June 2017 Newsletter

June 2017 Newsletter

Dear Limited Partners and Friends of Okapi,

My partners and I decided that there is so much going on here in the Southern California entrepreneurial ecosystem and with Okapi in particular, that a newsletter would be a great way to augment our regular meetings and updates.  So, it is with great pleasure that we are sending you our first formal newsletter.

Our objective is to periodically share news about our portfolio companies, our firm, the general SoCal ecosystem, and other things we find particularly worth sharing.  As it is a work in progress, please don’t be shy about sharing your feedback and make sure to look us up if you’re ever in our area.

Okapi Ventures II, LP (“OV2”) has its first “unicorn” portfolio company!  While we prefer to focus on realizations and rates-of-return, it is easy to get excited when a company reaches a $1 Billion valuation.

CrowdStrike, a Southern California-based cybersecurity business (Irvine, CA), completed a $100 million Series D financing round, led by existing investor Accel, and including an investment from a large CrowdStrike customer, Telstra.  Following the closing of this round, the company’s total funding raised is $256 Million with a valuation of over $1 Billion dollars.  This latest funding round is a significant mark up for OV2 and will be reflected in the Q2 quarterly report.

SpecRight has developed a pioneering packaging and product specification Software-as-a-Service platform for companies to help them manage the hundreds or even thousands of specs that a company may have for its products.  In late Q1, the SoCal-based SaaS software company, (Irvine, CA), secured a Seed round financing co-led by Okapi (and includes the conversion of Okapi’s pre-seed funding).  Marc has joined the SpecRight board and OV2 is the largest shareholder in the company.  SpecRight is off to a strong start for 2017, landing several Fortune 500 customers, amongst others, and has a very strong pipeline.

In April, ChromaCode, a molecular diagnostics company based in SoCal (Carlsbad, CA) raised a $12 Million Series B round led by New Enterprise Associates (NEA) with participation from existing investors, including OV2.  The funding will be used to fuel development and establish the commercial infrastructure for ChromaCode’s High-Definition Polymerase Chain Reaction technology that can help dramatically improve molecular analysis.

ArtLifting has created a marketplace for the sale of high-quality art sourced from artists living with homelessness or disabilities and shares 55% of the revenue generated from the art sale with the artist.  ArtLifting has become a leading provider of large format art works to corporations, providing art and allowing the companies to help make a social impact with their purchase.

San Diego-based Obalon Therapuetics (NASDAQ: OBLN), which had its IPO in early Q4 2016, recently announced their Q1 earnings which were ahead of analysts’ expectations.  The company’s swallowable, gas-filled, intragastic balloon system for the treatment of obesity is now being sold in the USA and recently received approval to be sold into Middle East markets.  Given that Sharon remains on the Obalon board, we can only refer to publicly available information for the company that you can find here on the “Investors” section of their web site.

Have a great Summer,

Marc Averitt

Managing Director

Okapi Capital

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A Look Back – Nothing Ventured, Nothing Gained

I left Intel ten years ago and have been blessed beyond belief this past decade.  I haven’t posted in quite some time but have been feeling very grateful of late and thought I’d share my blessings in an effort to get back into writing.  First, the back-story.

I left Intel to launch Okapi Ventures in 2005 after numerous conversations with Matt Massengill (then Chairman & CEO of Western Digital), Dwight Decker (then Chairman & CEO of Connexant Systems), and Randy Lunn (then GP at Palomar Ventures) convinced me to leave my proverbial corner office and do something inherently more local.  I wasn’t looking to leave Intel when our conversations began in early 2004.  I was running strategy and corporate development for Intel’s software group (“SSG”) worldwide and was having an amazing time and gaining unbelievable experience by the day.  My wife and I had just moved down to Orange County the year before, bought our first house, and were then expecting our first child.  Things were very good.

So, why’d I leave?  Simple.  I became convinced of two things during our conversations.  First, I realized I would be taking enormous financial and career risk to give up being an exec at Intel at that time (especially in light of imminent fatherhood).  Fortunately, I also realized I would be taking an even bigger risk with my life’s experiences by not leaving.  I’m pretty sure Robert Frost’s famous poem came to mind when I made me decision.

So, at the “ripe old age” of 33, I left Intel and launched Okapi Ventures.  Since then, I have been blessed to partner with Sharon Stevenson.  She has been a truly amazing partner, mentor, and friend the past ten years and we have been through a lot together.  The venture capital industry is a truly crazy industry and most people don’t realize how important the partnerships are.  Period.

I have been blessed to have raised two funds totally almost $50M.  Sharon and I have been blessed to have backed some phenomenal entrepreneurs and work with very talented teams to grow almost 20 startups over the past ten years.

Finally, wife and I have been blessed with two amazing kids that are as curious and precocious as a parent could hope for and have enjoyed watching them develop beyond what my vocabulary can articulate and are excited to see what they are becoming.  I live for my family and look forward to the next ten years together.


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Fred Wilson to visit the OC


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Happy Holidays

Well, it’s that time of year again. Time to reflect what went well this year and what didn’t. As I ponder the past, I’m struck by the fact that the more information I consume, the less time I seem to have to actually think about such information. A fact troubling to most but really disenheartening to someone with an actual degree in philosophy (me). So, before I get wrapped up in the holidays I’m vowing here and now to spend less time in 2013 consuming and more time thinking in 2013. Please hold me accountable! In the interim, please have a safe and joyous holiday season.

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Only the Strong Shall Survive

I have been spending an inordinate amount of time thinking about what characteristics the most successful startups have and thought I’d share one: strength. Entrepreneurs need to be mentally strong to survive the inevitable ups and downs of running a startup. And, come to think of it, so do early-stage VCs… The good news is that such strength can be increased through such experiences (that which doesn’t kill you will make you stronger) on a relative basis.

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New Digs

Howdy.  After a lengthy hiatus, I’m in the process of “migrating” my blog from “ocvcblog.com” to here (1oc.vc) so stayed tuned as to what I’ve been up to and other such stuff.

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