Anniversary Time!
by David Matthews
It’s hard to believe, but 10 years ago this month I founded Trailblazer Capital and 5 years ago this month I founded what’s now RevTech Ventures. To quote the Grateful Dead, “what a long, strange trip it’s been.” Lots of great lessons learned, with more to come!
Trailblazer began in August 2006 with a $5 million in commitments from me, members of the Wyly family, and several of my entrepreneur friends. Michaels Stores had just been taken private in a $6.5 billion transaction led by the Bain and Blackstone PE funds, so the timing was good, or so I thought.
In 2007, I made the first 4 Trailblazer investments, just in time for the recession of 2008/09, in which 3 of those 4 investments perished. I got lucky on the 4th thanks to an acquisition just 8 weeks after we invested! In 2008, I recruited Joel Fontenot out of Cisco Networks to join me and to turn Trailblazer into a real micro-VC fund. We raised another $5 million, which funded a couple of Joel-led deals, one of which was a hit and enabled us to raise a $25 million second fund in 2011. We’ve now made 10 investments with that fund, several of which are well-positioned for great outcomes.
Here’s a few of my best lessons learned:
- Persistence wins the prize. Like entrepreneurship, venture investing is a marathon sport and requires perseverance.
- With startups, it always takes twice the time and money to get to results.
- Sometimes you do get lucky!
- Alignment of interests between investors and managers is an elusive, but vital goal.
- A great management team with a good idea trumps a good management team with a great idea.
- Resourcefulness is key for micro-VCs and for start-ups in Texas; funding is thin, so you have to figure out how to get $20 of output for every $1 of input.
- A network of mentors and connectors is equally important to a network of investors.
I can’t wait to see what the next 10 years have in store for Trailblazer and RevTech Ventures!