The Big 3: Demand Generation

In our last post, we touched on some of the operational scaling challenges associated with nearly every growth-stage tech-enabled services (TES) businesses. Today we turn our attention to the last and arguably the most ubiquitous growth imperative, demand generation.

So what exactly do we mean by demand generation? Let’s start with what it’s not. If you’re the owner-operator of a SaaS or TES business that’s growing at over 20% and approaching profitability, your marketing and sales team has already demonstrated its ability time and again to get well-qualified leads over the line. Also, in many instances, that first $5 million or even $10 million in revenue was sourced from the team’s personal network, hyper-focused cream-skim marketing tactics and a lot of heroics. Smarts, focus and scrappy execution has gotten you to this point. Getting to the next level requires more than guile; it necessitates that you institutionalize what has made you successful while you develop new systems, processes and measurements to scale your demand generation efforts. Demand generation, however, is not a euphemism for marketing and sales execution.

If you are like CEOs of most companies that have achieved initial market success, you may find yourself asking the following questions:

How do we open the aperture at the top of funnel and identify high probability buyers?

Where will our next $10 or $20 million in revenue come from?

Have we used our initial market success to clearly define or refine our positioning strategy?   What long term business are we really in?

Where are we investing today; product vs. marketing, brand/messaging vs. campaigns/events?

Do we understand how buyers become customers?

What do they need in order to make an informed buying decision?

What role do our customers and our team members play in promoting the brand’s value?

These are just a few of the questions that must be answered before you can confidently invest in bending the growth curve. In order to build upon that initial market traction, many companies fall into the trap of focusing their growth initiatives on lead gen programs; experimental digital marketing campaigns, conferences and promotional events only to be disappointed with the results along with wasted time, energy and capital. Often confused with lead gen, demand generation is, on the other hand, a fundamental company-building block where positioning strategy, product, a deep understanding of the customer experience, content marketing, behavior-based nurturing, funnel management and conversion management align to form the foundation for accelerated growth.

Much like the other Big 3 scaling imperatives, demand generation is an organizational discipline. “Repeatable and scalable” should be the universal mantra. Unlike the other two,  team development and operational scaling, which left unchecked can be growth inhibitors, demand generation is a “force multiplier” growth catalyst. When done well, the impact on top line revenue, profits and value creation is significant and material. This cannot be overstated.

So what’s next? Well, there are no silver bullets here. As was mentioned earlier, demand generation is an organizational discipline and you must first assess the team’s readiness to develop and execute each of the components of a demand gen and content marketing strategy. Rest assured you are not alone. Most of this is very new to even the most experienced marketing professionals. Identify a thought leader – inside or outside the company – to help guide you through a step-wise process of both introspection and action. Start by deeply inspecting the customer segments in which you have been successful. Seek to understand the journey that the buyers of your services traverse. Getting to the right demand generation strategy requires a deep appreciation of your market, your customers and future buyers by everyone in the company – top to bottom.

As we’ve said before, the secret sauce for any of The Big 3 isn’t just figuring out what the hurdles are but also how to empower your team to take up the gauntlet to address these critical success factors in the most expedient, capital efficient and durable fashion. In doing so you’ll also help ensure that every invested and/or re-invested dollar in the business will generate the highest returns.

In future posts, we’ll expand our discussion of The Big 3, delving a bit deeper into each one. In the meantime, you can find more resources and growth perspectives for your business at The Growth Equity Blog and the Workhorse Capital Blog.

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Datavail Announces Acquisition of AdvancedEPM Consulting

On March 6th, 2017

Oracle Consultancy Deepens Expertise in Enterprise Performance Management

BROOMFIELD, Colorado, and CLEVELAND, Ohio – March 6, 2017 – Datavail, a leading provider of managed services for database management, analytics, and application life cycle management, today announced the acquisition of AdvancedEPM Consulting, an Oracle Platinum Partner focused on Oracle Enterprise Performance Management (EPM) solutions.

The acquisition of AdvancedEPM is part of Datavail’s growth strategy to build on Datavail’s core capabilities in data and application operation and integration. AdvancedEPM’s expertise in Oracle application cloud implementation and customization will be combined with Datavail’s expertise to create an end-to-end application life cycle offering to support the Oracle EPM solution stack.

As a Platinum-level member of the Oracle® PartnerNetwork and an Oracle Accelerate solution provider, AdvancedEPM has extensive, hands-on application expertise, deep functional knowledge, and integrated technical skills across Oracle’s Enterprise Performance Management product suite. Founded in 2007, AdvancedEPM has core competencies in the Oracle Hyperion Planning, Oracle Essbase, Oracle Hyperion Financial Management, Oracle Data Relationship Management products with application and industry specializations in Accelerate for Midsize Companies, Financial Services, High Technology, Natural Resources, Industrial Manufacturing, Chemicals, Wholesale Distribution, Consumer Goods, Oracle Planning Budgeting Cloud Services (PBCS), and Enterprise Performance Reporting Cloud Service (EPRCS).

AdvancedEPM recently launched the Oracle-Hyperion EPM Toolbox 3.0, which is a collection of tools that simplify the administration tasks associated with managing and supporting EPM solutions. The toolbox is designed to help system administrators be more efficient and productive by providing pre-built utilities and scripts.

“AdvancedEPM is one of the leaders in helping companies leverage Oracle’s cloud-based planning and budgeting solutions, and has some of the most experienced consultants in the Oracle Hyperion space,” said Scott Frock, COO of Datavail. “We are excited to add them to the ever-growing Datavail team as part of our Oracle services expansion.”

Datavail manages the data services for hundreds of clients, both on premise and in the cloud, and works with those clients on comprehensive, end-to-end managed operations, and support.

Todd Rebner, Founder & CEO of AdvancedEPM, will remain with the organization to head Datavail’s EPM Practice. “I am excited to be able to combine the strength of AdvancedEPM consultants with Datavail’s support platform to fill a gap in the market for full-service Enterprise Performance Management services,” said Rebner. “The nimbleness of AdvancedEPM in helping customers quickly and efficiently implement EPM solutions will be strengthened by Datavail’s mature managed service capability.”

This acquisition is the third by Datavail in the past year. It acquired Art of BI, an Oracle Business Intelligence (BI) consultancy, in July 2016; and Navantis, a Canadian-based Microsoft consultancy, in January 2017. The acquisitions were enabled by Datavail’s new $47 million capital funding round in December 2015 designed to enable future growth initiatives, including expansion into markets adjacent to the database and enterprise data management services market.

About Datavail

Datavail provides a broad range of services in support of databases, analytics, and applications and specializes in Oracle, Oracle E-Business Suite, OBIEE and OBIA, Hyperion, Microsoft SQL Server, MySQL, MongoDB, DB2 and SharePoint. Datavail is a leading provider of data integration and database administration services in North America, offering 24×7 managed database, applications and BI/DW services, design, architecture, and staffing. With more than 850 employees on payroll and core operations in four countries, Datavail offers deep technical expertise in a flexible, agile engagement model that focuses on customer success. Founded in 2007, Datavail is based in Broomfield, Colorado and supports enterprise clients located worldwide. For more information, visit www.datavail.com.

About AdvancedEPM Consulting

AdvancedEPM Consulting, Inc. is a premier information technology conusulting firm and Platinum-level member in OPN, exclusively focused on Oracle Hyperion Enterprise Performance Management (EPM), Enterprise Resource Planning (ERP), Human Capital Management (HCM), and Business Intelligence (BI) solutions. AdvancedEPM Consulting distributes the Hyperion Toolbox 3.0 diagnostic software to its customers. For more information, visit www.advancedepm.com.

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The Big 3: Operational Scaling in Your SaaS or Tech-Enabled Service Business

In a prior post on the the Big 3 challenges common to nearly every growth-stage tech-enabled services (TES) businesses, we explored the importance of building and developing your team.

In this post, we’ll focus on a second growth imperative, operational scaling. Bending the growth curve to double, triple or quadruple revenues presents a new set of operational challenges for your business. Some are more obvious than others and, in fact, the “below the radar” hurdles left unchecked can pose the most troublesome and lingering impediments to your scale-up plans.

A Common SaaS/TES Scenario

Let’s start with a typical scenario; your TES operation is humming along at over 20% growth and you’ve just broken through a much anticipated revenue barrier, maybe its $5, $10 or $15 million. We’d all agree that, in most cases, the current organization, business processes and systems at $10 million won’t necessarily work as well (or at all) at $20, $30 or $50 million. We can some shed light on what to do about it and when by asking ourselves a few fundamental questions:

How should you think about developing a proactive yet measured approach to scaling the business?

How does your business strategy reflect the operational reality? Is it tailored to your operational competencies, assets, and processes?

Do you understand the link between your growth strategy and execution quality?

What are the most important and most challenging factors to mitigate scaling risks?

Your company’s ability to bend the growth curve is rooted in a healthy understanding of the current operational realities and the state of your change-capable organization. Can you add team members, new processes and systems while preserving everything that is special about your current, nimble unit? Any unforeseen issues with an evolving organizational and operational dynamic could divert your energies, the company’s focus and waste precious growth capital dealing with the necessary course corrections.  And while the focus in clearly on top line growth, you may have to prepare your team from the bottom-up.

Scale Functionally and Lead

Introducing new roles and team members into the organization is an obvious growth step. To scale your operation, the “mean, lean, wear lots of hats” machine must evolve to more functional roles with dedicated specialists (like customer support, product management, customer success, business development, line executives, etc.). No problem. What’s not so obvious is how the current team deals with these changes, particularly if they don’t have a lot of prior experience. If team members are used to taking direction from the top (the CEO or the founders, for example), they may have questions or concerns about their new manager, their role and the revised roles of everyone around them. When it comes to building a growth-oriented team, don’t assume everyone understands what you’re doing and why. Just because you’ve laid out a logical and viable scale-up plan, architected the new organization, hired all the right people and committed to new processes and systems doesn’t mean they know how to adapt and work together effectively. It may sound mundane but take the time to clearly define the new roles, responsibilities, process owners and who is ultimately accountable for the results. Then, assume the role of educator, conscience and sentinel every step of the way.

Develop a Value Creation Playbook

Scaling a a SaaS or TES business is hard work. Period. You’ll want to find a value creation playbook to be your situational guide. It should include a set of success factors, tools, methodologies and best practices necessary to scale a tech-enabled services business and complement what you already do so well.

And although most of it’s not rocket science – this phase of company building requires there be a clear link between the strategy, the plan, the value creation milestones and how every team member fits in. There are a few more subtle scale-up hurdles that can have a material impact (up or down) on the results. They include:

  • Communicating broadly, consistently and frequently to every team and team member at every level. This is far easier to say than do and is one of the “secret elixirs” to mitigating the scale-up risks.
  • Assessing the need for critical, long lead-time hires. Start recruiting early – it always takes longer than you think. Build a bench of talent for parts of the organization where you’ll need to scale the team. This helps you to make high quality hires – just in time.
  • Institutionalizing “tribal knowledge” – by documenting and sharing the essential stuff in the heads of the founding team that new hires need to do their job at the highest level and to avoid reinventing the proverbial wheel.
  • Determining early which systems and processes won’t scale – refactor them pre-emptively.
  • Courageously tweaking the organizational dynamics whenever necessary to find the business’ optimal cadence. As you scale-up, you’ll see a shift from mostly high performance individual contributions to team-based deliverables. It is one thing to execute as a high performance silo. It is quite another to consistently add horsepower, create new teams and redefine processes in order to meet your accelerated growth, EBITDA and productivity goals.
  • Knowing what to do today and what to put off until tomorrow, next month or next year. Most entrepreneurs and investors talk about and get the importance of “focus”. What separates the successful businesses at this growth phase is knowing what to focus on.

Inattention to any of these details can lead to indecisiveness, team paralysis, or lackluster performance and even put a drag on morale and esprit de corps – which, of course, is exactly the opposite of what you’re trying to achieve with an accelerated growth and investment plan.

Don’t React. Plan.

As we discussed last time, the secret isn’t just figuring out what the hurdles are but also how to take up the gauntlet to address these critical success factors – like operational scaling – in the most expedient, capital efficient and sustainable way. In doing so you’ll also help ensure that every invested and/or re-invested dollar in the business will generate the highest returns.

Next time, we’ll be discussing the 3rd and arguably the most ubiquitous growth challenge, demand generation where positioning strategy, buyer insights, behavior-based nurturing and meaningful conversion metrics form the foundation of an optimal content marketing and demand gen strategy. In the meantime, you can learn more about The Big 3 , the difference between building Unicorns and Workhorses in our Don’t Die Trying post, and If You’re ready for Growth Equity.

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Stage Expertise is as Important at Sector Expertise

The Workhorse Capital team believes that successful investors differentiate themselves by contributing to the value creation process at each portfolio company. In order to do so, we keep close to our roots – focusing our investments in technology-enabled service businesses which leverage recurring revenue business models. We believe in sector expertise. Likewise, we believe in stage expertise. We’ve chosen to become growth stage experts. We believe that growth equity offers investors an asymmetric risk-return profile; the opportunity to derive venturesome return potential with much lower loss rates than venture. In our view Growth Equity investments exhibit the following return characteristics:

Proven Product-Market Fit and Economic Model

Candidates for Growth Equity investment typically operate in a quantifiably large market with a proven value proposition and economic model. These businesses know how to sell their product/service, how to identify their target customer and understand the economics of customer acquisition. With this foundation in place, growth-stage businesses can deploy investment capital at the use(s) of proceeds that generate the highest return on investment.

This cannot always be said of venture investments, which often wander in the woods and often must “pivot” before discovering a market, or leveraged buyouts, which must focus on repayment of debt to create equity value.

Attractive Risk-Adjusted Upside Potential

Growth and value are concepts that are inextricably linked in the financial markets. It is a well-known axiom that – all else equal – the faster a company is growing, the higher the multiple it commands, and vice versa. It is obvious but worth emphasizing that growth-stage businesses create incremental value by growing revenue and profitability. In a sufficiently large market segment, growth stage investments have the opportunity to drive meaningful growth and profitability.

The same can be said of venture investments, although the failure rate of venture-financed companies remains very high. While it is easy to recall high-profile acquisitions of venture-backed companies with unproven economic models, these exits are very much the exception to the rule. Growth Equity returns are more predictable because base exit value is tied explicitly to growth and financial performance, with the added upside potential of strategic value. Buyouts on the other hand often create value through cost-cutting and by reducing debt. As a result, traditional buyout returns are often bounded, as there is only so much cost cutting and debt repayment available to a given company.

Limited Risk of Capital Loss

We make Growth Equity investments in companies that have created a baseline of value and are typically un-levered, so that the preferred equity is not subordinate to debt. If the investment is priced right, the investment need only maintain its value in order to return capital to preferred shareholders.

This is distinct from both the venture capital asset class and the buyout asset class. In buyouts, the equity is typically subordinate to debt, creating a default risk that could wipe out equity. One need look no further than the 2007/’08 business cycle to see how leverage cuts both ways. In venture, the company must typically grow into its valuation by hitting development and/or performance milestones, which if not achieved can render the equity worthless. Venture is about harnessing home-run potential, but with that upside comes higher loss rates.

Being a stage expert (as well as a sector expert) enables us to better understand the challenges faced by growth stage businesses and to design our business around helping the entrepreneurs we partner with to stay ahead of those challenges. With a combination of sector and stage expertise, we are purpose built to execute on the promise of growth equity.

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The Big 3 Growth Imperatives: Team Building Best Practices (Part I)


Bending the growth curve presents a new set of challenges for your expanding business. We recently touched on The Big 3 imperatives common to almost every growth-stage tech-enabled services (TES) business:

  • Team: Building and developing your team from top to bottom
  • Operational Scaling: Growing the operation and refactoring systems and processes to accomodate scale
  • Demand Generation: Opening up the aperture on the top of the the sales and marketing funnel – efficiently

Today, we’ll dive into the best practices, tools and methods associated with imperative #1: Team Building.  Getting to the right answers starts with asking the right questions:

  • Do we collectively possess the experience and expertise to be successful in this next phase?

  • If not, how do we architect, hire and nurture a high performance team to meet our goals?

  • Are all of our team members, especially our best and brightest, in the most effective roles?

  • How do we preserve the company’s culture as the business grows both inside and out?

As an owner-operator, you’ve successfully bootstrapped a business built upon a healthy respect for capital. The challenge ahead is how to expand your “bend the curve” team while preserving the company’s special attributes that got you here.

Team members that don’t scale, even one bad hire or unforeseen issues with team dynamics will divert your energies and the company’s focus from the task at hand. Furthermore, having to deal with the necessary course corrections will almost certainly waste precious growth capital.

Team Building Best Practices

There are best practices that cover every aspect of team-building from hiring to esprit de corps to leadership development. While there are many paths, choosing the approach and supporting tools that fit your particular situation is the special sauce. We’ve found that the most successful companies:

  • Common Language: Develop a common vocabulary and promoting consistent team communications. It’s been said that 95% of the issues you’ll face are rooted in communications.
  • Strategic Alignment: Are strategically aligned from top to bottom around “success”. You might be surprised how often teams aren’t unified on the long-term goals. Getting this right will streamline your hiring process, lead to better execution quality and feed a maniacal focus on achieving that “success”.
  • Focus on Performance Not Size: Build small, high performance teams. Company building begins and ends with elite teams. They are the foundation for sustainable, long-term success. Understanding the key attributes of high performing teams, starting with trust, and applying an effective operating model will produce the desired results. It will also promote and nurture leadership competencies throughout the organization.
  • Hiring: Hire well. A recruiting imperative for every growth-stage TES business is the ability to get candidates to reveal their strengths and weaker points from every job and to highlight their successes, failures, key decisions, and key relationships throughout their career. Mastering this approach can avoid misfires with strategic hires and identify potential high performers for front-line through manager roles that fit your team’s chemistry and company’s culture.
  • Psychology of Leadership: Great leaders really “get” their team members. Progressive leaders also focus on understanding their team’s conative faculties – the actions that result from their natural instincts which enable them to be the most productive. A simple assessment and collaborative tool can be used to improve organizational dynamics and hiring.
  • Prioritize: Prioritize continuous improvement. An important steps is transitioning from “the team you have” to “the team you want” through a continuous cycle of planned activities including:
    • 360-degree feedback
    • Creative on-the-job development of functional and communications skills
    • Action-learning team projects
    • Senior to junior level mentoring

The secret to all of this isn’t just figuring out what hurdles lie ahead but rather what “growth elixir” works best for your business. Then, follow through in the most expedient, capital efficient and sustainable way possible. In doing so you’ll also help ensure that every invested dollar in growth will generate the highest returns.

Next time, we’ll be discussing the 2nd imperative, Operational Scaling and how to proactively overcome the systems and process scaling challenges associated with doubling, tripling or even quadrupling your revenue. You can learn more about our views regarding The Big 3 Scaling Imperatives and the difference between building Unicorns and Workhorses at Don’t Die Trying.

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The Big 3: Company-Scaling Imperatives

If you’re the owner-operator of a tech-enabled services (TES) business that’s growing at over 20% and approaching profitability…..savor the ride because you’re flying in rarefied air. It’s not every day an entrepreneur “bootstraps” their way from the risk and uncertainty of the “fuzzy front-end” to demonstrating a strong value prop and product-market fit on little to no institutional capital.

So what does the road ahead look like? You may feel that your best and maybe most challenging work within the business is still to come. Bending the growth curve presents a new set of problems for you and your team to tackle. How do we become the category leader in our market niche? How do we double, triple or quadruple our revenue over the next several years? How do we grow our profitability at the same time? How do we preserve the company’s culture as the business expands both inside and out?

The good news is that all of these questions represent “high-class problems” and you are certainly not alone. Almost every TES business at this stage in every segment of the market faces the same growth challenges; you can think of them as “The Big 3”.

So what are “The Big 3”?

  • Team: Building and developing your team from top to bottom
  • Operational Scaling: Growing the operation as you approach unchartered territory
  • Demand Generation: Finding and expanding the number high quality customer prospects at the top of the sales funnel – efficiently

There’s no rocket science here. You’ve probably been dealing with the first two since you launched the business and chances are you’re losing sleep thinking about next year’s demand gen. The secret sauce isn’t in figuring out what the hurdles are but rather how to take up the gauntlet for these critical success factors in the most expedient, capital efficient and sustainable way. In doing so you’ll also help ensure that every invested and/or re-invested dollar in the business will generate the highest returns.

Companies that successfully address these company-building imperatives head-on will be well on their way to achieving the long term value creation milestones for their business.

In future posts, we’ll explore the best practices, tools and methods for each of “The Big 3”.

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Don’t Die Trying… Be a Workhorse.

For those of you who have followed my personal blog, you know I don’t think the mythical Unicorn is a very good role-model for entrepreneurs. It isn’t that I’m anti-Unicorn. Quite the contrary, I’m a huge fan of building companies that are worth billions of dollars. My objection, rather, is to the tech-media inspired horn-envy that came along with the Unicorn phenomenon and the subsequent risk-taking craze that ensued. Left in the wake are Unicorn wannabes that died trying and some one-time Unicorns that ultimately fell from grace.

An alternative role-model to the Unicorn, as I’ve written before, is the sturdy Workhorse.

Workhorses are smart, tough, sturdy, dependable, and patient. They are unfazed, even in the presence of a storm. Workhorses are durable and adaptable. Oh, and workhorses aren’t mythical.

Think of the workhorse as a unicorn that has evolved. The unicorn is of mythical value. The horn was useless and the magic isn’t real. Workhorses are are evolved in that they are producers of fundamental value. They shed the horn, solve real problems and create fundamental value.

We believe so strongly in the Workhorse as a role model for entrepreneurs that when my new partner, Dave McLean, and I named our firm, we chose Workhorse Capital. For us, the Workhorse represents both the characteristics of the companies and entrepreneurs we wish to back and also reflects how we see our role in the process of company building.

Fundamentals vs. Vanity
In our view, companies that create tangible, intrinsic value for their customers don’t need to achieve Unicorn status to be wildly successful investments. We’d rather predictably invest modest amounts of capital in growing, fiscally disciplined and capital efficient businesses that result in $100 to $200 million outcomes than rely on low probability, “long tail” momentum exits which require tens of millions of dollars as table stakes. After all, there are very few businesses that have a legitimate shot at becoming a billion dollar company. The loss-rates that venture firms incur trying to build Unicorns are unacceptably high for our risk tolerances.

For entrepreneurs, there can be significant collateral damage to this level of risk- taking. We can’t begin to guess how many venture-backed companies failed trying to birth a Unicorn when they could have built wonderful, thriving Workhorses using a different financing strategy – one better aligned with the true potential of the business. My guess is that there are many intellectually honest entrepreneurs who would admit falling victim to this approach.

Company Building Philosophy
Dave and I view our role in company building as more than just capital. We are committed to putting our shoulder into the plow of the value creation process, working hand-in-hand with the entrepreneurs we’ve backed. Our winning philosophy is based on earning and building trust with entrepreneurs and management teams. We’re not big fans of the judgmental approach. Stress-filled beat-downs don’t produce the best results or lasting esprit de corps. No, our role is to be their support system and to help them achieve both the purpose and objectives that they’re so passionate about. Our Workhorse mentality is rooted in our collective experience and in our company-building passions. It’s the way Dave and I are wired – supporting entrepreneurs is the work we are designed to do and love doing it.

I’m gratified to be partnering with Dave as a fellow Workhorse. He is 12 year veteran of Sevin Rosen Funds, an experienced investor, mentor and a five-time CEO who brings a grounded perspective to the process of building valuable businesses. Dave and I arrived at the same destination along very different paths. What connects us is our desire and commitment to support entrepreneurs and our belief that investing growth equity in emerging tech-enabled services businesses presents the best risk-reward trade-off available in the private markets. Together, we aspire to build Workhorse Capital into a world-class growth equity firm.

I leave you with our intentionally irreverent mantra. T-shirts and coasters coming soon to a store near you!

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Workhorse Capital Invests in Datavail

DatavailWorkhorse Capital is pleased to announce the completion of its first investment; a $7.2 million investment in Datavail Corporation. Datavail is the largest independent provider of remote database administration managed services in North America. Tahosa’s investment in Datavail is part of a $47.0 million growth recapitalization led by new investor, Catalyst Investors. New investor, Lumerity Capital and existing investors, Meritage Funds and Boulder Ventures also participated in the financing.

My relationship with Datavail started through my work at Meritage Funds. Meritage led Datavail’s Series C financing in 2011. I became more deeply involved with the company in 2013 upon my return to Meritage after having run a portfolio company for 16 months. At the time, Datavail had executed several acquisitions of smaller database managed services providers. The working thesis at the time had been to scale the business primarily through acquisition based growth. The acquisitions that the company made were certainly worthwhile, particularly in helping the business to achieve minimum efficient scale. However, it was clear that acquisition based growth strategy would ultimately become limiting and expensive and that the company would have to execute on other growth vectors if it was to achieve its highest potential.

Early in my involvement, it became apparent that Datavail had developed an under-appreciated core competency, the ability to predictably and profitably acquire enterprise class database administration customers at low cost. Datavail has always excelled in customer satisfaction and delivery. Adding a repeatable and scaleable organic customer acquisition capability to the core operating and delivery platform had the potential to create significant value. Through Mark Perlsetein (CEO) and the team’s superb execution, the Company proved its organic growth capabilities, and was able to garner additional internal financing to invest more aggressively in organic growth initiatives. The results is that the company has grown meaningfully over the past two years and with an attractive LTV/CAC ratio.

My relationship with Mark Perlstein, Datavail’s very capable Chief Executive Officer was cemented during our work on the organic growth strategy. We worked together to put the metrics, measurements and decision-tools in place to support the company’s organic growth aspirations. Getting the building blocks right on the front end has helped the business to direct its organic growth investments toward the most productive channels. It is great to see that work proving its worth.

As exited as I am about Datavail’s recent performance, I’m even more excited about the company’s prospect going forward. There are a number of reasons to be optimistic.

  • World-class Team: Mark Perlstein (CEO), Datavail’s CEO has put together an A-quality team across the board. Mark, Keenan Phelan (COO), and Andrew Evans (CEO) do a fantastic job making the business strategically relevant while also making sure the trains run on time. Robin Caputo (CMO) and David Boyle (SVP Sales) constantly improve the customer acquisition process and drive the revenue generation machine with a high degree of precision.
  • High Quality Scaleable Service Delivery Platform: Datavail has built a world-class service delivery operation and infrastructure. With 24×7, global delivery, the Company can meet its customers needs in any location and in any time zone. The company has really differentiated itself in the marketplace in its ability to serve a broad array of needs of mid-market and large enterprise customers.
  • Repeatable and Scaleable Organic Customer Acquisition: Datavail has not only built a world class service delivery platform but also a machine-like customer acquisition engine. With an LTV to CAC in excess of 5.0x, Datavail is poised to continue to grow as it enhances its investments in organic growth.
  • Great Partners: I’ve known the team at Catalyst Investors for many years. Tyler Newton, who led the financing on behalf of Catalyst is a capable and thoughtful investor. Matt Kim of Lumerity is also a long-time friend and colleague in the business. I’m pleased to have Tyler, the entire Catalyst team and Matt as a partners in this investment. I’m also looking forward to continuing to work with Jack Tankersley of Meritage Funds and Peter Roshko of Boulder Ventures. The investor group shares a common purpose to support this management team in taking Datavail to the next level.

I’m really pleased that Datavail is the first investment for Tahosa Capital. I’d go so far as to say I’m proud of it. The investment nicely fits Tahosa’s core focus of investing in growth-stage technology-enabled services businesses. Less than six months after Tahosa Capital’s launch, I’m grateful for the opportunity to be an investor in such a high-caliber company and with the quality management and investment partners around the table.

Congratulations to the entire Datavail team!

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