Pete Musser’s latest startup investment reminds him of Novell.
That’s high praise from Musser, 88, the legendary founder of Safeguard Scientifics, since many describe his early investment in the networking company as his crowning glory. Less than a decade after Musser invested $7 million in the company, Novell had 80 percent of the desktop market and its stock ballooned from $2.50 to $500 a share.
That was in the 1980s. Today, Musser’s quiet on the investment scene. He invested in Wayne-based BizEquity last fall and now, he’s invested in Cleveland-based Acceleration Systems. He’s also chairman of the board. Those are the only two startup investments he’s made in the recent past, he told us. Acceleration Systems sells software that makes the internet faster.
So what’s the connection between Acceleration Systems and the Novell of yore?
They both offer (or, offered) a tech solution that all small to medium-sized businesses need, Musser said. Plus, it’s at a low-cost ($100/month, compared to the quarter-million dollar products that do the same thing from companies like Riverbed and Blue Coat). It’s the type of technology that will help businesses scale faster.
Acceleration Systems raised $3 million from Musser and angels in Philadelphia, Miami and Washington, D.C., said CEO Mike Kister over the phone last week. Half of the $3 million round was raised from members of the Keiretsu Forum, a national angel network with local chapters, including one in Philadelphia, while the other half came from Musser and his network.
Kister, 45, of Cleveland, met Musser through a mutual friend and started talking to him about the company back in 2013.
He opened up an East Coast sales office in Wayne to be closer to Musser. Two people work out of the Wayne office, while the rest of the 12-person team is in Cleveland or remote. He said he splits time between the two offices. (“I live in Hyatt Hotels,” he joked,” but my cats are in Cleveland.”)
As for Musser, what does it take to catch his investment eye nowadays?
He’s looking for a company that “answers an obvious need and doesn’t take barrels of money to do it,” he said.
“Anything that’s gonna take $100 million, obviously I’m not interested in that,” he said.
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