Jeffrey Thomas, Executive Director at Lever discusses Lever’s venture capital fund and their investment strategies and approaches. Jeffrey explains their focus on seed-stage investments, writing $100,000 checks, and investing in price rounds or convertible notes.
VIDEO TRANSCRIPT
MFN: I’m aware that Lever has a venture fund of its own. Would you mind speaking a little bit about your experience with that?
Jeffrey Thomas: Yeah, we’re actually investing our second fund. Though a lot of people would call our fund a micro fund. We typically write $100,000 checks, where we’re really targeting now seed stage, and we prefer to invest in what people call price rounds, where there’s an agreed-upon valuation. But we also invest in convertible notes, which is essentially a debt instrument that converts to stock once the price route occurs. So that’s kind of our sweet spot for investing.
We’re sector agnostic, meaning we don’t focus on FinTech or ClimateTech EdTech or anything in particular. We really just look at each deal opportunity on its own merits, which makes it a lot of fun. We get, you know, exposure to a lot of different sectors. We’ve invested in a few cleantech companies, we did a cybersecurity investment. We’ve invested in a company, Marty’s Local, which is something that a lot of venture firms probably wouldn’t look at because it’s not going to get you that kind of 10x, 20x growth potential. But I gotta say they’ve done very well. They’re doing sales, marketing, and distribution for food producers in Western Massachusetts. And when we invested, you know, they had about a quarter million dollars a year in annual revenues.
Last year, they just surpassed 10 million in annual revenues. A lot of funds will look at any investment opportunity and ask ‘Can this make me 10x?’. We’re also interested in things that might be a little safer, a little less risky, and be happy with a 3x or a 5x return. I think that’s an advantage to us. I think that gives us some diversity in the portfolio. But it also reflects that the Western Massachusetts startup ecosystem is still developing. We just don’t have the deal flow that a fund operating in Boston or San Francisco would have. So by looking at a few opportunities that may not be 10 Xers, but maybe your five Xers, that gives us more investment opportunities which is a good thing for us.
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