Sean Jacobsohn, a partner at Menlo Park, California-based venture firm Norwest, said in an interview that he looks for next-generation business applications that can take on entrenched providers, and he tests a CEO’s sales ability before investing, according to Crunchbase News. Norwest, founded in 1961, manages $15.5 billion and is investing out of its 17th fund, a $3 billion vehicle raised in 2024, according to Crunchbase News.
Background and Norwest remit
Jacobsohn worked at HR software startups before he began investing in them, and he held senior roles at WageWorks and Cornerstone OnDemand as both companies grew from single-digit millions in revenue to tens of millions, according to Crunchbase News. Jacobsohn also worked at Upwork, and all three companies went public, according to the same report.
He later became a venture partner at Emergence Capital before joining Norwest in 2014, according to Crunchbase News. As a Norwest partner, Jacobsohn focuses on enterprise software and draws on a background in finance, sales and business development, according to Crunchbase News.
Jacobsohn said he has 15 active portfolio companies that range from pre-revenue startups to businesses generating more than $300 million in revenue, according to Crunchbase News. Much of his portfolio falls within finance and HR software, although he also invests in supply chain and construction technology, often in companies building finance applications for those industries, according to the report.
Where Jacobsohn sees openings in finance software
Jacobsohn said he is focused on companies disrupting legacy players in the office of the CFO, and he said there are many legacy players in that area, according to Crunchbase News. He said Norwest had more than 500 companies on its Office of the CFO market map and that probably three-quarters of those were legacy players, according to the interview.
Jacobsohn said that in finance the CFO approves all software purchases across an organization, but CFOs also buy software for themselves, and there is one less layer of approval when they are buying their own software, according to Crunchbase News. He said this makes it a little easier to replace software when the CFO is the direct buyer, according to the interview.
Jacobsohn said he has found opportunities in finance software that sells to every industry and in software focused on specific industries, according to Crunchbase News. He said he has invested in many horizontal applications and that the vertical solutions have been in construction and manufacturing, and he also said Norwest has invested in healthcare but that it is not his area of focus, according to the interview.
On workflow automation, Jacobsohn said he thinks most workflows have been automated, but some have been automated by legacy solutions, and some could still be on-premise, according to Crunchbase News. He said some companies are making a transition from on-premise to the cloud and are still very legacy, and he said a company can be considered legacy and be only five to 10 years old now that a lot of the new generation is AI-native, according to the interview.
Jacobsohn said every company wants to buy AI-native products, and he said some legacy companies have done a better job of reinventing themselves while others are having more difficulty, according to Crunchbase News. He said that because most everything has been automated by someone, he is focused on new-generation disruptors of legacy solutions, according to the interview.
Categories he flags: ERP, sales tax, treasury management, procurement
Jacobsohn said one area where he does not have a portfolio company is ERP, and he said there is a potential opportunity to disrupt NetSuite and Sage because those companies have been around for a very long time, according to Crunchbase News. He said he is seeing more disruption downmarket and that some of these companies will eventually move upmarket, according to the interview.
He said sales tax is another category with ancient legacy players where there is an opportunity to disrupt them, and he also said treasury management has very old legacy players, according to Crunchbase News. Jacobsohn said another area he has invested in is procurement, according to the interview.
AI in accounting and the need for consistent answers
Jacobsohn said finance is particularly sensitive when it comes to accuracy and audits, and he discussed how much work companies will hand over to AI agents in accounting, according to Crunchbase News. He said finance people are risk-averse and need consistent answers, and he said there is concern that there could be errors with AI and that there are errors, according to the interview.
Jacobsohn said it is important to infuse AI into finance products, but he said companies have to be careful about doing so, according to Crunchbase News.
