Welcome to our Member Spotlight series where we profile the exciting work of our member firms. For this deep dive, we spoke to Sean Dempsey, Co-Founder and General Partner, at Merus Capital to learn more about his firm.
Tell us about your firm. What makes it different?
At Merus, we invest in early-stage enterprise AI companies. We believe that we’re at an inflection point in this sector given recent breakthroughs in model architectures, compute capacity, edge bandwidth, and training capabilities like federated learning.
From a team perspective, we’re the only venture capital firm founded by the former leaders of both Google and Microsoft’s M&A and Strategy teams. Before founding Merus, my partners and I led well over one hundred deals, including the acquisitions of YouTube and Android while at Google. Our team also combines deep operational startup experience as well as AI expertise from Google Research. It has been gratifying to leverage this unique blend of experience in our work with founders to help build companies from the ground up.
What defines your portfolio?
All of our companies are solving real economic problems for their customers across a variety of industries. They also have highly sophisticated technical teams – something that’s an important part of our investment thesis. We like to say we invest in technology that’s “hard to build, but easy to scale”. This often means that the product is technically complex enough to create a competitive moat, but easy for customers to implement and use.
Geographically, approximately 75% of our current investments are in the U.S. and 25% are in Europe.
Tell us about the current VC landscape in your geography/region.
It’s certainly an interesting time to be in venture capital. While our office is on Sand Hill, we invest across the U.S. and Europe. Our first fund was invested exclusively in Silicon Valley-based companies. This focus shifted in later funds as our reputation grew and we became more accustomed to evaluating and managing investments globally. The pandemic has obviously accelerated this evolution. From an investment and company formation perspective, geographic boundaries have fallen away. Every day we meet startups that have, say less than 10 employees, and yet they may be resident in five or more different physical locations.
What are the benefits of being an NVCA member?
We appreciate the opportunities NVCA provides to connect with others in the community. It’s helpful to hear about what other firms and GPs are up to and to connect on best practices, particularly now as the VC industry is evolving based on the new way startups operate. We also appreciate the policy and advocacy work that the NVCA spearheads in support of early-stage innovation.
What’s ahead for your firm for the rest of the year?
Our current fund, Fund IV, is our largest portfolio to date. We’ve just completed our 35th investment in the fund, and like many firms, we’ve seen a very high cadence of new investments in the last 18 months. We’re also very excited about the continued growth of our team – we’ve doubled in size over the last couple of years and we plan to add another few key roles in the coming year. Everyone at our firm has known each other for at least 10 years, so we’re a tight knit group and very much enjoy bringing a team approach to venture capital.
Robin serves as the Communications Manager at the National Venture Capital Association, where she enhances day-to-day external and internal relations for NVCA while utilizing her expertise in content creation, storytelling, and data to elevate NVCA’s long-term communications strategy. As a conscientious leader, Robin is integral to the forward-looking investments NVCA makes in the greater venture capital and startup communities.