle in it, but Biospatial had an exit. So congrats on that. That was a good outcome.

00:08:16 - David Jones
Thanks, Scott. Yeah, that was a really good one. You know, didn't raise that much money and we got an incredible multiple on it. So it was a really good one. Great, great team.

00:08:28 - Scot Wingo
Some people keep an anti portfolio, so it's kind of the ones that get away. Any. Anything come to mind there?

00:08:35 - David Jones
Unfortunately that list is so long, Scott, that we could take up this whole. But I, I think the ones that really hurt locally, I would say Pindo really, really hurts. I mean we, we've known Todd from the, from the get go, looked at some of his last companies and just if you remember at the time a product person in a company did not have budget, did not, you know, they had no budget to do that. And so, you know, kudos to Todd because he, it developed into that and we, we passed on that. That hurt the story that I had a category. Yeah, yeah, exactly. The story that I always tell and you know this guy as well, is In November of 2012, Jason and I were in New York sitting over lunch with a guy who was the president of the Nook at the time. And he was starting a company that was an exercise bike with a little iPad on it. And he's like, hey, I'm kind of doing this on the side. Would you guys be interested in investing in this company? Obviously it was Peloton and, and we're like, oh my gosh, why would we invest in an exercise bike with an iPad on it? So that hurt. That hurt.

00:09:43 - Scot Wingo
Yeah. You don't have big ups and then a big down at the end. So you've probably seen, I don't know how many pitches you've seen. I'm sure it's under the thousands at this point. What's your advice for? And these are going to be pre seed kind of like pretty early on kind of ideas, you know, kind of pre tweener. So there'll be some that have no revenue all the way to some that have some revenue, but certainly not at scale yet. What's your advice for founders on, you know, best tips and maybe even things not to do when you're pitching at.

00:10:12 - David Jones
This stage, I would say be yourself, be confident, you know, especially at that stage, Scott, you know, looking for you to be. To be some type of expert in what you're doing. I'm always impressed when the founder again, knows his competitors, knows the competitive set, like, better than the competitors even know themselves. So kind of you need to show that you're. The question we're asking is, why is this person qualified to do this? And so, again, showing. Showing that you're an expert there. And then I guess my recommendation would be rehearse the pitch a bunch. I think there's no substitute for that. I'm a big fan of that. Simplify the message. Again, that sounds very simple and trite, but I'm amazed at how many companies I come away with and I'm like, I'm not quite sure I understand what that is, but so keep working on simplify, simplify, simplify. And then I would say the last thing is don't feel like you have to answer every single question perfectly. It's okay to say, hey, you know, I need to find out, hey, let me work on that. Like, we're not expecting you to be the, you know, to know everything and admit when you don't know everything. So that's a couple of quick things.

00:11:35 - Scot Wingo
Yeah, it's good advice. So we really appreciate you doing this. We'll see you next in the studio live for one of the contests. So it's going to be a lot of fun to see how that goes. Any last words for folks that are thinking about applying to the contest?

00:11:50 - David Jones
No. Good luck.

00:11:53 - Scot Wingo
Awesome. Yeah, yeah. Appreciate you doing this.

00:11:55 - David Jones
Yeah, thanks.

00:11:55 - Scot Wingo
Thanks, dj. Appreciate it.

00:12:01 - Announcer
That's a wrap on this meet the judges episode. Now you know the minds behind the decisions, the investors and industry leaders who will be putting these startups to the test as Tweener Madness kicks off. They'll be asking the tough questions, making the tough calls, and deciding who advances in the bracket, all leading up to the finals in early April. Make sure you're subscribed so you don't miss a single matchup. And if you want to follow along with all things trade, Tweener Madness and the triangle startup scene, head on over to tweenertimes.com also, if you're thinking about launching your own podcast or want to bring professional production to your brand. Check out earfluence.com the competition is about to begin and we'll see you soon in the next episode.