Investing in early-stage SaaS companies

In this episode of the Tekpon SaaS Podcast, we welcome Kenneth Thomas, the Founding Associate at Backfuture Ventures. The discussion provides an in-depth look into the venture capital fund’s global approach to investing in B2B SaaS businesses, focusing on pre-seed and seed stages.

What is Backfuture VC?

Kenneth introduces Backfuture Ventures, a venture capital fund initiated by Alexander Theuma, the founder of the SaaStock conference in Europe. Initially delayed due to the pandemic, the fund took off over a year and a half ago after Kenneth and Alexander connected through mutual acquaintances. Backfuture Ventures emphasizes a community-driven approach, leveraging the SaaStock network and emphasizing a “give-back” mentality where successful founders support emerging ones.

When discussing their investment strategy, Kenneth explains that they prioritize the founders over the specifics of the industry or location as long as it involves a B2B SaaS angle. The fund has invested in various sectors, including health benefits, tax and logistics infrastructure for alcohol brands, and software for SME restaurants. Their primary criterion is the quality of the founding team, as they believe a great team can develop and pivot a mediocre idea into a successful venture.

He emphasizes that Backfuture Ventures aims to support its portfolio companies extensively through its strong connections in the SaaStock community. This includes providing visibility at conferences, aiding in sales processes, and leveraging their network of limited partners (LPs) who often are experienced founders and operators themselves.

Kenneth also highlights the annual SaaStock Global Pitch Competition, now held twice a year, as a significant opportunity for startups. Judged by experienced investors, the competition offers up to $500k in investment for the winners, fostering innovation and identifying promising startups.

Investment in SaaS startups

When asked about trends in SaaS, Kenneth points out the increasing influence of AI, particularly in application layers that enhance core products. He cautions against the hype of significant AI investments, instead favoring niche applications that significantly benefit from AI enablement.

Kenneth also shares his journey from a journalist background to fintech and eventually into venture capital. His broad experience in both banking and startups provides him with unique insights into the challenges and dynamics of early-stage ventures.

Finally, Kenneth expresses his enthusiasm for Backfuture Ventures’ collaborative nature and commitment to supporting the SaaS community. He looks forward to continued growth and contribution, especially through initiatives like the SaaStock conference.

Overall, this episode provides a comprehensive overview of Backfuture Ventures’ investment philosophy, the types of companies they invest in, the qualities they look for in founders, and their differentiated approach to supporting portfolio companies. It also emphasizes a strong sense of community within the SaaS ecosystem.