Jake Saper, GP @ Emergence Capital: "We Sold Salesforce Early and Lost Out on Billions"

(upbeat music) ... dollars in capital. We've returned a little over $8 billion (cash register chime) in cash. We did this analysis on how have our deals fared in terms of, like, certain graduation metrics relative to market. Nine out of ten of our deals have gone on to raise successful follow-on rounds. One out of five have gone on to raise rounds at north of a billion dollars. One out of ten of our early stage investments have gone public.

Ready to go? (upbeat music) Jake, I am so excited for this, dude. I loved our walk around London last night. I actually walked around and I was like, "You know what? James Corden does Carpool Karaoke."

(laughs)

"I should almost try and do this around London."

Dude.

It was great.

I was thinking, this is a PSA for anyone who visits London, you give the most enchanting walking tours of this place.

(laughs)

Like, some might say romantic. Just, like, incredibly beautiful, such appreciation for the history of this thing, so thank you.

It was when I took you down the prettiest street, and I was just like, "No, this is getting a little bit romantic." (laughs)

But we were able to talk about my wife in that moment.

Th-th-this is ...

Which made it feel better.

Exactly. Listen, I loved it because I also got so much context that I wouldn't normally get, even in like, you know, prep calls, which I think are generally bullshit, to be honest. Um, but I wanted to start with Zoom.

Yeah.

This was your first deal at Emergence, and I just want to start there. Talk to me about Zoom. How did it come to be?

We aspire to be a thesis-driven firm, and before I even joined Emergence in 2014, in 2013 the firm had developed a thesis around the fact that there was an opportunity to replace Webex. That Webex was a tired product that didn't, wasn't very good. In fact, when I was interviewing at Emergence, the case they gave me to interview at Emergence was for a company called Fuze. Fuze was video conferencing software, an early competitor to Zoom, and I was supposed to diligence that case and then make the recommendation, should or shouldn't invest, and they were gonna hire me based upon that. Did a bunch of work, ultimately concluded we shouldn't invest, made that case. Fortunately, I made the right call, that was also the decision they made and they hired me. Fast-forward a few months, I join the firm, and the very first deal that we're pursuing, where I'm tapped to lead diligence, is Zoom. So, the good news was, we had a prepared mind around the space. We also saw incredible early product-led growth. The company was around two or three million in revenue, it was growing very quickly, but obviously very, very early. And we believed in Eric. Eric was the VP of Eng at Webex before, so knew a lot about the space. And he'd rebuilt the core technology called the Codec, and it worked really, really well. My partner, Santi, who ultimately led the deal, is from Argentina, and he used the product to call his parents, or to call his family back in Argentina, and discovered like, "Hey, this thing works way better than everything else on the market. This Codec is real. We should take this really seriously," and we paired that with the growth, and we were like, "Let's dive in." However, the deal was not straightforward. And the reason the deal was not straightforward is it was going to be the largest check we'd ever written, at amongst the highest prices we'd ever paid, and the company was incredibly early. So, for context, it was gonna be a $20 million check, out of a $250 million fund, which is a lot of concentration.