- SineWave has raised $60 million to invest in enterprise start-ups.
- Founder Yanev Suissa says Trump's goals to improve procurement are good, but he's left too many open positions.
Tech start-ups and venture investors typically fear the government. But a new firm called SineWave Ventures wants to bridge the Hill and the Valley.
"We all know how the Valley feels about government. Funds hire expensive consultants to navigate the black box of Washington D.C. But things don't always work out. Then they are left with scars," said founder Yanev Suissa, a senior investment officer in both the Bush and Obama administrations. "But you ignore the government at your own peril."
In one famous example, a Supreme Court ruling put Aereo out of business in 2014, after the NYC start-up had raised $97 million in venture funding. The company's TV-over-the-internet service violated copyright laws, the court found.
President Trump's impact on tech and venture capital could be positive, Suissa suggested, if he delivers on the goal of simplifying how the government buys technology. However, Suissa said Trump needs to hire more qualified people, and fast.
"Trump needs to hire the executive level of the government below the secretaries if he hopes to accomplish this, and should choose folks with honed skillsets for public sector transformation. Unfortunately, his hiring is way behind, and he seems to dismiss candidates who have any such experience on the grounds that they are pure insiders."
He continues, "You can't just have one captain trying to steer a massive fleet of thousands of idiosyncratic ships, especially if he is hiring real estate developers to do so."
SineWave should have no problem making deals during any administration, Suissa believes. "Everything we do increases performance and lowers costs for the public sector, which is completely non-partisan," he explained. "Besides, the people who really matter to getting things done, who control the actual spending [by the federal government], are civil servants who don't turn over every administration."
He reminds companies that the federal government is a huge potential customer.
"They...spend $170 billion on new technology every year, a number that's expected to climb higher with cybersecurity concerns."
While Suissa made it known he planned to start his own firm back in 2014, he only closed SineWave's first fund at the end of 2016. The firm now has $60 million under management, Suissa told CNBC, and is investing in early stage, enterprise tech companies.
Suissa jokes about the name and logo he designed for his firm. It takes the shape of a sine wave, which looks like a hill connected to a valley, but also a roller coaster.
"Government can make a huge impact on your company. If your competitor gets it, is running faster, has revenue and are growing you may not get the chance to change the government's mind. If you don't work on it early, you may be regulated in a way that's not sensible."