Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Parthib Srivathsan was recorded in May 2020.
Parthib Srivathsan, Co-Founder and Head of Platform at Companyon Ventures, discusses his firm’s investment thesis.
Sramana Mitra: Tell us a bit about your background as well as your firm.
Parthib Srivathsan: I’ve been involved with entrepreneurship for most of my career. I’ve been working with startups for about 18 years now, eight of which I spent as a founder at a learning and development services firm that I grew from scratch to an exit. This was back in India.
I came to the US in 2012. I’m now a co-founder at Companyon Ventures. Companyon Ventures is a Boston-based venture capital firm that invests in post-seed, pre-series A companies. Primarily in B2B startups. We typically invest in companies that are just past the seed stage but not quite the size of an A round.
Sramana Mitra: How big is the fund?
Parthib Srivathsan: We’re investing out of a $40 million fund. One key aspect that I should mention is that I help the Companyon Ventures platform team. This is a team of subject matter experts with competencies around sales and marketing, finance, and analytics. We are acting as an operational team for the investments that we make and helping them scale up quicker and more efficiently.
We typically invest in rounds that are usually $3 million to $5 million raises. We usually lead those rounds.
Sramana Mitra: Where do you invest geographically?
Parthib Srivathsan: We’ve been seeing deals all across North America. We also see a few deals in Europe as well.
Sramana Mitra: Talk a little about your investment thesis within B2B.
Parthib Srivathsan: We categorize ourselves as being sector and technology-agnostic. We pay more attention to business fundamentals. We look for companies that have a strong team, have a sustainable business model, have strong market team supporting them. We don’t invest in B2C, healthcare, or life sciences.
Sramana Mitra: What about stage? What do you want to see in a company that is trying to raise a $3 million round that you would be leading?
Parthib Srivathsan: If I had to describe companies that we invest in, we’re looking for capital-efficient companies that have launched and have early evidence of product-market fit. In terms of numbers, this typically translates to companies that have a million to $3 million in revenue, and are specifically raising the capital to double or triple their revenues in the next 12 to 18 months.
Sramana Mitra: Let’s do a few case studies of companies that you have invested in. As you describe these, tell us when did you see them. How did you find them? What did they have that convinced you that you wanted to write the check?
Parthib Srivathsan: In terms of deals that we see, we fill a vital gap in the venture ecosystem right in between seed and Series A. We have very strong relationships with other venture firms. We have relationships with Series A firms that have identified companies that are really interesting but don’t quite check the boxes yet.
Similarly, we got a very strong network of angel investors and seed investors. We look at portfolio companies that are at the stage that we look for. These are two primary deal sources that we work off of. Our most recent investment is a really exciting company. It’s called RoadSync. They’re an Atlanta-based startup. They’re in the digital payment platform for the transportation industry.
We’re really excited about the deal. They checked all the boxes as far as our investment thesis goes. They have a great product. They have great market traction already. They are solving a problem. They were essentially bringing an industry to the 20th century. The problem is taking a really manual, paper-based transaction and making that completely digital, which is really exciting for us. They had very good prospects in terms of growth.