We are focused on advising early stage founders and teams that have passion and conviction about the power of software to disrupt and create business value.
Hank (59 years old) reported directly to Bill Gates and then Steve Ballmer as Microsoft’s senior strategy and deal executive. He managed Microsoft’s strategic acquisitions and investments as well as its relationships with not only prominent executives in software, telecommunications, media, consumer electronics and e-commerce but also emerging leaders in Silicon Valley and beyond. Hank was responsible for Microsoft’s strategic investments in a number of technology companies (including Facebook), its acquisition of Nokia, and its strategic partnerships with Yahoo, Time Warner, Sony, Samsung, News Corp, Vodafone, Viacom, and others. From 1989 through the launch of Office 95 in 1995, he led the overall product marketing and brand management efforts for Microsoft Desktop Applications group, with primary responsibility for Excel and the overall strategy for the development of Microsoft Office.
Fritz (35 years old) was formerly a Senior Director in Corporate Strategy and Acquisitions at Microsoft, where he was responsible for strategy and corporate development for the Microsoft senior leadership team, its CEO, and its Board of Directors. While at Microsoft, Fritz was on point for several large deals undertaken by Microsoft, including its investment in Facebook and its partnership with Yahoo. In addition to his early stage investing activities at Acecap, Fritz founded Livestar (subsequently acquired by Pinterest) and co-founded Doppler Labs and Verst (DWNLD). He is currently serving as the Executive Chairman and acting CEO of ClassPass.
We have a simple thesis which has deep implications: All industries and markets will continue to reinvent or disrupt along numerous technology vectors. As a rule, technology teams and new efforts will lead and capture the value of reinvention and disruption. In this sense, we believe the majority of value creation will come from insurgents at the expense of incumbents.
Given this view, we believe that the supply of talented, top notch, complete product teams will remain the scarce resource relative to the scope of objective market demand. Such teams are not exclusively technical and engineering talent, though this is a cornerstone. They also demonstrate the skills necessary to deliver product/market fit, understanding that building a successful business involves more than just design and code.
We have been finding, evaluating, and advising such teams globally for a combined 35 years, both at Microsoft and as the primary focus of Acecap’s approach. Our assessment of such teams is based on pattern matching against our very diverse business and market experience. A central conviction we hold is that “product management” skills are often the crux in discriminating a success signal for a given team and the related investment.
Added to our diverse pattern matching experience, we operate with a set of strategic lenses that distill and reflect our Microsoft and Acecap learning from subsequent market outcomes. Several of these lenses have stood the test of time, across several technology market transitions and disruptions. These include:
The importance of market structure. We assess overall market structure with particular focus on the boundary conditions of insurgent vs. incumbent contests. How is this competitive dynamic shifting market leverage, position and flow of economics?
How are technology roadmaps and vectors changing/driving these dynamics?
A bias for platform thinking and the various ways in which platform power is accrued and maintained. What is the currency of a specific platform’s market power? Understanding how platform scale relates to platform gravity. Given this, what are defensible assets that can relate to dominate platform assets?
What are emergent compute platforms that initiate potential “greenfield” platform dynamics?
The importance of platform ecosystems and communities, and related network effects.
An understanding of the origination and control of a proprietary data asset as a path to defensibility
Friction vs. liquidity and how technology is shifting this boundary within markets. Often latent information getting expressed as liquidity via technology is a key pattern.
These are just a few of the persistent investment frameworks we use in our evaluation process and a key differentiator in our success. We are not primarily financiers but rather experienced thought leaders in product strategy, market strategy, and partnership. We believe management teams primarily benefit from three things: capital, high-value experience-based advice, and the power of our broad network of relationships to support the needs of a portfolio company, whether with its next stage financing, partnerships, or talent acquisition.
We remain highly focused on long term alignment with company success. We seek to avoid distortion from specific non-company agendas around timing, control, and capital exit pressure driven by “agency” requirements.
We aspire for Acequia Capital to be fundamentally founder and company friendly given the tension that often exists between institutional investors and the entrepreneurial community. We believe our “founder friendly” approach does not equate to rubber stamp support of a given strategy or founder point of view. Instead we provide objective, actionable, experience-based advice that is often at odds with the traditional point of view. Our franchise reputation is enhanced when such advice is later deemed to be consistently sound within the very connected networks of entrepreneurs and founders. We believe this remains a distinguishing feature of our approach and has led to significant downstream opportunities for investment and early market signal.