Friday, December 30, 2016
Reflections on 2016: Jeb Spencer, TVC Capital
Story by Jeb Spencer
All this holiday season, we have been sharing the reflections on 2016 from the movers and shakers in Southern California's technology ecosystem. Here, we have the thoughts of Jeb Spencer of TVC Capital (www.tvccapital.com), a software focused growth equity fund, and has had some great success in the market. TVC Capital has also been a big supporter and sponsor of socaltech over the years. You can see all of our holiday reflections here.
What's was biggest news from you or your firm this year?Jeb Spencer: We closed our nineteenth and twentieth software focused growth equity investments this year, a significant milestone for our firm. Every now and then we feel like we are finally starting to get a hang of this investing thing -- though the feeling doesn't always last very long.
Our twentieth deal was a $15 million growth equity investment in Seattle based software firm BitTitan, currently rated the number one place to work in Seattle. But before you think of moving out of SoCal, our 19th deal also closed in 2016, and this was a growth equity investment in Brentwood based Docupace Technologies. An interesting investment for our firm, the $16.5 million transaction involved buying Docupace back from the scandal ridden, failed public company RCS Capital (RCAP). RCAP had purportedly valued Docupace at over $75 million when they acquired a majority interest in the company in September 2014. We are excited to be working with the Docupace team and our co-investors – “long-time friends of ours” at Palisades.
Another achievement in 2016 was the sale of our Irvine based portfolio company, Digital Map Solutions. Special thanks to our CEO Jim Skurzynski and the Digital Map team and my business partner Steve Hamerslag for their hard work getting the deal to, and over, the finish line. It was a fantastic run.
What's the biggest lesson you learned this year?
You can have the best product, the most relevant strategy and the most defensible industry position, but whenever you have the wrong people in the wrong seats at your leadership table, you just simply can't and won't succeed. There is just no way around it. While some CEOs resort to extreme measures to solve the problem, this is not recommended.
What's your favorite technology gadget, device, or innovation you ran across this year?
Jeb Spencer: Although I spend all my time in software, I am completely enamored with the work that is being done at San Diego based genetic research firm Illumina. The impact that Illumina has had in the San Diego area over the last five years cannot be underestimated. Illumina has infused a great deal of energy into the community and has helped attract a large number of brilliant people to San Diego.
In 2016, Illumina announced a new venture called Grail which plans to develop a blood test by 2019 to detect all cancers at their early stages. Grail will use Illumina's gene sequencing technology and is backed by $100 million from some very smart money including Bill Gates and Jeff Bezos. While many have tried this before and failed, the collective team, which also includes Memorial Sloan Kettering (the NYC hospital that saved my Dad in the 1980s), is so impressive that I am guessing they will be a success and save millions and millions of lives in the process.
Finally, what do you think will have the biggest impact on the technology industry in 2017?
Jeb Spencer: The chaos we will likely see projected out of DC in 2017 is sure to be some of the greatest political theater of modern times. We should expect the unexpected, because that is what is coming, likely in a way that is hard for us all to fully comprehend right now. A President who has not held elected office with cabinet choices that include nominees with active lawsuits against the agencies they've been nominated to head, are sure to try to upend things in ways that will leave some in complete and utter shock. Some of these changes will impact our tech community, but it will hopefully mostly be a distraction, for the first year at least. The changes we do see will require flexibility and adaptability and will ideally create new opportunities in many industry sectors.
While the election is still understandably hard for some to accept, the data shows a surprising surge in overall country optimism since November and the country is increasingly bullish and upbeat. Optimism yields risk taking. Risk taking yields innovation. Innovation yields new companies looking for capital to grow, so we are hoping for an exciting and active year. Let's just hope it is all more like morning in America and not just a house of cards.
Jeb Spencer is the Co-Founder and Managing Partner of TVC Capital, a growth equity firm focused on the investment in and acquisition of business critical software companies. TVC is currently investing their third fund and has over $235 million under management.