SaaS Ventures is a venture capital firm that has carved out a niche for itself by seeking opportunities in out-of-the-way places where startup ideas flourish and there is an intense need for investment. Founded by Collin Gutman, the firm focuses on early-stage deals in areas such as healthcare tech, cybersecurity, and enterprise software.
Origins of SaaS Ventures
Gutman’s time at Acceleprise exposed him to startups with good ideas that were starved for capital because they were located outside investment hubs. He realized that these companies had a real core business problem to solve but couldn’t get attention from traditional VCs due to their location.
Focus on Emerging Markets
SaaS Ventures has focused on emerging markets, particularly in the Midwest and Southern United States. Chicago has been fantastic for Gutman, who cites its thriving tech scene and access to top talent at local universities like Northwestern and UChicago. Other notable areas include:
- Southern California (LA): While LA is a hotbed of consumer tech, it’s often overlooked as an enterprise tech hub.
- DC-Baltimore area: This region has been phenomenal for cybersecurity and healthcare tech startups.
Success in Smaller Cities
Gutman believes that smaller cities like Bozeman, Montana, and Green Bay can be great places to find innovative ideas. These areas often have active industries with a deep understanding of the local market, making them ideal incubators for new ventures.
Deals and Exits
SaaS Ventures has made over 60 investments in Fund One, with an average deal size of $200,000. Gutman expects to make around 80 investments in Fund Two. The company has already seen three exits, including Ataata’s acquisition by Mimecast for around $25 million.
Industry Insights
- Seed investors take a long view: Gutman emphasizes that seed investors need to be patient and willing to take calculated risks.
- Enterprise tech is underserved: Despite its growth potential, enterprise tech remains an underinvested sector compared to consumer tech.
- Regional innovation hubs: SaaS Ventures is finding success by tapping into regional innovation hubs outside of traditional hotspots like Silicon Valley.
Conclusion
SaaS Ventures’ approach to investing in emerging markets and supporting innovative ideas from underrepresented regions has yielded impressive results. As the venture capital landscape continues to evolve, firms like SaaS Ventures are poised to play a significant role in shaping the future of enterprise tech.