We invest early and roll up our sleeves immediately to  
 get you to market faster 

Strategy

Differentiated Approach

YL Ventures invests early in core-technology software companies in and around the Internet. Our specialization is transforming proprietary software technologies into game changing online services, while leveraging our highly-relevant Silicon Valley business network for introductions to customers, strategic partners, key hires, top-tier investors and potential acquirers.

 

We work closely with all of our portfolio companies in building successful ventures. We do not believe in a ‘spray and pray’ investment methodology, but rather employ a highly selective ‘cherry picking’ approach.

 

Ability to Evaluate a Wide Array of Growth & Exit Alternatives

 

We understand that successful startups come in lots of shapes and sizes.  Some grow to become billion-dollar (or more) enterprises.  Some achieve their destiny otherwise.  We are knowledgeable and experienced in creating value for our founders and for ourselves in a wide range of exit scenarios, by strictly adhering to capital efficiency early-on and focusing primarily on deep-technology B2B SaaS portfolio companies.

 

When entrepreneurs choose to partner with YL Ventures, they know that their investor will support them in whichever exit strategy ultimately makes the most sense for their company, including the following two scenarios that we have come to know particularly well:

 

  • The Short Haul – Due to capital efficiency, oftentimes our initial investment is sufficient to take a portfolio company to profitability or close to it. In this case, founders may opt to continue growing organically in capital efficiency mode until a short-term mid-size ($20MM - $100MM) exit opportunity – normally an early buyout by a strategic acquirer or a growth equity fund. In most cases, having unique proprietary technology helps make a portfolio company a likely target for such exits. YL Ventures keeps potential buyers ‘in the loop’ from the very beginning, thereby increasing the likelihood of such scenarios. In short-term mid-size exits, YL Ventures achieves excellent multiples on investment, while founders experience great wealth creation since at the point of exit they still own a large portion of their company. It’s a win-win-win situation for the founders, the buyers, and us. Naturally, this scenario is not available to start-ups that raise large amounts of capital early-on.

 

  • The Long Haul – Sometimes, shortly after our initial investment, it becomes apparent that the business opportunity with regards to a portfolio company is extremely large, and the founders decide they want to ‘swing for the fences’, potentially aiming to create a billion-dollar company. In this case, we facilitate further growth acceleration by investing additional capital in partnership with top-tier global venture capital firms that we introduce who are eager to invest significant amounts of equity in companies which we have shepherded to this stage. We help lead the negotiations with these VC firms, and do so in a manner ensuring that YL Ventures retains significant value-added involvement in the business after this new money is brought in. As long as capital efficiency is maintained in the early days, later-stage investment rounds are done at much higher valuations, assuring that the founders and YL Ventures experience minimal future dilution.

 

We see ourselves as true hard-working allies of our entrepreneurs, rather than as purely financial investors. Therefore, we seek complete alignment with company founders at every step of the way, and tend to avoid the common pitfalls of the entrepreneur-investor relationship. Our tolerance for myriad exit scenarios, both small and large, helps ensure that this vital alignment with founders is maintained.

Case Studies



On May 9, 2011, Limelight Networks, Inc. (Nasdaq: LLNW) acquired AcceloWeb, Ltd., a YL Ventures portfolio company since our initial investment in July 2009.

In the press release, Limelight said: "The talented AcceloWeb team has built the most innovative solution in the sector and we are excited to join forces with them to define best-in-class for this market." AcceloWeb was quoted saying: "We're pleased to join Limelight and continue our work building Internet scale software that improves end-user experiences on the Internet." The press release went on to say, "YL Ventures, headed by Yoav Andrew Leitersdorf, participated in the transaction as an investor, strategic advisor, and board member."


When we made the initial investment in AcceloWeb, Limelight was within the top two on our list of potential acquirers, along with Akamai Technologies, and so we had predicted that AcceloWeb's most likely acquirer would be a Content Delivery Network.

Starting in the due diligence phase and throughout the life of the investment, we have introduced AcceloWeb to over a hundred potential customers, partners and strategic acquirers, in order to rapidly bring AcceloWeb’s technology to market. This process not only helped establish AcceloWeb in the marketplace, but also helped guide AcceloWeb’s product and technology roadmap and put the company on a direct ‘collision path’ with the CDNs.
 
About halfway into the investment, YL Ventures identified and recruited into the company a top sales executive based in Boston, MA, who had previously spent 10 successful years in various senior sales roles, including VP of Global Channels, at Akamai Technologies.  His terrific execution was a major contributor to Acceloweb’s growth and market penetration.
 
We believe that Limelight’s acquisition of AcceloWeb is a direct result of three major factors: First, the high quality and superior performance of AcceloWeb’s technology as developed by its excellent founders. Second, the live market feedback that AcceloWeb received throughout the life of the investment from dozens of potential customers, partners and acquirers. Third, YL Ventures’ value-added role over the life of the investment, a role which culminated in leading the negotiations with Limelight.



On On April 30, 2013, ClickTale announced a $17MM Series B financing transaction with Amadeus Capital Partners, Goldrock Capital and Viola Credit. As part of the deal, YL Ventures and other shareholders sold a substantial percentage of their holdings.

 
ClickTale was YL Ventures’ first investment, dated November 2007. The two excellent founders had innovative customer experience analytics technology within a market ripe for disruption. Their SaaS business model was superior to the competition’s due to its flexibility and ease of implementation.
 
ClickTale was launched after raising only $800k in total funding, mostly from YL Ventures.  Over the years since, the founders’ strong execution and YL Ventures’ value-added role led the company to achieve hyper-growth and a strong market presence. ClickTale has been profitable since 2009, and had over $10MM in bookings in 2012.
 
We have worked closely with management, providing guidance in key SaaS areas such as product roadmap, KPI (Key Performance Indicators) measurement, pricing strategy and sales funnel optimization.
 
We also introduced the company to dozens of its customers, partners and key hires. Some of ClickTale’s 80,000 customers are T-Mobile, CBS, Lenovo and Microsoft, and partners include Adobe, IBM, Google and eBay.
 
In the press release of the Series B transaction, Amadeus Capital said: “ClickTale highlights the attractions of the leading companies that underpin successful internet-based businesses. It also illustrates the compelling strengths of the Software as a Service business model.” ClickTale added: “The support of our founding investor, YL Ventures, has been a major factor in our success to date.”

YL Ventures is not a typical venture capital firm. They go beyond the call of duty in critical business areas such as business development. We feel aligned with YL Ventures in strategy since we all share similar goals and aspirations."

Amos Peleg
Co-Founder and CEO
Upstream Commerce