Warren Weiss, fondly called “Bunny”, has an impressive track record of discovering tech giants in their early stages. He gained recognition for his work on SilverSpring Networks, which earned him a place on the Forbes Midas List of Top Technology Investors. Additionally, Business Insider magazine voted him as one of the Top 100 Seed investors. Bunny has had a successful career as a CEO of both public and private venture-backed companies.
In the early days of his career, Weiss was deeply involved in the software industry’s evolving landscape. He recounts, “I was in the software business before it was even called the software business.” Working for one of the world’s largest software companies at that time, he gained valuable experience in accounting and manufacturing and developed a profound appreciation for both technology and business.
A pivotal moment came when he ventured into Silicon Valley to collaborate with none other than Steve Jobs. “When I moved to Silicon Valley to work with Steve Jobs, I learned more about deep technology that allows you to build software,” Weiss recalls. This experience provided him with a comprehensive understanding of the intricate workings behind the technology that drives innovation, laying a solid foundation for his future endeavors.
Transitioning into leadership roles, Weiss went on to helm four public and private software companies as CEO, all of which were venture-backed. Through these experiences, he developed a keen interest in the world of venture capital. “I became intrigued with what venture people do for a living, with my own personal interaction while I was running these companies,” he shares.
Despite initially uncertain about pursuing a career in VC, Weiss found himself drawn into the fold when approached by Foundation Capital. Recognizing the value of experienced operating executives like himself, the firm offered training in investing in startup companies within the deep technology enterprise market. “It was fortunate that it was a great fit for me, and that’s how I launched my career in VC,” Weiss reflects on this pivotal juncture.
At WestWave Capital, Weiss and his team are driven by a singular goal—to become the foremost micro-VC firm in the industry. Specializing in seed and pre-seed investments within the enterprise sector, they leverage their collective experience as former operating executives with strong tech backgrounds. “Our goal is to be the #1 micro-VC,” Weiss asserts.
Central to their investment philosophy is the belief that building a great company starts with a great product. “We believe that the way to build a great company is to have a great product. That’s where we start,” Weiss emphasizes. Assessing factors such as market potential, the team’s ability to deliver, and core competencies in company management are paramount considerations in their investment decisions.
Furthermore, Weiss emphasizes the importance of evaluating the founder’s potential to lead the company effectively. “We have to think strongly about whether or not the founder can be a CEO of the company, short or long term,” he explains. Ultimately, the aim is to generate substantial returns on investment. “For every dollar we invest, how do we make 10 times our money,” Weiss outlines, underscoring the overarching principles guiding their investment strategies.
Unlocking Potential: The WestWave Approach
At WestWave Capital, the mission is clear: to invest in exceptional entrepreneurs and companies. Weiss emphasizes this core principle: “It’s as simple as that.” Yet, he acknowledges the inherent challenges and risks associated with their endeavors. “We spend a lot of time thinking about how to help our entrepreneurs and companies’ de-risk,” Weiss explains. This involves pivotal decisions such as strategic hiring, product launches, acquiring early customers, forging beneficial partnerships, facilitating fundraising efforts, and devising long-term execution plans—be it through acquisitions or initial public offerings.
But what specific criteria guide WestWave’s investment decisions? Weiss outlines key factors: a sizable market opportunity coupled with a stellar founding team. Additionally, the ability to develop unique intellectual property is paramount. “A company that can build unique intellectual property around their product,” Weiss underscores. Moreover, Weiss emphasizes the importance of profitability, citing a minimum target of a 70% gross margin. Coupled with robust growth—ideally exceeding 100% in the early stages—such companies possess the potential to achieve remarkable valuation multiples, ranging from 10 to 50 times revenue.
Despite being a relatively young firm, WestWave has already achieved notable successes within the cybersecurity space. Weiss reflects on their “Shift Left” thesis, focusing on integrating security measures early in the development cycle. “We’ve had several security companies that met our thesis around what we call ‘Shift Left,'” he shares. Among these successes is Accurics, an investment by Weiss’s partner Gaurav, which was later acquired by Tenable with an impressive 8x return. Similarly, Tugboat Logic, a company Weiss personally invested in, found success in automating compliance processes and was acquired by One Trust. Weiss attributes their achievements to exemplary leadership, strong team-building efforts, and a relentless pursuit of product-market fit.
“Investing in early-stage CEOs who prioritize team building, culture development, and achieving product-market fit is crucial,” Weiss emphasizes. This approach enables young companies to streamline operations, accelerate growth, and establish robust metrics essential for sustaining success in the competitive SaaS landscape.
Navigating Growth
In the world of venture capital, financial investment is merely the tip of the iceberg. Weiss says, “The financial investment is the easiest part of being in the VC business.” Beyond capital infusion, WestWave is deeply committed to nurturing the growth and success of their portfolio companies. “We provide comprehensive support, ranging from coaching and product strategy to facilitating customer introductions and identifying channel partners,” Weiss explains. Central to their approach is the cultivation of an experienced executive team. “We help hire experienced board members that can mentor and tutor many first-time CEOs and other executives on the team,” Weiss elaborates. Leveraging their extensive network, WestWave connects portfolio companies with invaluable resources and opportunities for growth.
Reflecting on pivotal moments, Weiss highlights the significance of CEO transitions in shaping a company’s trajectory. “Without naming specific companies, we’ve had to go through many CEO changes,” he shares. “Having the right CEO makes all the difference in the outcome.” Indeed, Weiss emphasizes that hiring the right CEO and assembling a strong executive team are among the most critical aspects of their investment strategy. Equally important is securing co-investors who bring industry expertise and contribute to a robust board. “It is also important to get great co-investors that understand the industry and will be great board members, so that the management team and board are strong together to build a great company,” Weiss notes.
Moreover, WestWave actively facilitates strategic partnerships, leveraging personal relationships to drive half of the acquisitions their portfolio companies have secured in the past year. Weiss underscores the importance of such partnerships, particularly for young companies navigating the competitive landscape. Recognizing the challenges inherent in the startup journey, WestWave guides companies struggling to find product-market fit. “We’ve advised companies when they don’t find product-market fit, but they have good technology, to sell the company early versus raise money,” Weiss explains. This proactive approach aims to mitigate risks and maximize potential outcomes for all stakeholders involved.
Furthermore, Weiss remains deeply involved with portfolio companies, often serving on boards for extended periods. “I have also stayed on many boards that were public for a long time, to help them with the rest of their journey and eventually hire outside board members to take my place,” he shares. This commitment underscores WestWave’s dedication to long-term partnership and support, ensuring sustained success beyond the initial investment phase.
Forging Futures with a Thesis-Driven Approach
At WestWave Capital, a thesis-driven approach shapes their investment strategy across various sectors, including security, analytics, SaaS, cloud infrastructure, and edge computing. Weiss elaborates, “We’re a thesis-driven firm. So, we have many theses about areas such as security, analytics, SaaS, Cloud infrastructure, Edge Computing.”
One notable category within their investment thesis is Over the Horizon investing, where they explore emerging technologies with transformative potential. Weiss cites Robotics as a prime example, highlighting partner Rohan’s expertise in the field. “In the early days of Robotics, it was mostly a hardware-type product that was very expensive to build,” Weiss explains. Their thesis revolves around leveraging standard industry off-the-shelf parts to enhance robot functionality, focusing on value-added components like artificial intelligence and SaaS applications.
An example of this approach is seen in the agricultural sector, where a WestWave portfolio company developed a robot capable of picking various fruits and vegetables in vertical greenhouses. “What we liked about that, was that it allowed the robot to pick multiple types of fruits and vegetables, and the humans being much more productive,” Weiss remarks.
Another success story lies in Andromeda Surgical, where Rohan’s investment led to the development of a cost-effective robot for prostate surgery. “They are building a robot to do prostate surgery,” Weiss shares. Utilizing AI and off-the-shelf components, Andromeda Surgical offers a more efficient and affordable alternative to traditional robotic surgery systems.
Emphasizing their preference for businesses with high gross margins and recurring revenue, Weiss underscores the significance of investing in industries poised for exponential growth. “Many industries are currently part of an evolving stack that allows companies to build next-generation applications,” he notes. WestWave’s focus on Security, Analytics, SaaS, Cloud infrastructure, and Edge computing reflects their commitment to capitalizing on high-growth opportunities with proven outcomes.
Moreover, Weiss sheds light on their exploration of Over the Horizon categories such as Robotics, Quantum computing, Space technology, and ARVR interfaces. While investments in these areas may be smaller initially, they are guided by a commitment to staying at the forefront of technological innovation and adapting their investment strategy accordingly.
Insights from the Venture Landscape
Within the venture industry, Weiss identifies key challenges that entrepreneurs and investors alike must confront. “Some of the biggest challenges facing the venture industry are: Do we have the right leader as the CEO to run the company, and, do we have enough cash to execute on the plan we have in place over a couple of years,” Weiss remarks.
Indeed, financial stability and leadership prowess are pivotal determinants of a company’s success. Weiss emphasizes the importance of prudent financial planning, noting that many entrepreneurs underestimate the capital required to sustain growth. “Many entrepreneurs underestimate the amount of cash, what it’s going to take to get there,” he explains. WestWave works diligently to ensure financial visibility for at least two years ahead, mitigating the risk of cash shortages that could derail a company’s trajectory.
Navigating the venture landscape requires foresight and adaptability. Weiss acknowledges the dynamic nature of the industry, characterized by fluctuations in the number of venture capital firms. “It’s always hard to predict the venture landscape. That’s one of the fun and exciting things about it,” Weiss reflects. While the current era presents unprecedented opportunities for venture capitalists, Weiss urges entrepreneurs to exercise diligence in selecting partners. “I think it’s very important for entrepreneurs to really check out the venture firms and the partner they take money from,” he advises.
Looking towards the future, Weiss envisions transformative changes driven by technological innovation. “The world is in for massive changes in how everything operates at every level of our society,” he predicts. While acknowledging the potential risks associated with advancing technologies such as AI, Weiss remains optimistic about the positive impact of technology on society. “I believe technology could play the most critical role in doing good for society,” he asserts, highlighting the potential for technological advancements to enhance various aspects of human life.
In confronting the challenges and embracing the opportunities presented by the venture landscape, Weiss and WestWave Capital remain steadfast in their commitment to fostering innovation and driving positive societal change through strategic investment and collaboration.
Empowering Progress
At WestWave Capital, Weiss highlights the transformative impact of their investments on productivity and sustainability. “Many of the investments that we make help with productivity,” Weiss emphasizes. A core focus of WestWave’s investment strategy is digitizing traditional industries, ushering in a new era of efficiency and innovation. “Anything that was being done with old systems, use paperwork and that weren’t digitized,” Weiss explains. By leveraging cutting-edge technologies, WestWave facilitates the transition to digital solutions in trillion-dollar industries, significantly enhancing productivity and sustainability.
Moreover, Weiss underscores the critical role of cybersecurity in today’s increasingly interconnected world. “We live in a very dangerous world from a Cyber security standpoint,” he remarks. WestWave’s investments in software companies aim to bolster security measures, safeguarding businesses and individuals against evolving cyber threats.
In tandem with advancements in cybersecurity, WestWave prioritizes investments in artificial intelligence (AI) technologies that enhance operational efficiency. “With AI, we try to invest in companies that help companies run more efficiently,” Weiss elaborates. Contrary to concerns about job displacement, Weiss emphasizes the augmentative role of AI in empowering individuals to focus on higher-value tasks.
Reflecting on his career, Weiss cites Silver Spring Networks as a notable example of a successful investment in sustainability-focused companies. “Probably the most advanced one was Silver Spring Networks that led the world’s largest electric grid to connect customers and businesses to utilities using the internet,” he shares. This innovative solution not only optimized energy distribution but also yielded substantial cost savings and enhanced safety and security measures.
The Importance of People and Integrity
For Weiss, the paramount importance of people has been a guiding principle throughout his career. “Probably the most important thing that shaped my life, and that I learned very early on, is that people are the key,” Weiss reflects. Drawing from his formative experiences, Weiss emphasizes the significance of surrounding oneself with exceptional individuals. “I always try to get the best people to run these companies, as well as all positions of the company,” he shares. This collaborative ethos extends beyond individual investments, with Weiss emphasizing the importance of teamwork within the partnership to ensure the success of portfolio companies.
Leading by example is another cornerstone of Weiss’s leadership philosophy. “Leading by example. That’s the most important thing a leader could do,” he asserts. Upholding honesty, integrity, and a commitment to doing the right thing are fundamental tenets of Weiss’s leadership approach. In a small firm like WestWave, fostering a culture of transparency and mutual support is essential for collective growth and mentorship. Continuous learning and adaptability are also essential traits in the fast-paced venture industry. “You must constantly evolve and prove yourself in the venture business,” Weiss notes. Intellectual curiosity, he believes, is a prerequisite for success in an environment where change is constant and rapid.
WestWave’s Vision for the Future
The journey of witnessing entrepreneurs achieve financial success and deliver impactful products to the market is deeply rewarding for Weiss. “If a company does get the opportunity to go public, and you see entrepreneurs achieve financial freedom, the privilege of being in the best capitalist market in the world, in the United States, delivering world-changing products to customers that improve their lives and their customer’s lives, as well as increase profit, is really a thrill,” Weiss reflects.
Indeed, the prospect of guiding portfolio companies towards success, whether through an IPO or other avenues, fuels Weiss’s dedication to venture capital. “That’s the most rewarding thing I’ve been involved in my whole career,” he acknowledges. While the journey to success in venture capital can be lengthy, spanning a decade or more, Weiss finds fulfillment in the opportunity to support entrepreneurs as they realize their dreams of building successful companies.
Looking ahead, Weiss remains committed to WestWave Capital’s long-term vision and aspirations. “Our aspirations are the same today as hopefully they will be 10 years from now,” Weiss affirms. Central to their mission is the pursuit of excellence in the realm of Enterprise Deep Technology, with a focus on investments in the sub $100 million fund size.
WestWave Capital will continue to grow and progress while maintaining Weiss’s steadfast commitment to supporting entrepreneurs, fostering innovation, and driving positive societal impact. With dedication, strategic vision, and a collaborative spirit, WestWave Capital is well-positioned to navigate the complexities of the venture landscape and make enduring contributions to the world of technology and business.
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