The potential worth a star investor can carry to a shopper firm, past simply writing a verify, is clear: advertising and marketing and promotion. But that worth is much less clear relating to backing B2B startups. Alex Pall and Drew Taggart, also referred to as the Chainsmokers, assume their VC fund Mantis VC can carry a worth add conventional VCs can’t.
At TechCrunch Disrupt 2024 alongside one among their founders, Dan Lorenc, the co-founder and CEO of cybersecurity startup Chainguard, Pall mentioned that the group initially received into B2B investing as a result of they received uninterested in feeling just like the QVC of startups working with shopper firms that simply needed to work with them for promotion.
The duo grew to become more and more occupied with B2B as a result of robust market alternatives in that area regardless of not having a lot expertise with these sorts of companies.
“It felt like a market opportunity to kind of stand out and maybe provide, you know, a different perspective or different type of value back to those types of companies,” Pall mentioned. “Our strategy and the way we model our fund is to kind of be this like Robin to everyone’s Batman, and kind of provide a different level of support and perspective and connectivity that maybe the traditional fund isn’t so focused on.”
Taggart added that they aren’t seeking to be the subsequent Sequoia both, as a result of that agency already exists and comes with a sure degree of worth.
“Our goal at Mantis was to just get into these deals, outwork every other person on the cap table, figure out whatever scrappy way we could add value, and then in the hopes that our founders would turn around and kind of help us build our brand within that community,” Taggart mentioned.
One space the place they assume they may also help firms is thru their community. Pall mentioned that the Chainsmokers have performed non-public exhibits for just about each Fortune 500 firm. And whereas they didn’t consider it as constructing a community for investing on the time, they’ve since been in a position to join their portfolio founders to those firms.
“It worked out really well for us, because these are, you know, some really powerful decision-makers or leaders in their respective spaces,” Pall added.
Lorenc backed up these statements, too. He added that they’ve not solely been useful in making introductions for him to potential clients however they’ve additionally been useful on the hiring entrance, too.
Lorenc’s firm as soon as wasn’t certain they had been going to land a potential worker as a consequence of a compensation disagreement. But they had been in a position to get this candidate over the road after he obtained a five-minute Cameo video of Pall on why he ought to be a part of.
“You don’t want to be Sequoia,” Lorenc mentioned. “There’s already Sequoia. You invested in us at the same time Sequoia did. Sequoia is great. They have an amazing platform, team, amazing network, all of that. But when you have enough of those investors, it starts to overlap, and you kind of get diminishing returns. It’s the same network, and the way I describe you is a completely different one.”
The Chainsmokers hope that these early B2B investments that they’ve made assist them get taken extra critically within the area to allow them to proceed to construct out that portfolio.
