It’s 2016 — the year of the scale-up. Venture capitalists from coast to coast are on the hunt for investment opportunities with relatively young, rapidly emerging, innovation-driven companies that could be the next big success stories.
High Alpha, an Indianapolis-based venture studio focused on enterprise cloud companies, is one such investment firm keenly aware of the scale-up process and unlocking the potential of fledgling software companies. The four founders each had a hand in some of Indiana’s biggest, most talked about successes of the past decade (and still do).
As part of their ongoing Speaker Series, High Alpha welcomed Scott Maxwell to their downtown Indianapolis offices. Maxwell is the founder and managing partner at OpenView Venture Partners, one of the nation’s leading expansion-stage software-as-a-service (SaaS) investors.
Maxwell discusses what OpenView looks for in a Series A investment as well as what SaaS metrics matter. He also speaks highly of the technology community in Indiana stating right off the bat that, “Whenever I come to Indiana, I get high energy people who are just nice. Its a really infectious thing.”
Maxwell feels that the big question for venture capitalists is, “Should we make this investment?” Specifically at OpenView, Maxwell focuses heavily on the question of, “Could this company reach 100 million dollars in revenue?”
The key criteria for evaluation of a potential investment that Scott Maxwell outlined in his presentation include:
- Market Size
- Sustainable Competitive Advantage
- Economic Growth
- Top Line Growth
- GAAP Financial Results
- Management Team
- Liquidity Options
While these scale-ups may be just that — smaller companies on the rise — Maxwell emphasizes that bigger doesn’t always mean better.
“The difference between a big company and a great company is company culture,” Maxwell said.