ISSUE – Jan. 26 | Cowboy Ventures – Five Year Update

The Cowboy Team – We Think Different
I had a vision to be a small but leveraged team that ‘punches above our weight’ in helping the companies with which we work. Joanne joined our investment team after wowing us with her work while still in grad school; we are a small, nimble investment team that hopes to provide provide best-in-class value for our portfolio companies. To bring even more expertise to startups we also leverage a small team of world-class operating partners (called ‘ninjas’ on our website) who are startup savvy and advise based on their experience scaling successful tech companies like Facebook, Netflix and Intel. 

Two years ago we added a talent partner, Michelle who works on-site at portfolio companies to help build their teams (think we were the first seed fund to offer this).

One of the most common needs for seed-stage companies is with adding the right next people, and building a super effective recruiting culture. This is what Michelle does – help with organizational plans, to prioritize hires, and recruit awesome and diverse team members, while being on-call for HR and recruiting-related questions for our whole portfolio. 

The Cowboy Family: 55 companies, $4.1Bn in value, 12 liquidity events
Since founding we’ve invested in 55 amazing companies. Some stats on what kinds of companies we’ve invested in and how things are going:

  • 80% of our first investments have been in seed stage companies, usually raising rounds of $3m or less. The other 20% include initial investments in series A companies (like LendingHome, Crunchbase, Brava and Philz Coffee), and even a series B (not yet announced)
  • Our active portfolio companies are on average 3.2 years old
  • 65% of seed companies had a working prototype when we invested; 35% had thoughtful plans, but had not yet build a working product  
  • 42% of the companies we’ve backed sell to enterprises; 58% are consumer-oriented
  • 20% of our portfolio companies are still seed stage. Their average seed raise has been $2m
  • 64% of our portfolio companies have raised a series A; their average series A has been $8m
  • 29% of our portfolio companies have raised a series B; their average series B raise has been $19m
  • 9% of our portfolio companies have raised a series C or D
  • None of our portfolio companies are profitable yet. A number plan to achieve profitability in 2017; and even more plan to be profitable in 2018
  • Cowboy-backed consumer companies raised $12m thru series A; as have enterprise-oriented companies (the ‘capital efficiency gap’ between consumer and enterprise companies in our 2013 analysis may have closed)
  • Dollar Shave Club was our first investment from Cowboy Ventures I, hopefully a harbinger of more good things to come – thank you team DSC!  
  • In addition to DSC, 20% of our portfolio companies have been acquired by companies like Google, SolarWinds, OneMedical and AngelList
  • Just 2 of our 55 portfolio companies have decided to wind things down, likely a lower than average ratio for a venture fund. Might mean we should be making more risky investments; or that our portfolio companies have been uncommonly good at raising follow-on rounds; or it’s too early to tell and this stat doesn’t mean anything
  • 2 of our active portfolio companies have successfully pivoted, changing their mission to pursue a different product or customer since funding

Founding team backgrounds

  • 82% of our portfolio companies have co-founders; 2.3 co-founders on average
  • Of companies with co-founders, 67% had previous history together via work or school
  • 60% companies had a technical founder on board at founding; 67% of enterprise oriented companies and 56% of consumer oriented companies
  • 33% of Cowboy-backed companies have a woman co-founder  
  • Founders were 34 years old on average at founding (ranging from 19 to 62!)
  • 75% of companies have at least one founder who had previously started a company of some sort 
  • 83% of companies have at least one founder who worked previously at a tech company
  • 17% of companies have at least one founder who dropped out of college
  • About half of our companies have at least one founder who is an immigrant