“Doubling Down” is a new series where we hear from top B2B SaaS investors on their most recent activities and takes on the current market. Kicking us off is Jay Levy, Managing Partner at Zelkova Ventures.
#1. What’s your most recent disclosed investment? Why did you do the deal?
We recently invested in Respondology. The company provides a platform for brand and audience protection via social media comment moderating. The company focuses on moderating and removing hate, toxic, damaging, and spam comments from a brand’s online presence across the major social media platforms. Foremost, we invested in the company as they put together a world-class team with experience and knowledge in the space. Secondly, they built a product that is in the market with significant traction.
#2. What’s your sweet spot for investing — check size, stage, type of deal? And how big is your current fund?
Our sweet spot are companies that are raising between 1-3M dollars, early stage, typically between 100K and 1M ARR Our typical check size is 200-300K with reserves of 2-3x that We are solely focused on B2B SaaS companies and tend to focus on horizontal products that can “help businesses do business better”. Our current fund is 15M.
#3. What’s the #1 bit of advice you’d give to SaaS founders today?
Focus on the customer and drive revenues – sales solve all issues. In today’s market investors are keen on companies that can be incredibly capital efficient and have significant runway to get to break even.
#4. What’s your pulse check on the venture markets right now, today?
Deals are still happening, but the cadence is significantly slower than in previous years. Deals that are being syndicated across multiple investors are taking several months to get done. The FOMO by investors we saw in 2019-2021 no longer exists. Obviously, this is both challenging and frustrating to founders but ultimately, they will wind up with investors who have really done their diligence and are fully committed to helping them succeed.
#5. What’s different about your fund / how you invest and support founders?
Unlike other early-stage funds, we do not take a spray-and-pray approach. We typically invest in 6-8 deals a year and reserve significant follow-on capital for these companies. On average, we’ve invested 3x in each of our companies, with the highest being 6x an initial investment to one company.
#6. What’s an “exit” you’re particularly proud of?
Obviously, the exits that we’ve made over 100 our money are incredibly exciting, but realistically, we’ve had over 35 exits, and they have all been exciting in their own way. Building a company is extremely hard, and being able to see founders succeed and have life-changing outcomes for their teams is incredibly rewarding, especially when the odds are against you.
Jay Levy is Managing Partner of Zelkova Ventures. Jay focuses most of his time working with the current portfolio companies and looking at new investments in the software-as-a-service, Internet media and green tech space. Since 2014 Jay has invested in over 90 startup companies with 35 successful exits. Some notable investments include Alloy, Automox, Broadlume, Crimson Hexagon, Customer.io, Encoding.com, Helpscout, Hungryroot, Klout, Lendkey, Locus Energy, Podia, Rapportive, Simplecast, Stitch, Superhuman and Vitally.
Jay launched his entrepreneurial career while in high school with his first web-services firm, providing web development services to early-stage companies. After high school Jay moved to New Jersey to attend Rutgers University, where he studied finance & political science. While at Rutgers he helped to launch uconnections.com, an Internet portal for college students merging the office campus community with the dorm. While still in college Jay went to work for Morgan Stanley working on the development of their separately managing account business. After leaving Morgan Stanley Jay helped to launch MPI Professionals, a New York based financial service consultancy, which was later acquired by a publicly traded multi-national.
Jay has been a recipient of the Crain’s top 5 Entrepreneurs to watch in New York and received the 40 under 40 Award from Westchester County. He has also been a mentor to Techstars for over 10 years and is currently an LP is several other venture funds.
Jay resides in Miami. In his free time he enjoys playing golf, tennis, fishing and running.
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