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Hackernoon logoSparkLabs Group… A New Beginning for Our Venture Capital Firm by@bernard

SparkLabs Group… A New Beginning for Our Venture Capital Firm

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@bernardBernard Moon

Partner at SparkLabs Group

www.sparklabsgroup.com

Time passes like the wind. Five years after we launched the first SparkLabs accelerator in Seoul and almost four years since our first venture capital fund, we have invested in 154 companies across 6 continents. After a lot of hard work, frustration, arguments, laughs and passion to help entrepreneurs across the globe, we have launched 3 more startup accelerators since November 2016 (SparkLabs IoT & Smart City Accelerator in Songdo, South Korea; SparkLabs Beijing; SparkLabs Taipei) and we will soon finalize SparkLabs FinTech in Hong Kong. SparkLabs Cultivate in Australia will be ready next year and possibly a couple more accelerators in 2018.

http://sparklabsgroup.com/accelerator-seoul.html

Just last week we announced our new $50 million early-stage fund (Series A & B) focused primarily on South Korea, SparkLabs Ventures. There might be a couple more fund announcements before year end too.

HanJoo Lee, Jimmy Kim, and I launched SparkLabs accelerator in Seoul in 2012, and the first batch began in December 2012. We brought on Jay McCarthy as another partner and Eugene Kim joined as a principal to run the day-to-day operations (Eugene is a partner with SparkLabs today).

In October 2013, we combined forces with Net Jacobsson and Frank Meehan to launch a new global seed-stage fund. Frank just left Horizons, which is Li Ka-shing’s investment vehicle, and he and Net began discussions to launch a new seed fund covering the U.S., Europe and Israel. Net recently stepped down as CEO of Ginger Software and was Facebook’s first Director of International Business Development & Mobile. I knew Net from his time before Facebook at Maxthon, which was a China-based browser company he helped grow to over one billion downloads.

www.sparklabsglobal.com

Net knew that Jimmy, HanJoo and I were thinking about an Asia and U.S. seed fund, but we were planning for it a year down the road. We started to talk that June of 2013 and then we “dated” for about 5 months as the six of us got to know each other. The six of us (Net, Jay, HanJoo, Jimmy, Frank and I) decided that it made sense to launch a global seed-stage fund since entrepreneurs we spoke with from Europe, Asia and the U.S. were planning to go global sooner than later. So we formed SparkLabs Global Ventures that October 2013.

SparkLabs Global Ventures is a seed fund that has primarily invested in the U.S., but also in 60 companies across 6 continents

Our approach was different than most that we know of in the world. We plan from the beginning to create each accelerator entity as standalone and successful. There is no preferred follow-on investment from our venture capital funds to accelerator graduates. Out of the 77 graduates from SparkLabs Seoul, our global seed fund has only invested in 10 companies after a lead investor was established. Of course the graduates do well anyways since 79% of them receive funding after our program. Our new Series A fund, SparkLabs Ventures, will also not lead rounds for accelerator graduates and will seek to invest in a majority of non-SparkLabs companies.

With all of this momentum and growth of our brand and reputation, we know this year and next are important for us to stay true and focused on what brought us here in the first place.

WE INVEST IN PEOPLE. Especially at the accelerator and seed stage of the startup lifecycle, it really is about who are the founders that you invested in and how they respond to adversity, stress, ethical dilemmas, and the general highs and lows of startup life. After we invest our money, we devote our time and resources to each of our companies. Some might call it foolish but whether we invest $25,000 from one of our accelerators (i.e. $50,000 to Drop from our IoT & Smart City accelerator) to $500,000 from our seed fund, we do not discriminate in our attention to our portfolio companies based on dollars invested. Everyone of our partners have gone through a startup from the conception stage, so we know how difficult and painful life can get so every portfolio company deserves our attention.

SparkLabs IoT & Smart City’s 1st Batch went beyond our expectations. Truly a global program as we planned and the average company was much further along than expected with $2.8M raised prior to joining the program in November 2016.

And frankly, most of us have been giving free advice to other entrepreneurs most of our careers, so we are just lucky enough to add some funding with our words, possible insights, and connections.

DO WE ADD VALUE? It’s not like our team asks this often, but it is in the back of our minds and something we just naturally seek out to do. We want to help our startups in whatever manner that is needed because we know how hard startup life is and that the odds are stacked against them. If we ask ourselves this and we are not executing up to our own standards, then we need to recalibrate ourselves and step up our commitment.

Ben Harris, Co-founder & CEO of Drop, presenting at SparkLabs IoT Demo Day 1

I believe this was recently reflected in the response to our 1st IoT & Smart City batch. Many companies that applied to this startup accelerator program already had more than $1M in revenues or raised over $2M in venture capital. The majority of companies that applied and the 16 companies in our 1st batch did not need our $50,000 investment, but I assume they saw the value that we previously added to our portfolio companies or heard about it. The first SparkLabs IoT & Smart City 1st batch had an average of $2.8 million raised prior to joining our program, which was mind-blowing to some of our team members.

INTEGRITY IS ESSENTIAL. This is taken from my prior post about our SparkLabs accelerator a year ago, but I’m reusing it here because it is important… Integrity is an absolute starting point. Maybe because many on our team lived in the MidWest (Chicago, Ann Arbor), but we truly believe all a person has is his or her word. We also emphasize this to our companies; don’t lie to your investors, don’t lie to your company’s partners, don’t lie to your employees, and don’t lie to yourself.

Petnet (petnet.io) is a SparkLabs Global portfolio company

RECRUIT THE BEST. We focus on getting the best people in terms of talent and cultural fit. We love high achievers and we love “good people”, as some Southerners say. We look for people who are transparent, flexible, humble, hustle and simply work hard. You only have to look at the people who recently joined us. Colin Qu, Managing Partner at SparkLabs Beijing, and Edgar Chiu, Managing Partner at SparkLabs Taipei, are both people who several others have told me after meeting them, “He is a super, nice guy… or He’s a really, really nice guy”. Not a“nice guy” or a “good guy” but a “super, nice guy.” Similar comments and praises are stated about William Chu, Managing Partner at SparkLabs FinTech, and our team at SparkLabs Ventures (Brian Kang and Chris Koh).

www.sparklabsgroup.com

SparkLabs has grown beyond our expectations. In some ways, it has taken a life of its own, so before things got too chaotic we decided (Well, Frank posed the question, “Shouldn’t we have a group site?”) that we should present and organize ourselves in way that entrepreneurs and investors understand the different parts in our network of entities.

There was some discussion on what we should name this overarching entity. For a small grouping of accelerators and early-stage funds, doesn’t “group” sound too presumptuous since relative to the venture capital landscape our assets under management isn’t that much? Should we call ourselves the “SparkLabs Global Network”, and pay homage to the OG venture capital group which is the Draper Venture Network? What about the “SparkLabs Cluster”, but this would be horrible if we completely fail in a few years and set ourselves up for unlimited jokes as the “SparkLabs Clusterf**k”. So we finally decided on SparkLabs Group :)

www.sparklabsgroup.com

So here is the launch of SparkLabs Group. Please visit our new website at www.sparklabsgroup.com and learn more about our accelerators, funds and people.

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