'If you are planning to raise money this year, just know your best case is probably Q4'Earlier today, A Technology News Room caught up with Chris Sugden, a managing partner at Edison Partners, to talk about the current fundraising market, whats next for SaaS startups and if theres any good news to be found in todays market.As the stock market continues to gyrate (more up than down), and the unicorn exit market looks increasingly moribund, understanding how private investors are putting capital to work today and over the next few quarters is critical for startup founders.
A host of startups that would have normally raised in Q1 of this year did not.
The fundraising market they encounter the rest of the year will help determine their business trajectory.Before we dive into our Q-A on all that, a short note on Edison Partners .
Edison is a growth equity firm, which, according to Sugden, means that its checks range from $5 million to $30 million, with a sweet spot between $10 million and $15 million.
Regarding stage, Sugden said that Edison looks to put capital into companies with between $8 million and $20 million in revenue, noting that the larger companies stretch his firms check size to the max.About 75% of the firms investments are in software-as-a-service companies (SaaS), with the other 25% going into other types of startups.
According to the investor, the average growth in Q4 2019 of the firms 12 investments from its ninth fund was about 100%, compared to the year-ago period.So, Sugden is an active investor at a firm that has been around for a few decades with a good-sized account from which to invest.
Lets dig into how he sees the market shaking out.Fundraising in 2020The following excerpts come from A Technology News Rooms chat with Sugden, which weve grouped and edited for clarity.
Weve peeled back the conversation, allowing us to pull out the parts that felt the most useful for startups.
We start with his view of the 2020 venture capital market.