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. Today we're joined by Kevin Mosley. He is going to be one of our illustrious selection committee members for Tweener Madness. He also may win the the Stick to Itivus award. He's got a little bit of a sickness but he decided to kind of come on anyway so we really appreciate it. Kevin, of course.

00:01:24 - Kevin Mosley
Happy to be here, Scott.

00:01:25 - Scot Wingo
So tell us a little bit about your personal background before we get into what you're up to at Jurassic.

00:01:31 - Kevin Mosley
Yeah, right on. So I've been in the triangle for about 15 years or so, working always for growth stage software startups. Was an operator long before I was an investor. My wife went to NC State. We decided to stick around the Triangle. I'm a Clemson grad and so we found ourselves around here and thought no better place to go start a career and we've been proven right a few times and so yeah, super, super happy to be here. Cool.

00:02:01 - Scot Wingo
And then how did you get into the, the Joe verse, the callopy universe there?

00:02:06 - Kevin Mosley
Yeah, it's right. So I joined Bronto in the growing and scaling years. So I started off my career kind of on the product side, eventually moved over into sales and marketing and then found my way with Bronto into Finance and FP&A and so had a finance degree and thought maybe I should use it at some point and was now what I'll tell people is very lovingly brainwashed by Joe and Chaz Felix, his COO and co founder as to how to grow and scale a capital efficient company. Bronto obviously being Bootstrapped grew from the time I was there from about 10 to 50 million of ARR and ultimately sold in 2015 to NetSuite for about $200 million. And so I loved it. I really got very good at the cross functional communication and all the planning that goes into that. And so eventually kept on doing that at more and more companies throughout the Triangle before Joe and I in 2019 decided to start Jurassic Capital together to look for companies that remind us of Bronto. Hence the Jurassic name.

00:03:14 - Scot Wingo
Yeah, yeah. So everything in your the colopy universe has a fun dinosaur name. Yeah, yeah. So to help us understand. So there's Copy Ventures, there's Primordial, and we're going to talk to Jen soon and then you're in Jurassic. How do you each carve out a little piece and what does Jurassic do where you are?

00:03:33 - Kevin Mosley
That's right, yeah. So just starting kind of at the top with Copy Ventures in Joe's world. You know, after Joe exited Bronto, he looked for, you know, he looked for any way that he could to support primarily the Triangle startup ecosystem. And then beyond that kind of now being North Carolina and then even broader than that kind of the Southeast, he did a kind of entrepreneur in residence program, made some angel investments, helped out a couple of companies in the area, invested in the local funds and then kind of looked around and said, you know, there seems like there's a gap of companies that aren't necessarily getting to an exit. We had a lot of companies in this area, maybe because of the, the educational ecosystem startup, get to probably a million dollars or so and then they'd kind of get stuck in obviously with you, the tweener land, without getting to be big enough to be effective investments for larger growth equity and private equity firms. And so they kind of fell into this middle ground where they would stop growing. They had to become super capital efficient. Maybe they raised a little bit of money, maybe they didn't, but they just weren't in this kind of high growth atmosphere that a lot of these investors were looking for. What we looked at and said was, well, how do we support this ecosystem? How do we get more exits? They don't necessarily have to be Bronto level exits, but they can be $50 million exits, $25 million exits, whatever they might be. And that's fine. How do we get more of those? Well, the reality is someone kind of needs to play that middleman gap of taking those companies that are good, have gotten to a million or so of annual recurring revenue, but haven't necessarily Been through it before, where they can get to that transitional period where they can turn themselves into a growing and scaling platform that then those growth equity firms are really excited about. So that kind of middle ground, that one to $10 million transitional phase, is what Jurassic focuses on. And so that's where Joe and I kind of looked at the world and said, that's something that I've done a couple of times in my career. And so we really enjoy that. And so specifically, Jurassic started as kind of a subsidiary of Colopy Ventures and we decided to focus on getting involved in those companies that's like almost early growth equity, not quite venture capital, but more on kind of the growth equity side being super operational, super active, and only investing in a few companies over a longer period of time. So up until last week, we had six portfolio companies in five years. We exited two of those. So now we're down to four. But really the goal in that being get involved somewhere between 1 to 5 million of ARR, all B2B SaaS, by the way, and then keep them until they are around somewhere in that 5, 10 range and then let those other growth equity firms who are better at doing this than we are, take them to the next stage kind of beyond that. You mentioned Primordial as well. I know you'll talk to Jen. But really then a couple of years later after we started Jurassic, we also realized, hey, there's also a bit of a gap in the very, very early stage side. So kind of the opposite of Jurassic, where we make few investments and are super, super active in each one. Primordial is going to make lots of little investments. They average one a month. Is the, is the goal. Started off in the triangle, now it's kind of broadly gone into North Carolina. But that's really the very, very early, call it pre seed type of range where they're looking to get more companies started into that next stage and then let them go from there. Generally speaking though, Jurassic and Primordial are kind of in different wavelengths.

00:07:24 - Scot Wingo
Yeah, yeah, I think that's smart to have kind of a family of funds that cover different parts of the life cycle.

00:07:29 - Kevin Mosley
That's right.

00:07:30 - Scot Wingo
So. So you guys are like a concentration fund, which usually means you're going to write like lots of, you know, not a lot of, but bigger checks and be heavily involved, meaning board seat, maybe even like, you know, I know you guys have some office space. You'd love people to kind of co locate in there if possible, those types of things. Do you have a check size? Like if someone Says, what's your check size? Like, what's your answer to that question?

00:07:54 - Kevin Mosley
Yeah, sure. This is one of the things that kind of makes us unique is that we seem to write what we think is kind of one of the smaller check sizes for the level of involvement that we get into. We have a $30 million fund, so our goal in that being to invest in eight to nine companies. So generally speaking, that means we will want to eventually write somewhere in the $3 million range, call it 3 to 4 million dollars into each company, but we can do that over time. So typically our initial check size is going to look somewhere between 1 to 3 million, and then we still have some room to be able to follow on from there. And then we also have a really active LP base who are mostly made up of kind of previously exited entrepreneurs in the area who all really enjoy this too and want to be active. So they're happy to write checks later on as well. So we can, we can take them a lot further.

00:08:41 - Scot Wingo
Yeah, very cool. And then I know it's early and the fund's not like super old, but you have had two exits. Congrats on that. Thank you. You know, and I usually ask, what's your most successful investment? But you have kind of two to pick from, so maybe I won't put you. That's like picking your favorite child, but, you know, maybe walk people through, you know, your investment expectations. So you guys are looking for, you know, some, some firms say everything has to be a return in the fund. Other people say we're, we're looking for 10x outcomes. How do you guys think about that?

00:09:12 - Kevin Mosley
Yeah, so we look at the making the Fund or the 10x outcomes as being a little bit more of the venture mindset versus the growth equity or private equity mindset, which is a bit more like. Like we do, which is we're looking for enough ownership to make our activity worth it, which doesn't have to be a ton. Right. These are minority stakes. These are, I'll call it somewhere in like the 20% range or so is what we kind of want over time. And in those cases, you know, we're looking for consistent returns. So that'd be somewhere between. Call it like 2 to 5x type of returns for us. And listen, if we end up getting a 10x out of that, I'm certainly not going to complain. But that's not our goal. Our goal really is to be the active board member, active investor from the time that they are in that whatever 1 to 5 stage. When we get in until they hit 10 million. And then from then on out we may still hang out, but we're no longer going to be the most active investor. We hope that someone else kind of above us on that growth equity food chain will come on down and kind of take them to the next promised land.

00:10:17 - Scot Wingo
Yeah, and you guys, the two exits are worked of which was just announced yesterday. And then Rubrik, were those ones where Strategic's bottom or was it more of like a private equity firm that kind of drove the exit there.

00:10:28 - Kevin Mosley
So both of those were PE backed strategics that bought them. So one Rubrik was bought by a company called Align, which is backed by Rubicon and then worked of was bought by Quantum Workplace which is backed by LLR Partners. So yeah, that's kind of, I think that's probably going to be the most often that we see. I think some of our companies may end up getting bought by those growth equity firms and become a platform play where they then get to go tuck in other acquisitions underneath them. Or like in these cases, this made sense where our companies made a ton of sense to be kind of tucked in underneath someone else's platform.

00:11:03 - Scot Wingo
Yeah, a big playbook in private equity is like, you know, getting a company in a space like Ed Tech or HR Tech or something and then like adding in a bunch of other companies to build up the suite and the scale of the company and get economies of scale from, you know, the common admin team, engineering team and so on and so forth. Yeah, interesting.

00:11:22 - Kevin Mosley
Right on.

00:11:24 - Scot Wingo
So you've probably seen an ungodly number of pitches. What's your advice? And you know, again these are going to be. You're usually seeing a little bit later stage but you know, pitching is pitching. What's your advice for most of these are going to be first time founders on pitching do's and don'ts that you've seen.

00:11:41 - Kevin Mosley
Yeah, sure, I see a lot of pitches. You're right. I also do enjoy early stage pitches, even though that's not necessarily what we invest in. Part of it is we do like to get to know companies long before they become in our profile and kind of hit all of our checkboxes. So what I enjoy seeing things that I kind of some do's and don'ts. The biggest do that I see is if you have traction and if you actually have, you have some successes, call them out early. Because one of the biggest concerns that investors have is when we'll get all the way down into a presentation and we have no idea whether or not you've actually Sold anything or you've actually kind of gotten to some type of successful outcome that that would anticipate, like, oh, this is more relevant for me, the investor that's, that's watching this pitch. So the kind of earlier that you bring that up, I think the better. The other side of it is, you know, find what is a reasonable story for this audience. I see people get so many words on slides. They're getting into the, hey, this is the two hour fully detailed pitch that you're about to give to a few investors. And whatever it is, a two or three or five minute pitch, whatever it may be. And you're trying to get through so much stuff because you're so passionate about what you do, you kind of have to bring it back a little bit and understand that, hey, listen, your whole goal of the pitch, usually in the kind of the pitch style competitions or this earlier, the earlier stage stuff, is to just get a second conversation. In the second conversation, they can start to dig into all the details. You can show off exactly how you protected your ip, exactly how you have cornered the market in whatever way it is. But at this point, you're just trying to get people excited enough to be able to have another conversation with you. So I'd say the biggest don't, in that case is don't put a lot of words on slides because we're going to be reading those words, trying to process all this information and by the end of it, I'm going to say, oh my gosh, I have no idea what I just saw or heard. I'm not going to move forward with that.

00:13:49 - Scot Wingo
Yeah, awesome.

00:13:51 - Kevin Mosley
Cool.

00:13:51 - Scot Wingo
Any other final words for folks as we wrap up?

00:13:56 - Kevin Mosley
No, I'm really excited to, to get to see some pitches and get to see everybody and yeah, thanks so much for, for participating.

00:14:03 - Scot Wingo
Yeah, yeah, thanks for doing this. We appreciate it. And we will see you live in the studio. Hopefully you'll be feeling better. It's a couple weeks away, so you have plenty of time to heal before now and then. Thanks for being on the selection committee. We appreciate it.

00:14:15 - Kevin Mosley
Awesome.

00:14:16 - Scot Wingo
Of course.

00:14:16 - Kevin Mosley
Thanks so much, Scott.

00:14:20 - 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 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.