INTERVIEW WITH DENNIS SMITH, Founder and Managing Partner of Evolution Equity Partners

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Evolution Equity Partners is an international venture capital based in New York City, Palo Alto, London and Zurich.

  1. Evolution Equity Partners is an international venture capital investor leveraging deep sector expertise to help exceptional entrepreneurs develop market leading companies. What is Evolution’s mission and in which segments do you invest?

    Evolution Equity Partners is an international venture capital investor partnering with
    exceptional entrepreneurs to develop market leading cyber-security, the rapidly expanding adjacent sectors protecting our digital world such as Fin Tech, Regulation and Compliance Tech, Privacy and Data Protection, and enterprise software companies.

    Based in New York City, Palo Alto, London and Zurich, Switzerland, the firm is managed by investment and technology entrepreneurs who have built companies around the world and leverage their operating, technical and product development expertise to help
    entrepreneurs win.

    Evolution has interest in companies utilizing big-data, machine learning, artificial
    intelligence, SaaS, mobile and the convergence of consumer and enterprise software to build leading information technology companies.

    The Partners at Evolution have lived in, built and exited companies internationally to major technology and services companies. Exits have included IPO`s on both US and European Stock Exchanges.

    The Partners bought a small Czech End-point security company, scaled it internationally as a recognized global security leader with over 200 million users. 8 years later, AVG Technologies became the first Central and Eastern European technology company to IPO on the New York Stock Exchange. We like nothing more than to work with outstanding company founders and CEO`s to scale their companies supported by Evolution`s company building, network and financial resources on both sides of the Atlantic.
  2. Evolution Equity Partners recently announced the final closing of a new fund and total capital commitments of $400 million to make investments in cybersecurity and enterprise software companies. What type of companies are eligible for Evolution’s portfolio and do you target a specific market?

    Evolution Equity Partners is a very thematic and pro-active investor in the sectors in which we invest. We are lead investors in approximately 85% of our investments and invest in our target markets of approximately 50% in both the US and Europe. We invest approximately 80% of each Fund at the Series A, B+ stage. We reserve up to 10% of each Fund for earlier stage companies where we do not see compnies at the A and B+ stages but where we have strong conviction that the space the early stage company is on our roadmap to invest into. Finally, we may invest up to 10% is special later stage opportunities in our investment sectors.
  3. You have already backed iconic cybersecurity and enterprise software companies including SecurityScorecard, Carbon Black, Arqit-Quantum, DefinedCrowd, Quantexa and other. What are the key elements of Evolution’s investment decision-making?

    Evolution looks for investments in the sectors, geographies, and stages of
    development where Evolution can best apply its Partner`s financial, company
    building, operational skills and network focus. We look for a team that is experienced and highly motivated to build an international class product and company that attracts international customers and investors.

    We are not a „Silo“ firm but every Partner and employee at Evolution Equity Partners is
    available to assist our portfolio companies as they need. Our network is used to provide
    introductions to Human Capital, Distribution and Re-Seller Partners and Customers to our Portfolio companies on both sides of the Atlantic as they themselves „cross over“. In
    addition to initial capital, Evolution is often on the Board of our portfolio companies and
    participate in follow on rounds and other investor introductions to support our portfolio
    companies.

  4. Cyber security industry is shifting to next-generation technologies utilising artificial intelligence (AI) and machine-learning (ML). Are you already looking at opportunities in firms developing this type of products?

    Evolution was the seed investor and Board member of one of the earliest companies to use AI/Ml in a mainstream security company product set looking to detect and to protect enterprise network netflow. This company was exited to and continued to flourish as a memeber of one of the world`s largest technology comapny. Since that time, we have encouraged and assisted our portfolio companies to incorporate AI/ML where appropriate in their technolgy stack. All the more important today as security adversaries are using AI/ML themselves to attack enterprise and government globally. Our current and pervious Funds have invested significantly in the AI/ML security space with a number of leading companies.
  5. What are your main targets for the upcoming Y2022?

    Each of our Funds`portfolios are performing well (3 to date) and their performance is in the top decile of all funds globally and in the sectors they address. We see 2022 as building upon the development of our portfolio companies and the resulting returns for our investors and our entrepreneurs. Our aggregate Evolution funds` track records show
    returns over 6 X the money invested over more than 15 years and with room for further
    growth. Cyber Security is one of the investment areas that thrives through both adverse
    and positive economic cycles such as post 9/11, the 2008 financial crisis and now Covid-19. The Partners at Evolution have lived through as a team each of these eras and invested and built successful market companies throughout. We will launch our 4th Fund in Q1 2022 to continue our investment thesis.