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20VC: Bessemer’s Byron Deeter On Lessons From Investing in 14 $Bn Companies, What The Heck Is Going On In Cloud Today and Why Cloud IPO Floodgates Are About To Burst Open

Jul 8, 2019

Byron Deeter, a Partner at Bessemer Venture Partners, has an impressive track record with 14 investments soaring past $1 billion. He discusses the current cloud landscape and shares insights on why he believes a surge of cloud IPOs is imminent. Byron reflects on the evolution from founder to investor, emphasizing the importance of market cycles and strategic foresight. He also warns against the rising multiples in the sector and highlights key lessons for founders to succeed in today's dynamic ecosystem.

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ANECDOTE

From Founder to VC

Byron Deeter's path to VC started as a founder of an early cloud business, Trigo Technologies.
Trigo was acquired by IBM, leading Deeter to join Bessemer Venture Partners, where he had previously raised his Series A.

INSIGHT

Market Timing

Great companies emerge in all market conditions, so avoid market timing.
Focus on strong teams and ride macro trends like cloud computing.

INSIGHT

State of Cloud

Incumbent cloud providers are reacting defensively to the rise of Amazon Web Services.
A second wave of pure-play cloud companies is emerging, benefiting from changing market dynamics.

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Byron Deeter is a Partner @ Bessemer Venture Partners where he has established himself as one of the leading investors in SaaS and Cloud authoring the iconic laws on the state of cloud computing. In terms of track record, fourteen of Byron’s investments are valued above one $1 billion, including eight IPOs and counting. Byron's investments include the likes of Twilio, Intercom, SendGrid, Gainsight, Box, DocuSign and many more. Prior to the world of venture, Byron was a Bessemer Founder raising his Series A from them back in 2000 with Trigo Technologies. The company rapidly scaled to profitability and was acquired by IBM.

In Today’s Episode You Will Learn:

1.) How Byron made his way into the world of venture from founding Trigo Technologies and selling to IBM in 2005? How have seeing multiple booms and busts impacted Byron's investment mentality today?

2.) What the heck is going on in cloud today? Is Byron concerned by the very rich multiples being paid in the ecosystem today? How does Byron think about how public market performance impacts his day to day role investing? Why does Byron believe that the floodgate for cloud IPOs is about to burst open?

3.) Having seen so many cloud IPOs, what should founders take from the lessons of those that have already been so successful? With 14 $Bn companies, what does Byron attribute his investing success to today? How does Byron think about what he wants to invest in today? Are we in an entirely new wave of cloud?

4.) As a former founder, how does Byron think that he engages differently with founders than more financial backgrounded VCs? What can board members really do to build that trusted relationship with the founder in the early days? Is it good for founders and board members to be friends? Is there a line of professionalism that has to be drawn?

5.) How has Byron seen his style of board membership change over the last decade? What would his advice be to someone who has just gained their first institutional board seat? What does Byron believe makes the best board members? What founder he has worked with most excels when it comes to board management? What made them so extraordinary?

Items Mentioned In Today’s Show:

Byron’s Fave Book: AI Superpowers, Legacy

Byron’s Most Recent Investment: ScaleFactor

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