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Ryan Sweeney, a general partner at Accel, joined the firm in 2008 to focus on growth investments. He became the first outside investor and board member at enterprise software companies including Atlassian, Qualtrics, and Squarespace.
Below are some of Sweeney’s thoughts on investing, industry trends, and the future of cryptocurrency.
FORTUNE: Your investments include Braintree/Venmo, Airwatch, and Atlassian. What are some of the key elements you always look for in a founder/company before investing?
SWEENEY: Conviction around the management team. At its core, venture investing is about investing in people. Business plans will evolve and markets will shift, so gaining comfort with those risks is often dependent on having confidence in the team running things. We’re looking for teams that can not only eloquently pitch their companies but that are also genuinely thinking about where they need help.
How is Accel thinking about blockchain tech and the hype around ICOs?
Venture capital is not a spectator sport. We take the time to build relationships with entrepreneurs, often treating them like a partner years before investing. When we do invest in a company, we’re committing far more than capital — we’re also committing our firm’s time, energy, and network.
Claims that venture is overcrowded and outdated aren’t new. Crowdfunding platforms and a proliferation of new seed funds prompted a similar debate several years back. We’re conscious of these arguments and potential new competitors, but many of them seem to equate venture investing to random stock picking, which isn’t consistent with our approach. We’re navigating today’s venture environment the same way that we have for over 30 years — we are looking to back exceptional people tackling real problems in compelling and innovative ways.
Based on all the pitches you and Accel have received since the beginning of 2017, what are some trends you think Term Sheet readers should be paying attention to?
There are still great technology companies being formed across sectors and geographies. As you pointed out earlier, the prevailing narrative around private tech investing right now seems to be fairly negative. Looking under the headline figures citing record venture investment levels and round sizes, we’re seeing an increasing number of companies come to market with both a large strategic vision and a commercial focus from day one.
What’s an example of a company like that?
MessageBird, which was bootstrapped for six years and is competing very successfully around the world — and will hit a $100 million run rate by end of year. LightSpeed also exemplifies this scrappiness. Prior to taking on external funding, their team was also bootstrapped for five years and grew revenue 2,000% in that time. While we’re always conscious of valuation, we’re also enthusiastic about the operating profiles of many tech companies we’re seeing today.
What’s the best business advice you’ve ever received?
Don’t overthink things. It’s easy to lose sight of this in tech, but some of the best companies we’ve backed at Accel are built on fairly simple ideas with well-executed business models.
