As we continue our run on legendary VCs, we feature today Bruce Cleveland, an entrepreneur, executive, venture capital investor and best selling author of Traversing the Traction Gap. We have a fun and insightful conversation today about the state of enterprise tech and why its the best place to create enduring value. We also touch important points on digital transformation and a lot more!
Joining our list of legendary VCs that we have featured on Follow Your Different is Bruce Cleveland. He joins Randy Komisar (Episode 106) and Heidi Roizen (upcoming episode). He is the founding partner of Wildcat Ventures which has been rated in the top 1% of enterprise technology investors on the planet.
At the moment, he is taking up his Masters Degree at John Hopkins University, America’s first research university. He took up Digital Communication, which he feels would be beneficial for writing content for his succeeding books.
Enterprise Tech Scene
Bruce shares a number of important insights into the enterprise tech scene. Furthermore, he shares that the valuations of companies of public SAS companies or tech companies selling into enterprise using a subscription model are reflective of the enduring value.
Additionally, he cites examples of consumer companies that require a tremendous amount of capital, as opposed to enterprise companies, which require much less.
“Consumers require so much capital, not a fund to build a product but to build the market share.” - Bruce Cleveland
Enterprise vs. Consumer Company
Bruce shares what investors are looking for enterprise and consumer companies. The MOIC or The Multiple On Investment Capital is nominally better in an enterprise. However, he mentions that the issue is these enterprise companies take longer to build up.
“You don't get those big mark up in the first 2 years, as the company began to scale and show minimum viable traction. The important part here is a lot of limited partners, people who invest in venture firms. They want to see early mark up in your funds.” - Bruce Cleveland
These investors want to see great markups to show the committee that the firm is of great financial health. However, they don't inform the committee how much money they need to get the company “out of the door.”
“They are extraordinarily capital intensive, and the multiple uninvested capitals are high. A lot of these things are faddish. They may work initially, I don't know, they can move in other areas. Then they'll be okay, but a lot of times, these things can come and go.” - Bruce Cleveland
To hear more about the Top 1% of Enterprise Technology Investor Bruce Cleveland, download and listen to the episode.
Bruce Cleveland is a Founding Partner at Wildcat. He focuses on investments in AI marketing, EdTech, enterprise software as a service (SaaS) and the Internet of Things (IoT).
He’s also the author of Traversing the Traction Gap.
His specific areas of interest include enterprise automation, education and training, and general business applications. Bruce likes working with early-stage companies that use technology and data to increase revenue and decrease costs.
An avid adventurer and sailor, Bruce enjoy the challenge of creating new companies and navigating new markets.
He is interested in growing entrepreneurial hubs outside of Silicon Valley, with a particular focus on the Pacific Northwest.
Bruce also is committed to sharing his knowledge and experience through the Traction Gap Framework. This aims to help entrepreneurs navigate the critical go-to-market period between initial product release (IPR) and reaching minimal viable traction (MVT).