NVCA Member Spotlight: Mercury Fund

Welcome to our Member Spotlight series where we give a profile overview of our many diverse members. For this deep dive, we spoke to Aziz Gilani, Managing Director at Mercury Fund.

Tell us about your firm. What makes it different?

Mercury Fund is an early-stage venture capital firm focusing on software startups originating in the Midcontinent. With $300 million under management, Mercury targets SaaS, Cloud, and Data Science/AI platforms that make the industrial ecosystems of Middle America more competitive and efficient.

Over a decade ago, Mercury recognized the rise of entrepreneurs and innovation in the underinvested Midcontinent. Our investment strategy leverages our network of Midcontinent startup development organizations, corporate innovation partners, and co-investors to provide entrepreneurs with the resources they need to rapidly scale their businesses. We have spent our professional careers advising, mentoring, and investing in Mid-American entrepreneurs. We believe now, more than ever, the Midcontinent represents a great

capital opportunity.

Like many VCs, Mercury has spent a lot of time and energy in learning and sharing best practices between our portfolio companies and standardizing our approach for helping companies scale in a capital efficient manner. Part of this approach is through our annual software conference, the SaaS CXO Summit, which we sponsor with other Middle American VCs who share many of our same investment views and values.

Where did your firm’s name come from?

In naming our fund, we wanted to emphasize our commitment to being involved with disruptive, early-stage companies that are capable of rapid growth. Someone suggested the name Mercury and it really seemed to fit. In classic mythology, Mercury is the god of speed and commerce. It is also the first and smallest planet.

The Mercury name also has a special tie to our home in Houston. During NASA’s Mercury program, John F. Kennedy gave his famous Moon Speech in Rice Stadium, challenging a nation’s startup space program to commit to greatness. We believe that every great entrepreneur wants to change the world, so we were struck by the appropriateness of the president’s words.

What defines your portfolio?

Mercury invests in entrepreneurs and innovation originating in the U.S. Midcontinent, defined as the Southwest, Midwest and Rocky Mountains regions. Our firm has particular interest in entrepreneurs that are building their business around a strong regional technology and/or industrial ecosystem. If this ecosystem doesn’t exist locally where these entrepreneurs and companies are situated, we’ll leverage our expertise and relationships to help open secondary offices in locations with fewer barriers to securing talent, financing and business scalability.

How is the firm different today than when you first started?

Mercury was founded in 2005 as a seed-stage fund because we operated in an ecosystem that lacked seed capital. We were opportunistic about investments based on the unfair advantages in the middle of the country. Over our next two fund cycles, we developed a thematic approach so that we can strategically identify the best SaaS companies. Now that startup ecosystems in the Midcontinent are maturing, and seed capital is much more available, Mercury doesn’t have to be the first to invest. We can now invest after product-market fit has been achieved, and a startup is truly ready to scale. Because of our history with seed and early-stage companies, Mercury focuses a lot of attention on identifying gaps in ecosystems. We also have developed an Operational Playbook for post-investment activities, and have a stable of boutique, value-added service providers to help our companies improve their operational hygiene.

Why is your firm a part of NVCA? 

NVCA is the voice of our industry. Over the last decade, Mercury has seen the Midcontinent venture capital industry grow from a handful of firms to over a hundred active VCs. Organizations like NVCA help standardize forums and best practices for VC firms within our ecosystem and we are excited to be a part of it.

Tell us about the current VC landscape in your geography/region.

When Mercury was founded, there were fewer venture funds operating in the middle of the U.S., and a real lack of seed capital, so we spent a lot of time evangelizing the concept of venture at the seed stage. Once seed capital became readily available throughout Middle America, we modified our investment focus to post-seed startups who had achieved product-market fit. Our activities have matured as well since we now spend a majority of our time working with startups to help them scale.

What’s ahead for your firm in 2020?

Mercury is currently deploying Mercury Fund IV, which will be fully raised in Q1’20. We have made five investments to date throughout the middle of the country, and are actively seeking out early-stage software startups that fit within our thematic focus.

Describe your firm’s culture in 5 words or less.

Entrepreneur-minded, inclusive, teamwork, growth.

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