Nick Tippmann - Vertical SaaS Operator -> Investor
10/25/23 • 47 min
Our Guest: Nick Tippman, former Chief Marketing Officer at Greenlight Guru, a category-leading provider of regulatory software for the MedTech vertical. He is now an angel investor, investing in exceptional Vertical/SMB SaaS, AI, Fintech, and B2B Marketplace founders and companies at the pre-seed/seed stage alongside other leading investors.
Episode Topics:
- Nick’s current investment criteria for a vertical SaaS company.
- Nick’s minimum TAM + how he looks at take rates.
- How important are fintech and payment opportunities in evaluating vertical software markets?
- How embedded APIs - like embedding payroll into your app - are changing opportunity sets for seed-stage vertical SaaS
- What constitutes founder market fit?
- Nick’s advice on effectively demonstrating founder-market fit in a pitch deck.
- Nick’s views on the increased venture capital flow into niche vertical markets.
- The impact of Generative AI in breaking through to categories that have been resistant to digital transformation
- Is AI an opportunity, neutral, or a threat?
- Eli Dukes Question: What's the primary challenge in vertical SaaS: Is it GTM or product? Why?
- How to assess founders and their teams' product management skills in this changing landscape?
- Understanding operator funds + Nick’s perspective as a Limited Partner (LP) in 11 funds.
- Nick’s recommendations and tactical advice for potential emerging managers.
Resources:
Eli Dukes Vertical SaaS Substack - https://verticalized.co/
Nick’s Google Doc - “Ultimate List of 37+ VC & PE Firm Theses & Market Updates on Vertical SaaS”
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
Our Guest: Nick Tippman, former Chief Marketing Officer at Greenlight Guru, a category-leading provider of regulatory software for the MedTech vertical. He is now an angel investor, investing in exceptional Vertical/SMB SaaS, AI, Fintech, and B2B Marketplace founders and companies at the pre-seed/seed stage alongside other leading investors.
Episode Topics:
- Nick’s current investment criteria for a vertical SaaS company.
- Nick’s minimum TAM + how he looks at take rates.
- How important are fintech and payment opportunities in evaluating vertical software markets?
- How embedded APIs - like embedding payroll into your app - are changing opportunity sets for seed-stage vertical SaaS
- What constitutes founder market fit?
- Nick’s advice on effectively demonstrating founder-market fit in a pitch deck.
- Nick’s views on the increased venture capital flow into niche vertical markets.
- The impact of Generative AI in breaking through to categories that have been resistant to digital transformation
- Is AI an opportunity, neutral, or a threat?
- Eli Dukes Question: What's the primary challenge in vertical SaaS: Is it GTM or product? Why?
- How to assess founders and their teams' product management skills in this changing landscape?
- Understanding operator funds + Nick’s perspective as a Limited Partner (LP) in 11 funds.
- Nick’s recommendations and tactical advice for potential emerging managers.
Resources:
Eli Dukes Vertical SaaS Substack - https://verticalized.co/
Nick’s Google Doc - “Ultimate List of 37+ VC & PE Firm Theses & Market Updates on Vertical SaaS”
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
Previous Episode
Co-Founder and CEO of Bigfoot Capital: Debt for the SaaS Masses
Our Guest: Brian Parks is the Co-Founder and CEO of Bigfoot Capital, a non-venture debt lending firm, that provides growth and bridge debt facilities to SaaS companies with $2+ million in annual recurring revenue.
Episode Topics:
- Current access to capital environment - “2/3 of equity investors and lenders expect to be more active over the next 12 months”
- Disconnects after the failure of Silicon Valley Bank (SVB)
- Unique financing opportunities after disruptions like SVB
- What are the table stakes - like data rooms and timelines - for non-venture-backed software company founders when raising debt capital?
- Bigfoot’s core loan investment criteria (loan size, typical revenue size, and facility size)
- Brian expounds on “being frivolous with equity” quote - “I'm anti-frivolity with equity and think a lot of people are extremely frivolous with their equity, selling too much of their company too early."
- Brian’s perspective on the changing dynamics of whether to bootstrap + the increasing presence of VC in typically bootstrapped categories
- Understanding Bigfoot’s underwriting - lending three to six times MRR - from a credit support perspective
- The absence of equity warrants in Bigfoot's lending model
Resources:
https://bigfootcap.com/
https://bigfootcapital.substack.com/
https://bigfootcapital.substack.com/p/capital-provider-sentiment-survey-17d
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Sales Engagement Software, Sales Conversation Intelligence Software, Sales Compensation Software, and Digital Sales Room Software
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
Next Episode
Akash Bajwa - AI + Software Investing in 2024
Our Guest: Akash Bajwa is an investor in fintech and B2B SaaS at Earlybird Venture Capital, a European venture capital firm with 2 billion Euros in assets under management (AUM).
Episode Topics:
- Akash and Earlybird’s investment criteria
- Areas in early-stage native AI that Akash and Earlybird are excited about
- Akash discusses the unique skill sets needed for native AI founders.
- Is building an AI-focused business similar to the well-established SaaS playbook?
- Akash’s views on investor returns if gross margins decrease to 50% in AI-driven software.
- How are software pricing models going to evolve in an AI world?
- Methods for assessing a founder's execution ability during early-stage fundraising.
- Akash’s views on vertical software and implications of AI lowering barriers to software creation.
- Akash's view on AI's capital intensity + its implications of this for investors.
Resources:
https://substack.com/@akashbajwa
About Cloud Returns by Cloud Ratings:
Cloud Returns covers ALL types of software investing, whether seed, venture capital, growth equity, private equity, debt, and the public markets.
Our host - Matt Harney - is active on Twitter @saasletter and writes "SaaSletter", an investing-oriented SaaS newsletter on Substack.
https://cloudradio.cloudratings.com/
https://twitter.com/SaaSletter
About Cloud Ratings:
Cloud Ratings is a customer outcomes-focused, data-driven software research analyst firm. We exist to allow organizations to make more confident, lower-risk software purchasing decisions.
Our Cloud Ratings Category Reports combine user reviews with verified vendor data to impartially identify leading software products. Recent report examples include: Board Management Software, Account-Based Marketing Software, Cap Table + Equity Management Software, Lead Routing Software, and Sales Training + Onboarding Software.
Built upon investigative customer interviews, our True ROI Reports quantify and provide 3rd party validation of a software product’s business value.
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