In the early 2013-to-mid-2015 period, of the top 100 venture capital exits, Sapphire invested in 10 of them. For a mid-stage VC fund (B-round investments or later) that’s considerably smaller than its top-ranked counterparts (with less than $1.5 billion under management), this performance is eyebrow-raising. Their no-nonsense approach is clearly paying off. “Building a massive marketing machine just isn’t in our DNA or aligned with the type of firm we’re seeking to build,” says Nino Marakovic, Sapphire’s CEO and Managing Director. “We are intensely focused on our investments and driving results.” Tom Chavez, CEO of Sapphire portfolio company, Krux, and a Harvard alum explains: “Nino and Sapphire are super-astute, no-nonsense, no-BS investors who don't get caught up on matters of ideology or conventional wisdom,” says Chavez. “They help me and my management group in much more substantive ways.” Rajeev Dham and Max Wessel: Helping Sapphire Companies Disrupt Their Way to the Top For Rajeev Dham, a Sapphire Vice President and Harvard MBA Class of 2013, market disruption is what really stands out about the investments he’s helped Sapphire make. “Every investment I’ve made has been a market-disruptor,” says Dham. “My first investment was Nutanix, one of the fastest-growing technology infrastructure companies of all time. Others include companies like Localytics, Krux and Qubit, which are at the forefront of providing one-to-one visibility into consumers across channels in order to improve their overall customer experience.” Clarkson and Dham are joined at Sapphire by Max Wessel (HBS MBA Class of 2011), a Vice President on Sapphire’s Marketing Development team. Wessel joined Sapphire from SAP, where he served as VP of Innovation Strategy. He previously served as a senior fellow at The Forum for Growth and Innovation, Professor Clayton Christensen’s HBS think-tank, and continues to write today for numerous publications, including The Harvard Business Review. In fact, one of Wessel’s notable articles was a 2012 HBR piece he co-authored with Christensen entitled Surviving Disruption, which features points and conclusions that are as salient as ever in 2016 for him and his HBS colleagues at Sapphire. Dham summarizes the Sapphire investment approach: “We tend to aim pretty high with companies that are taking on or re-shaping huge markets with the teams to execute on these opportunities.” Wessel, Dham and Clarkson are quite pleased though not surprised with Sapphire’s success in recent years. “Thankfully, the primary reasons I originally joined Sapphire – the focus on later stage and the high caliber of individuals – have proven out,” Dham says. Keys to Sapphire’s Under-the-Radar Success Of the 1,000+ VC and growth funds, how is it that Sapphire has found its way right at the head of the pack of top-performers? HBS Professor and VC expert Paul Gompers provides a clue. In his extensive writings about the benefits of specialization in venture capital, he states, “Increasing firm specialization enhances firm performance.” Gompers explains one reason for this is related to the firm’s ability to better exploit the timing of intra-sector shifts and market segment changes. This point is quite relevant to Sapphire’s success. While VC specialization is not unique to Sapphire, the firm has excelled in its unique ability to recognize and capitalize on key enterprise dynamics. Marakovic and Clarkson point to three enterprise market developments it has focused on as examples, including: Consumerization of IT (e.g., LinkedIn, Square, Localytics), Horizontal/Vertical SaaS (e.g., Docusign, ExactTarget, Five9, Socrata, IEX) and Business Intelligence/Analytics (e.g., Looker, Alteryx, Jaspersoft).
In the early 2013-to-mid-2015 period, of the top 100 venture capital exits, Sapphire invested in 10 of them. For a mid-stage VC fund (B-round investments or later) that’s considerably smaller than its top-ranked counterparts (with less than $1.5 billion under management), this performance is eyebrow-raising. Their no-nonsense approach is clearly paying off. “Building a massive marketing machine just isn’t in our DNA or aligned with the type of firm we’re seeking to build,” says Nino Marakovic, Sapphire’s CEO and Managing Director. “We are intensely focused on our investments and driving results.” Tom Chavez, CEO of Sapphire portfolio company, Krux, and a Harvard alum explains: “Nino and Sapphire are super-astute, no-nonsense, no-BS investors who don't get caught up on matters of ideology or conventional wisdom,” says Chavez. “They help me and my management group in much more substantive ways.” Rajeev Dham and Max Wessel: Helping Sapphire Companies Disrupt Their Way to the Top For Rajeev Dham, a Sapphire Vice President and Harvard MBA Class of 2013, market disruption is what really stands out about the investments he’s helped Sapphire make. “Every investment I’ve made has been a market-disruptor,” says Dham. “My first investment was Nutanix, one of the fastest-growing technology infrastructure companies of all time. Others include companies like Localytics, Krux and Qubit, which are at the forefront of providing one-to-one visibility into consumers across channels in order to improve their overall customer experience.” Clarkson and Dham are joined at Sapphire by Max Wessel (HBS MBA Class of 2011), a Vice President on Sapphire’s Marketing Development team. Wessel joined Sapphire from SAP, where he served as VP of Innovation Strategy. He previously served as a senior fellow at The Forum for Growth and Innovation, Professor Clayton Christensen’s HBS think-tank, and continues to write today for numerous publications, including The Harvard Business Review. In fact, one of Wessel’s notable articles was a 2012 HBR piece he co-authored with Christensen entitled Surviving Disruption, which features points and conclusions that are as salient as ever in 2016 for him and his HBS colleagues at Sapphire. Dham summarizes the Sapphire investment approach: “We tend to aim pretty high with companies that are taking on or re-shaping huge markets with the teams to execute on these opportunities.” Wessel, Dham and Clarkson are quite pleased though not surprised with Sapphire’s success in recent years. “Thankfully, the primary reasons I originally joined Sapphire – the focus on later stage and the high caliber of individuals – have proven out,” Dham says. Keys to Sapphire’s Under-the-Radar Success Of the 1,000+ VC and growth funds, how is it that Sapphire has found its way right at the head of the pack of top-performers? HBS Professor and VC expert Paul Gompers provides a clue. In his extensive writings about the benefits of specialization in venture capital, he states, “Increasing firm specialization enhances firm performance.” Gompers explains one reason for this is related to the firm’s ability to better exploit the timing of intra-sector shifts and market segment changes. This point is quite relevant to Sapphire’s success. While VC specialization is not unique to Sapphire, the firm has excelled in its unique ability to recognize and capitalize on key enterprise dynamics. Marakovic and Clarkson point to three enterprise market developments it has focused on as examples, including: Consumerization of IT (e.g., LinkedIn, Square, Localytics), Horizontal/Vertical SaaS (e.g., Docusign, ExactTarget, Five9, Socrata, IEX) and Business Intelligence/Analytics (e.g., Looker, Alteryx, Jaspersoft).
---------------------------Philip Levinson is an HKS alum and a Venture Advisor to Learn Capital. He has been a contributor to The Harbus since 2011, profiling a number of successful HBS-founded high-tech companies, including CloudFlare, Rent the Runway and ThredUp.
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