Committed to Irish “Can Do”
The english language expression “It’s as plain as the nose on your face” means that something is obvious, perfectly clear to see.
Have you ever noticed, though, that your nose is practically invisible to you? It’s only fairly obvious to everyone else. In fact, many things that should be obvious take time to “see”, or can only be seen from a different perspective.
SOSV, which originated in the United States in 1994, has a history of finding, investing in and supporting Irish companies since the formation of SOSventures Investments Ltd in Ireland in 2007. To date, we have invested in excess of $35 million in twenty companies in Ireland. However, up until 2013 we had not established a specific fund focused entirely on Ireland. So in 2013 we set about changing this and founded the SOSV Ireland Fund.
It was also obvious to the team that we should use the same iterative investing methodology that has proved successful in the past. SOSV has an incredible track record of investment returns since 1994 and the returns since the establishment of SOSV in Ireland are similarly impressive. Returns over the past 20 years, and in any 10 year period since 1994, put SOSV in the top 5% of VCs worldwide, and most probably in the top 1–2% of VCs (unfortunately for our bragging rights, available data doesn’t break the performance of others down more precisely).
A New Breed of VC
SOSV team members have also created world-leading trends (street mapping on computers, cloud computing, Coderdojo, apps for ridesharing, hardware accelerators) and have invested in game changing innovation at the earliest stages. A big part of our not-so-secret “sauce” is that we don’t just talk about smart money, we actually offer a range of support services such as:
- business coaching and management training,
- product/market fit mentoring,
- financial outcome follow-up and follow-through,
- industrial, electrical and mechanical design assistance for hardware & physical products,
- sales & marketing mentoring,
- component and sourcing support,
- assistance in distribution.
Rarely for a VC, we actually have 3 times as many portfolio support staff as investment staff. We keep up this tradition with the SOSV Ireland Fund.
Give Before You Get & Giving Back
Few institutions or organisations have shown the dedication and leadership to affect the transformation of infrastructure to support the next generation of startups that we have at SOSV. From starting Coderdojo to leading the Open Ireland “tech visa” initiative, we have paved the way for a long term path of renewed competitiveness in Ireland.
Just this spring, SOSV and the O’Sullivan foundation successfully revitalized STEM education in Irish primary and secondary schools via the Khan Academy and the Mathletes challenge. The efforts in this area introduced a remarkable new model that could transform engagement of how students learn Maths in Ireland and the world.
Why We Are Different
Yet although our goals are greatly aligned with those of Ireland itself, we have a number of other factors that makes us different from many other Irish and European VC firms and institutions:
No fees are charged to our Investment Companies
We don’t believe in charging monitoring fees, “directors fees” or whatever other fees that others attempt to justify. We want to add value to our Investment Companies, not extract value on an ongoing basis. That’s right. Zero ongoing fees yet we provide significant ongoing support!
We pride ourselves in actively assisting our Portfolio Companies
We don’t invest the funds and then sit back waiting for a return. Our support team is tasked to help our companies. We work directly with the management team on an ongoing basis to develop their leadership and to position companies for growth. We provide follow-on funding to portfolio companies that keep their promises, often even despite the inevitable stumbles that every startup faces on the journey to product/market fit. We aren’t a “one-and-done” investor, like the typical angel funder and many early stage seed funds.
We are a Global Investor
SOSV has operations in China, the US and Europe. We run accelerator programs throughout these regions, filled with entrepreneurs from Ireland to Iran, from Argentina to Australia, from Romania to Rome, from Canada to California. With deep connections in many countries, we can help our companies leverage international supply and distribution chains. Just two months ago, Technode, the manager of TechCrunch China, declared HAX (SOSV China’s flagship hardware accelerator and investment fund) as the leading institutional investor in China (beating out the short list of such big US/China brand VCs such Sequoia, Matrix, and IDG).
Of course, the primary responsibility for advancing any startup company lies within the capability and talent of the staff of that company… and the customers the founding team is able to draw to itself. But we are uniquely capable, amongst most VCs, of helping on the second and third stages of growth.
Like most VCs, SOSV operates under the following strategy, globally:
- Invest in markets that we know and understand,
- Identify novel technologies and market entry strategies that are disruptive and scalable,
- Invest in companies where the entrepreneur (and their team) has the energy, vision and talent to build a successful company,
- Assist in determining the appropriate business model and strategy,
- Work with management teams to develop their leadership in line with both business goals and individual strengths,
- Ensure that the companies are positioned for rapid growth, in terms of both management and product.
Unlike many VCs, SOSV typically targets companies that are the first to pioneer their market segment, in areas that are strategic and poised for long-term disruptive growth due to societal or technological megatrends.
We do not invest in “me-too” companies, and we very rarely consider geographic niche products (eg., the Chinese “GroupOn” or the Indian version of “Hailo”.
Since its inception last year, the SOSV Ireland Fund has invested in four companies that match our criteria and we foresee many further investments over the 12 year term of the SOSV Ireland Fund. SOSV worldwide invests in about 60 companies per year, so our investments in Ireland are disproportionately high compared to the population of Ireland. We do think there are excellent opportunities that are being pioneered for the world stage, developed right here.
Recently, SOSV has started a world-first Synthetic Biology Accelerator program in Cork, Ireland, SynBioX. Like all of our accelerators, most of the successful applicants come from all over the world, and in this case 20% of the teams come from right here in Ireland. We are in the unique position of being able to invest in both Irish companies from our Irish fund and International companies from our international fund.
With SOSV, we aim to support the very best global countries in our focus areas, and we can help Irish companies both here and as they expand worldwide.
It’s as plain as the nose on your face!
Originally published at sosv.com on May 27, 2014.