OneFund recently sat down with Adam Coccari, a General Partner at Seattle-based SeaChange Fund, a Pre-Seed to Series A venture fund investing in the Pacific Northwest. Before joining SeaChange, Adam began his career in VC at M12, Microsoft’s corporate venture capital (CVC) fund as an Operating Partner and Investor. We had the chance to chat about SeaChange, his career, and what excites him about venture capital today.
Check out our conversation below!
OneFund: Can you share a bit about SeaChange Fund and your role there?
Adam: SeaChange fund is an early-stage VC fund investing in Pre-Seed and Seed stage startups across the Pacific Northwest. We invest in technology businesses of all types but focus primarily on software and marketplaces. We have a strong belief in the immense opportunity and growth in the startup ecosystem across Seattle, Oregon, Vancouver, and the rest of the PNW.
I am one of three General Partners making investments and managing our business operations. One of the things that makes us unique is that we actively solicit the input and support of our investor/LP base, which we call ‘collaborative capital’. Many of our LPs are current or former tech executives and entrepreneurs, and their expertise can be very helpful in getting up to speed on a new area or pressure-testing our ideas. We believe this has positively influenced our decision making and historical investment returns.
OneFund: What does the VC and startup ecosystem look in the Pacific Northwest?
Adam: Overall, the ecosystem in Seattle and the Pacific Northwest is thriving and I don’t think there has ever been a better time to build a startup here. Big Tech has brought so many talented and driven people here over the last 10 years. With recent shifts in the market, we are seeing many people within these companies realize their greatest opportunity is to work at a startup or create something on their own. Additionally, a lot of innovation comes out of The University of Washington, The University of B.C., and A.I. research labs like the Allen Institute of Artificial Intelligence which feeds directly into the startup ecosystem.
The VC community here is comparatively small and more collaborative, which I really enjoy personally, but there is a lot of opportunity. We are starting to see new funds launch and existing ones raise larger funds, but it still feels like there is room for more given the level of talent and companies that are continuing to launch and grow in the Pacific Northwest.
OneFund: What were some of the pivotal moments in your career journey to SeaChange Fund?
Adam: I always loved to create and build things growing up, but my journey to SeaChange really began when I was 3 years out of college working as a math teacher and decided to build and launch an app during the early years of the app store. I took my life savings and built Math Evolve, a game to help kids practice math. Although it was modestly successful, the real impact was that it ignited a passion for creating new software products and building companies.
I then had the incredible opportunity to join Microsoft out of business school in 2014. It was right when Satya Nadella started as CEO, and I got to experience the monumental shift of their business model to the public cloud. After spending some time in product management and strategy roles learning about enterprise software and cloud services, I had the opportunity to join M12 as a founding team member and build a financially-focused VC firm within Microsoft. This was a huge stroke of luck which helped lead me to where I am today.
At M12 I had the privilege of working closely with so many talented and ambitious people at our 130 portfolio companies across the globe. This honed my understanding of how ‘great’ startups operate, and it sharpened my pattern recognition and investing skills given the large number of deals and companies we evaluated over my five years.
OneFund: What are some of the biggest differences between a CVC like M12 and an independent GP like SeaChange Fund?
Adam: First and foremost is the obvious: I now must raise capital from outside investors. This takes time and mental energy away from investing and supporting founders, but it also makes the outcomes and incentives very aligned between all parties. At times, CVCs will invest as tourists or to further their own secondary/strategic objectives; this is never the case at a financial VC because all the GPs all have their own capital invested in each deal, and we are committed to a portfolio company’s long-term success.
Second is that Microsoft’s brand name and gigantic platform was a huge advantage in seeing opportunities and winning competitive deals. M12 very much relied on this. I think this is also true of new partners joining large institutional VCs. As an emerging manager of a small fund, it is 100% up to me and my partners to find and win deals based on our personal reputation and ability to support founders. I am really excited to build this from the ground up in Seattle. We plan on innovating with our support model by further expanding our expert network and building unique products and services for our portfolio companies to leverage. Success will also require us to continually nurture relationships within our ecosystem and ensure that our founders will go to bat for us when needed.
OneFund: What emerging technologies most excite you?
Adam: I am not alone here, but I have recently been blown away by the new wave of A.I. models for generating unique images from text prompts and other sources. I am already using them myself for novel use cases and having a lot of fun, but I believe the implications of this have not been fully grasped yet. Artists will always be needed but the nature of this work will change, and the rate of content creation by individuals is going to continue to grow exponentially. I am excited to see how these models evolve and what entrepreneurs use them for, along with similar innovations for synthetic audio and video.
On the enterprise side, I am firmly on team ‘remote work,’ and don’t think we are ever going to see the return to the office as we knew it pre-pandemic. I see room for many new innovations to improve the experience for hybrid teams. Things like new collaboration modalities and tools are exciting to me, along with new real estate and ownership models to support people’s nomadic lives. This is an area I am investing in actively today.
OneFund: How has the current economic situation affected investing at SeaChange?
Adam: We have continued to invest in the boldest founders at the same pace with similar check sizes. The slight pullback has given us more time and leeway to do deeper due diligence though, which has always been a strong suit of our fund. I believe that the return of rationality to the venture/startup market is a good thing for all involved.
OneFund: Given the current environment, are there certain industries you are more or less bullish on?
I continue to be bullish on vertical SaaS for businesses and industries of all sizes, especially the long tail of creators. This includes financial services and intelligent assistants to help solopreneurs be more successful and efficient. I am also always following the latest in open-source software for developing and managing cloud applications, as software engineers will continue to be the innovation engines for all companies in the next 30 years.
Web3 and ‘the Metaverse’ clearly saw extreme amounts of hype and investment. While I don’t think many of the products we saw launched last year have much usage and value today, I am bullish overall on some of the underlying protocols and new paradigms for rewarding users that will remain. I think a lot of this will be led by gaming, and arguably the Metaverse has been here for the last 10 years in the form of MMOs. Web3 is kind of a dirty word among gamers right now, but I expect to see the next wave of games to seamlessly blend great gameplay with the ability to own and monetize content in the form of NFTs and utility tokens.
As you can probably guess from my thoughts earlier in our conversation, I am not bullish on Commercial Real Estate and associated software companies.
OneFund: What comes next for you and for SeaChange Fund?
Adam: We are currently investing out of our 8th fund and working on what the next one will look like. We’ll have more to share on this in 2023! If anyone is interested in getting in touch, you can reach me at Adam@seachange.fund