Building boldstart ventures from $1M to $850M with Ed Sim

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Jun 20, 2024

Founder Ed Sim discusses inception stage investing, themes boldstart invests in, the 5 P’s of early stage investing, importance of board members, fundraising challenges, building customer relationships, and the evolution of boldstart ventures from $1M to $850M AUM.

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INSIGHT

Inception Investing

Inception investing supports founders from idea to early stages.
It provides funding and guidance, de-risking ideas before incorporation.

ADVICE

The Five Ps of Investing

Evaluate startups with the "Five Ps": problem, product, people, passion, and possible.
Focus on massive pain points, unique insights, strong teams, founder obsession, and potential.

ANECDOTE

Snyk's Success Story

Ed Sim backed Guy Podjarny's Snyk, initially focused on developer-friendly security.
Despite starting in a niche market (Node.js and JavaScript), Snyk grew significantly.

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Ed Sim is the Founder of boldstart ventures, which partners with bold founders reinventing the enterprise stack at the inception stage. Ed takes us inside the journey building boldstart, from its first $1m fund in 2010 up to $850m in AUM today.

Timestamps: (00:00) Intro (03:48) Evolution of early stage investing(05:11) Inception stage investing (10:32) Backing bold founders reinventing the enterprise stack(11:20) Repeatable ways to build enterprise businesses (12:04) The 5 P’s of early stage investing (14:12) Backing Guy Podjarny and Snyk (18:18) Knowing when to follow-on (19:18) The 3 Ch's of a good board member (22:01) How Ed’s board role changes over time (24:20) Balancing founder friendly with returns (27:20) How to build customer relationships (30:24) Advice for closing customers (33:47) Creating the Seed category in 2009/10 (37:31) boldstart’s $1m Fund 1 (39:00) Why Ed didn’t join a large firm in 2012 (39:55) boldstart’s $16.5m Fund 2 (40:26) Why LPs passed on the first funds (43:11) Leading rounds in Kustomer, Snyk, BigID, and Blockdaemon in Fund 3 (47:09) Why $112m Fund 4 was the hardest to raise(50:52) Ed’s approach to LP fundraising (55:12) Inside Meta’s acquisition of Kustomer and sale back to the founders (59:52) Backing Rahul from Superhuman a 2nd time (01:00:52) The different GTM playbooks (01:02:20) Importance of contract size and time to close (01:05:07) Why AI makes security more important (01:06:11) When to switch from founder-led sales(01:07:46) Backing ProtectAI after a conference (01:08:28) Balancing between inbound and outbound sales (01:09:55) Winners and losers in AI (01:15:26) Building the boldstart team (01:25:19) Lessons being an interim CEO (01:27:15) How ZIRP pulled revenue forward (01:29:08) The death of high growth software (01:32:58) Identifying startup opportunities incumbents won’t crush (01:35:00) Second order effects of AI (01:36:46) Using "Intuitive TAM" to size new markets (01:38:04) Investing before there’s a market map (01:38:57) Balancing family, fitness, and career

Referenced:

https://boldstart.vc/

Turning Down HBS: https://x.com/edsim/status/1315644287007240193

Ed’s tweet on raising Fund 4: https://x.com/edsim/status/1315644287007240193

Second Order Effects of AI: https://www.whatshotit.vc/p/whats-in-enterprise-itvc-379

Death of Hyper Growth: https://x.com/edsim/status/1797613384994623808

Where to find Ed:

Twitter: https://twitter.com/edsim

LinkedIn: https://www.linkedin.com/in/edsim/

Newsletter: https://www.whatshotit.vc/

Where to find Turner:

Twitter: https://twitter.com/TurnerNovak

LinkedIn: https://www.linkedin.com/in/turnernovak/

Newsletter: https://www.thespl.it/