OpenView, Data Point Capital Betting on Metrics in Fickle VC World
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Internet businesses in retail and other fields.
The Boston venture firm, which runs a $50 million fund, was started last year by Scott Savitz, the founder and former CEO of e-retailer Shoebuy (bought by IAC in 2006). Savitz’s experience also includes the mortgage business and bond markets, so he knows something about using metrics to make investments.
Data Point Capital recently invested in a $1.25 million round for advertising startup Jebbit, and a $5.5 million round for Vee24, a company specializing in video-chat systems for e-commerce customer service.
“We don’t follow the crowd at all,” Savitz told me. Rather, the science and performance metrics have to “point to the business being able to scale.”
In Vee24’s case, he’s talking about doubling revenues, consistently high conversion rates for customers, “25 percent-plus increases in average order value, up to 8X [return on investment] for online retail, and record customer satisfaction scores.”
In general, Savitz adds, “It is the metrics like top-line [revenue], bottom line, new customer acquisition, customer retention, repeat buying, conversion, average order size, lifetime value, margin, [expenses] as a percentage of revenues, and customer satisfaction” that are most important in assessing companies.
Still, metrics aren’t everything. Look at who Savitz helped bring on as CEO to run Vee24 in Boston: James Keller, the former chief marketing officer of Shoebuy. Keller and Savitz worked together at their previous company for about seven years.