We at TCV believe that our greatest asset is the collective group of world-class professionals with whom we have had the pleasure and good fortune to work with over our 27 year history as a firm.
This is a dynamic and constantly growing group of individuals, which includes the founders and management teams of our current and former portfolio companies, current and former employees and operating executives, and a broad set of top experts across multiple areas.
We are pleased to share that Patrick Morrison is joining TCV as Head of Portfolio Talent. In his role, Patrick will have two primary objectives: nurture and expand TCV’s global talent network; and partner with our portfolio companies to reach their strategic hiring, networking, and organizational goals. He will provide the “heat, light, and attention” necessary to build and sustain a deep and highly accessible community of world-class talent and resources.
Patrick previously worked at Khosla Ventures, where as Vice President of Talent he worked with a portfolio of 300 companies across enterprise, consumer, digital health, sustainability, and frontier. Prior to Khosla, Patrick led executive search for Adobe’s $7 billion Creative Cloud business. He began his career in Talent at preeminent search firms Korn Ferry and Bespoke Partners, where he led CxO searches for public, private equity, and venture capital backed technology companies.
“Fostering and nurturing connections – and access to top-tier talent, specifically – has never been more important,” says Ric Fenton, General Partner and Chief of TCV’s Investment Operations. “With a community of portfolio companies and executive connections across the globe, we’re thrilled to have someone as talented as Patrick aboard to be a thoughtful and strategic ‘connector’ for our network.”
Software development is a $2 trillion industry – yet today’s “software supply chains” have become increasingly challenging to govern and secure as agile development practices have evolved in the modern cloud era. Legit Security, a recent addition to TCV’s portfolio family, is on a mission to change that by providing end-to-end governance and security throughout the entirety of the software development lifecycle.
Software now plays an important role in nearly every business; it is one of the most critical assets empowering organizations to create efficiencies and competitive differentiation. Software development practices are constantly evolving to improve business agility and enable new digital business models, but as a result, software supply chains are also changing, have become highly complex, and are increasingly difficult to govern and secure. Too often, the code, pipelines, development infrastructure, and third party resources within the software development lifecycle (SDLC) are left insecure, exposing the organization to potential breaches and software supply-chain attacks.
The damage inflicted by software supply-chain attacks has gained publicity following events such as log4j and Solarwinds. However, these attacks were not isolated, and it’s estimated that software supply chain attacks are increasing at a rate of two to six times per year. As a result, the importance of bringing security and governance to the entirety of the software supply chain is becoming top of mind for businesses globally.
Introducing Legit Security: Security for software supply chain environments
Legit Security, an Israeli-based security company founded in August 2020, aims to address this acute pain point by providing a security platform that protects the pipelines, infrastructure, code, and people within software supply chains so that businesses can stay safe while releasing software quickly. The platform provides security and developer teams with a “single pane of glass” to secure the SDLC by scanning development pipelines for gaps and leaks, the SDLC infrastructure and systems within those pipelines, and the people and their security hygiene as they operate within it.
Legit Security’s platform aims to remove blind spots and automate governance and compliance for the software supply chain. The platform uses an automated discovery and analysis engine to identify vulnerabilities, measure and track the security posture of teams and development pipelines, and ensure compliance to regulatory and governance frameworks in real-time. By using Legit Security, security and development teams can manage risk more effectively and increase efficiency by focusing on what’s most important.
“Legit provides a single pane of glass to mitigate software development risk. We’re now able to inventory all our SDLC systems and security tools, view developer activity, and detect and remediate vulnerabilities across them fast. Legit’s security scoring also allows me to measure the security posture of different teams and show progress improving it.” – Bob Durfee, Head of DevSecOps at Takeda Pharmaceutical Company
Deep cyber security expertise
TCV is investing in Legit Security through its recently-announced Velocity Fund, which aims to invest in expansion-stage companies in its sectors of interest.
The founders and executive team of Legit Security have deep experience in cybersecurity. The founders all came from Checkmarx, a leading application security testing business, and had initially met in the Israeli military’s intelligence unit. As cybersecurity researchers and team leads for the renowned Israeli Defense Force’s Unit 8200, they gained real-world security experience with the offensive and defensive tactics specific to software delivery pipelines.
CEO & Co-Founder Roni Fuchs was formerly Senior Director and Head of Software Composition Analysis at Checkmarx, after his previous startup Lumobit was acquired by Checkmarx less than a year after its launch in 2018. Previously, Roni was a senior software engineer at Microsoft. Liav Caspi, CTO & Co-Founder of Legit Security, and Lior Barak, the company’s VP of R&D and Co-Founder, share similar backgrounds: all three overlapped at the Israeli military, Lumbobit, and Checkmarx. Chris Hoff, VP for Worldwide Sales was most recently Regional VP of Sales at Duo Security, having previously held sales roles at EMC, Kaspersky, Cognos, Watchfire/IBM, and CA Technologies. Derick Townsend, VP of Marketing, was most recently VP of Product Marketing at Ping Identity, with prior marketing leadership roles at UnboundID, DXC, ServiceMesh, CA Technologies, iTKO, and IBM.
Shifting left: The vast “DevSecOps” opportunity
So why are we so excited? Well, on top of the deeply relevant and honed skills that run through the company from its highest level, we believe that Legit Security is on to something big and important in the application security space. Over the past five years, as application development practices have evolved, the notion of “DevSecOps” (development, security, and operations) or “shifting left” has become increasingly popular.
“Shifting left” aims to make security more agile, repeatable, and automated, ultimately empowering DevOps teams to bring products to market faster. Existing application security solutions generally operate in isolation, resulting in silos throughout the pipeline. Further, blindspots can exist along development pipelines and SDLC systems and infrastructure, including GitHub / GitLab repos, which are not covered by traditional application security tools. In addition, the disparate nature of traditional AppSec tooling requires security teams to navigate across the numerous point solutions to try and stitch together insights into potential vulnerabilities, often leading to “alert fatigue.”
Legit Security bridges this gap by spanning the SDLC with automated discovery and analysis capabilities that include auto-detection of code repositories, build servers, artifact repositories, and deployed security products such as Snyk and Veracode along with their security coverage. When your SDLC changes, it’s automatically detected by Legit. The platform provides hundreds of best practice software supply chain security policies that can be enforced directly in the product, as well as a unique Legit Security Score to manage risk, track security posture, and monitor compliance to regulatory and governance frameworks in real-time.
This holistic, end-to-end insight enhances governance at various checkpoints, empowering enterprises to derive greater value from existing security tools. It’s no coincidence that customers frequently describe the Legit Security Platform as their “application security command center.”
Where are we now?
Legit Security has now emerged from its pre-launch phase, during which the company has been busy acquiring customers (from Fortune 500 companies to fast moving software-driven businesses), building a platform for demanding enterprise environments, and securing funding from top-tier investors,including TCV. The business has already grown significantly with new offices in the U.S. and Israel, and an expanded team, as well as connections with important partners and advisors.
I’ve known co-founders Liav and Lior for many years, since our time working for the Israeli Defense Forces. We gained invaluable experience there, but perhaps most important was learning that ‘anything is possible’ in cybersecurity with the right talent, focus, and resources.”
Roni Fuchs, CEO & Co-Founder, Legit Security
After military service, the founding team members worked in leading cyber security companies across Israel and recognized a growing gap between traditional AppSec tools and a new generation of rapidly evolving, modern software development environments. The gap was growing and traditional security tools and vendors were unable to catch up.
“Because of the adoption of agile development, cloud, and modern development pipelines, the approach needed to secure software releases has fundamentally changed. It’s no longer just about ‘the code’. Software is now assembled in multiple steps across a supply chain leveraging many trusted contributors, pulling artifacts from countless repositories, built, and assembled on underlying infrastructure that must be securely configured, and all the while providing speed, agility, and efficiency. These modern supply chain environments created a sprawling new attack surface – one that is increasingly exploited by over 2x-6x a year, depending upon the analyst, government agency, or vendor report you read.” – Roni Fuchs, CEO & Co-Founder, Legit Security
TCV team members Matt Brennan (TCV General Partner), Tim McAdam (TCV General Partner), Mark Smith (TCV Venture Partner), and Alex Gorgoni (Investor) are excited to partner with Legit Security, helping to guide the company through its next critical phase of growth. Our team has witnessed first-hand the enthusiastic response of customers as they learn about the unique positioning and scope of the Legit Security platform, and its ease of deployment.
This is a sector we expect to be active in over the coming months, too, and we look forward to being a part of it.
At TCV, we firmly believe that it’s our people who make the difference, and we are delighted to share nine major firm-wide promotions.
We are excited to announce the promotion of Muz Ashraf and Amol Helekar to General Partners. Both Muz and Amol have played integral roles in accelerating our investments across multiple sectors, including FinTech and technology-enabled services, and have been instrumental in driving growth for many of our portfolio companies.
In addition, we promoted seven professionals across both our investment and operations teams. David Eichler, Mike Kalfayan, Matt Robinson, and David Zhang have been promoted to Investing Partners, and John Delfino, Aaron Ford and Julia Roux have been promoted to Operating Partners. These elevations recognize the vital contributions these individuals have made to TCV’s progress and highlight the high quality and depth of our leadership bench.
General Partner promotions:
Muz is based in London and joined TCV in 2015. He is passionate about investment opportunities in the internet, software, FinTech and technology-enabled services sectors. He serves on the board of directors of Mollie and RELEX Solutions, and his other current investments include Celonis, Klarna, Mambu, Miro, Redis Labs, Spryker and The Pracuj Group. His former investments include Retail Merchant Services (acquired by SaltPay).
Prior to TCV, Muz was an investor with Vector Capital in San Francisco, where he focused on sourcing, evaluating and executing investments across the software, internet and security sectors.
Muz started his career as an investment banker at Merrill Lynch, working with technology companies on strategic M&A transactions and financing activities. He also worked at T. Rowe Price, where he researched technology investment opportunities in Europe. He earned his M.B.A. from Harvard Business School and holds a B.A. in Economics and an M.S. in Management Science & Engineering from Stanford University.
Amol, based in New York, joined TCV in 2009 and focuses on investments in the FinTech, software and tech-enabled services sectors. He serves on the board of directors of Clio and Trulioo, and his other current investments include Built, OneSource Virtual, Payoneer (NASDAQ: PAYO) and Razorpay. He was also actively involved with TCV’s investment in AxiomSL.
Prior to TCV, Amol spent several years with McKinsey & Company, advising clients on strategy engagements in the energy, financial services and technology sectors. Amol received his M.B.A. from Harvard Business School and holds a B.A. in Economics from Stanford University.
John, based in Menlo Park, California, joined TCV in 2014, and serves as General Counsel overseeing deal structuring, investments and exits, as well as a range of additional legal and operational matters. Prior to joining TCV, John was at Simpson Thacher & Bartlett LLP, advising private equity clients on corporate and securities law services, including mergers and acquisitions, buyouts and fundraising. In addition, John has experience working with private equity and other alternative asset management firms in their formation, fundraising activities and ongoing operations of their investment funds.
John earned a B.A. in Economics and Accounting from the College of the Holy Cross and a J.D./M.B.A. from Santa Clara University.
David, based in Menlo Park, joined TCV in 2013, and focuses on investments in education, HR, FinTech and other software sectors. He serves on the Board of Directors of Perceptyx and his current investments include Built, HireVue, Humu, Nerdy (NYSE: NRDY), Newsela, OneSource Virtual, and Watermark. David’s previous investments include Avalara (NYSE: AVLR), LinkedIn (public investment; acquired by Microsoft) and Tastyworks (acquired by IG Group).
David spent a year away from TCV (2016-2017) working at HireVue in Utah, where he helped develop the company’s sales & marketing strategy. Prior to joining TCV, David was at The Blackstone Group, focusing on technology mergers and acquisitions, and before that he was at Lighthouse Capital Partners. He has an A.B. in Music and Economics from Brown University.
Based out of our Menlo Park office, Aaron founded our Data Intelligence Group, which helps TCV make data-driven decisions across the investment lifecycle. He originally joined TCV in 2013 as an investor in the consumer internet sector, where he contributed to TCV’s investments in Airbnb, Dollar Shave Club, GoFundMe, and Rover. Prior to joining TCV, Aaron worked in TMT investment banking at J.P. Morgan. He received his B.A. in Mathematics and Economics from Williams College.
Mike, based in London, joined TCV in 2014, and focuses on investments in the internet, software and FinTech sectors. His current investments include Believe (Euronext Paris: BLV), FlixMobility, Mambu, Miro, Perfecto, Qonto, Redis, Revolut, Sportradar (NASDAQ: SRAD), SuperVista AG, and Trade Republic.
Mike spent a year away from TCV (2016-2017) working at SiteMinder, where he was Head of Business Operations. Prior to that, Mike was an investor with Summit Partners, where he focused on technology and healthcare sectors. Mike graduated cum laude from Harvard University, where he received an A.B. in Social Studies. He also holds an L.L.B. from the University of Law.
Matt, based in New York, joined TCV in 2011, focusing on healthcare IT and services investment efforts. For the past six years, Matt has helped lead the firm’s IT infrastructure software investment efforts. Matt is actively involved in TCV’s investments in Aviatrix, Devo Technology, HashiCorp (NASDAQ: HCP), OneTrust, Vectra, and Venafi. His prior investments include Cradlepoint (acquired by Ericsson) and Silver Peak (acquired by HPE). Prior to joining TCV, Matt worked at UBS as an analyst in the Global Healthcare Group, advising healthcare clients on a range of transactions spanning M&A, equity and debt offerings. Matt also spent time evaluating healthcare investment opportunities at General Atlantic in New York. Matt received his M.B.A. from Harvard Business School and a B.S. in Biochemistry from Indiana University.
Based in New York, Julia serves as Head of Investor Relations at TCV. She joined TCV in 2019 to lead the firm’s fundraising and investor relations activities. She brings global fundraising experience in private equity across the technology and emerging markets growth sectors. Prior to TCV, Julia was a Managing Director at Autonomy Capital. She previously worked in private equity at Silver Lake in New York, focusing on global fundraising efforts in Europe, Middle East, and Asia, and was the Head of IR for Vinci Partners based in New York and São Paulo. While at Silver Lake and Vinci Partners, she also supported the deal teams focused on the Brazilian tech sector. She began her career at J.P. Morgan in New York. Julia holds a Master’s degree in Finance from Copenhagen Business School and a Bachelor of Economics from the European Business School, Oestrich-Winkel.
David, based in Menlo Park, California, joined TCV in 2018, focusing on investments in digital media, FinTech and e-commerce. His current investments include Airbnb (NASDAQ: ABNB), Brex, Klarna, Nubank (NYSE: NU), and WealthSimple. David was recognized by Business Insider as one of the Top 25 rising stars in Venture Capital (2019).
Prior to joining TCV, David invested in global internet companies at Dorsal Capital Management and worked in TMT investment banking at Goldman Sachs. David began his career by co-founding an online real estate start-up in Asia. David attended the undergraduate program at the University of Notre Dame and received a B.S. in Economics from the London School of Economics and Political Science.
“We are delighted to announce these promotions, which recognize the great work done to date by our colleagues,” says Jay Hoag, TCV Co-Founder and General Partner. “Since inception in 1995, TCV has been an active partner to world-leading technology companies, and these professionals embody the core values of our firm and culture we bring to the teams we work with: we expect excellence, and we win, as a team.”
We look forward to their continued contributions for many years to come. Please join us in congratulating our colleagues on their promotions.
The General Partners of TCV
Crisis always seems to strike at the most inopportune moments. And for tech companies operating on a multimarket or global scale, there often isn’t time to effectively create bespoke messaging after a crisis has struck. But responding with speed and scale is just one piece of effective crisis communications. What should savvy companies be doing to strategically plan ahead for effective crisis communications? What are the best tactics to align internal and external stakeholders, and formulate responses that can satisfy clients, partners, and the press across multiple time zones? And what steps can be taken when a crisis strikes before a strategic plan has been put into place?
TCV principals Katja Gagen and Kunal Mehta recently brought together a team of PR and crisis experts from the TCV portfolio and beyond to discuss the best practices they use when managing a crisis. Whether the incident is a cybersecurity breach or an internal messaging catastrophe, the roundtable of comms pros from Payoneer, Spotify, TCV, and Trulioo shared their specific strategies for navigating crises before, during, and after catastrophe strikes.
Managing a Cybersecurity Incident Before Crisis Hits
As one of the leading providers of instant digital identity verification across the globe, the PR team at Trulioo has found it best to have a plan in place before a cyber crisis strikes. As the company’s PR specialist Alison Gallagher explains, “When it comes to a cybersecurity incident, it’s not really a matter of if, but when.”
To ready itself for an information security crisis that might come down the pike, the Trulioo communications team works in lockstep with other departments to create a robust incident response team that regularly assesses and reassess its plans of action before they’re needed. Below are some of the key takeaways that Lucy Screnci, a senior PR and communications manager at Trulioo, and Alison have put together for managing cybersecurity incidents.
Create an incident response team that’s larger than just your PR team. By including experts from divisions such as information security (to assess threats and regulations on a market by market basis), IT (to advise on implementing solutions), and legal (to advise on the legal and compliance implications of potential solutions), your organization won’t lose precious time in a crisis scrambling to assemble the right stakeholders.
Reassess and update your plans regularly. The strategic plan that your incident response team creates shouldn’t be static. Because regulations and compliance directives can change, and may vary market by market, having annual check-ins with stakeholders from the incident response team is crucial to make sure your plan is capable of meeting the moment rather than needing revamping while under attack.
The key components of a strategic cybersecurity response plan are notification, information gathering, triage, assembly, and post-incident debriefs. When a crisis first strikes, the lead incident response team member should immediately alert the rest of the team. That allows the full team to go into information gathering mode, in order to assess the scope of the crisis and gain a full understanding into what steps need to be solved for. Once that process is complete, the response team can jointly triage the severity of the crisis – Trulioo uses a level one through three model – to determine the appropriate intervention necessary. Once a crisis has been triaged, the incident response team can go back to the strategic plan that was already in place to align around and assemble the key messages that need to be sent to external stakeholders, such as customers, partners, and the press. Once the bulk of the crisis has passed, a post-incident debrief allows the full team to ensure that all loose ends have been tied up, and to reassess what areas of improvement can be updated for future plans.
Be direct and honest, whether speaking to customers, partners, or the press. “It’s really necessary to be direct and don’t try to avoid speaking on an incident,” says Lucy. “Getting caught not disclosing an incident can come with some grave repercussions in the form of lawsuits or fines, so it’s always best to be open and honest.”
Navigating a Crisis When You’re in the Eye of the Storm. Payoneer is a leading global fintech company that provides cross-border payments and working capital to businesses of all sizes in nearly every country in the world. When the news came to light of a major financial fraud committed by one of Payoneer’s providers in 2020, which in turn caused major disruption to its customers, the Payoneer team began communicating frequently and through multiple channels to explain the situation and the steps being taken to remedy it. After three days during which Payoneer sent out several communications directly to customers as well as through social media, full service was resumed and shortly afterwards, Payoneer replaced this provider and upgraded this aspect of the service. Irina Marciano, director of corporate communications at Payoneer, says the team learned first-hand that it pays off to have crisis communications plans in place before crisis strikes.
Multiple points of contact in a crisis are critical for global organizations. At Payoneer, the executive team is distributed across Asia, EMEA, and America. Between time zones and varied work weeks, it is important to ensure that there is always a specific subject matter expert available in the time frame needed to craft and approve a response. By having multiple points of expertise and contact, incident response teams can ensure that there’s always someone able to weigh in on a time sensitive statement, and a team ready to deliver the message immediately.
Communicate effectively, and quickly. Because Payoneer is both a regulated and publicly traded company, the company always acts with care in how it communicates. The incident in 2020 drew attention to the importance of timely communication for global companies with users who are online in multiple time zones. According to Irina, “You need to say something. Make sure it’s thought out and reviewed by legal, but say something so that your customers know that you are taking this seriously and you’re doing whatever you can to resolve it. If you don’t say anything, you can be sure that rumors will fill the vacuum.”
Create your crisis comms playbook before crisis strikes. Payoneer built out a crisis comms playbook, especially as the company more than quadrupled in size in just a few years. While many of the processes for a crisis were inherently known, by building out a formal protocol and sample messaging, the company was able to ensure that a response was ready to roll out far quicker for future crises.
Working with Global PR Teams and Global Press to Align on Messaging
When Spotify expanded its podcasting operations beyond the U.S. into more than 17 additional markets across the globe, it found it had to quickly bring both its global comms team and each of their PR agencies up to speed on the company’s corporate messaging. Because many of those teams had previously focused on music streaming, there was an influx of information to impart while also adapting it to the nuances of each market. Beejoli Shah, a former manager of global podcast communications at Spotify, walks us through ways the Spotify PR team aligned its large and disparate group of PR pros around company messaging. We also learn from Sarum PRon working with journalists in markets around the globe, to stay focused on the message while also adapting to the cultural norms and nuances of regional press corps.
Create a master messaging library with approved external statements. Because crises can strike in any time zone, Spotify assembled a master messaging library of statements that it had previously used when speaking with the press. The document was updated regularly by PR leads across various business units, so that PR leads in the markets and their respective agency partners always had a set of topline messaging at hand, as well as an accurate register of statements that had been provided to press in the past. Even though PR teams were dealing with reporters in their own markets, having a global library ensured that no matter who was responding to a journalist, the company’s message was uniform across markets and across incidents. Beejoli says that the benefits of the master messaging document were two-fold. Not only did it allow for global teams to make sure they had topline messaging at hand, but it also helped PR team members across time zones and agencies know what had been said previously. “There’s always going to be one reporter who says, ‘Well, you said this last time,’ and having a library helps protect you for those moments.”
Update global teams and agency partners regularly on company goals and topline messaging. Once a year, Spotify would host a summit for its agency partners across the globe. Because podcasting was a newer initiative, the podcast PR team held a separate summit annually where the different business units involved in podcasting were able to elucidate key priorities, topline messaging, and share proactive and reactive comms plans that had worked in the past. Doing so helped create a shared language across markets for Spotify’s podcasting efforts, and established a knowledge base of PR strategies on a global scale. By including links to relevant documents, including previous comms plans, and the master messaging library, Spotify’s agencies across the globe were able to stay aligned on messaging no matter the topic.
Use your local agencies to respond to crises. While having a unified messaging strategy is critical, journalists will often reach out to anyone they can get a hold of, especially across markets. As Carina Birt from Sarum PR explains, in certain markets reporters can even be particular about wanting to speak to a representative in-market. “We’ve seen that European reporters tend to be more particular about speaking from a European context, and it’s not very effective to have them speak to someone from the US.” To plan for these nuances, having regional spokespeople ready to be deployed in a crisis can be key to maintaining unified messaging across markets.
TEL AVIV, Israel, Feb. 10, 2022 (GLOBE NEWSWIRE) — Legit Security, a cyber security company with an enterprise SaaS solution to secure an organization’s software supply chain, today announced its launch out of stealth mode with a Series A $30 million funding announcement with leading venture capital firms Bessemer Venture Partners and TCV. Prior seed funding was provided by CyberStarts, the premier cybersecurity venture capital firm in Israel. Legit Security protects software supply chains from attack by automatically discovering and securing the pipelines, infrastructure, code and people so that businesses can stay safe while releasing software fast. The company will use the funds to expand its engineering team and continue building its go-to-market organization in the United States with offices in Austin and Palo Alto.
According to Gartner®, 45% of organizations worldwide will have experienced attacks on their software supply chains by 2025, a three-fold increase from 2021. Companies can no longer rely solely on traditional security tools and code scanners for protection as more organizations adopt modern applications, agile development, and DevOps. These complex software supply chains at the heart of digital business and critical infrastructure are now prime targets for cyber-attacks, and require new security solutions.
“Enterprises increasingly rely on software to do business, and they’re adopting cloud, DevOps, CI/CD and agile techniques to move fast,” said Roni Fuchs, CEO of Legit Security. “However, this has created a huge new, unprotected attack surface that cybercriminals have targeted, and their attacks are escalating. Right now, enterprises don’t need another code scanner. They need a holistic security solution for the broader software supply chain environment. That’s why we founded Legit Security and brought on world-class cybersecurity experts that share the same vision.”
“Legit provides a single pane of glass to mitigate software development risk,” said Bob Durfee, Head of DevSecOps at Takeda Pharmaceutical Company. “We’re now able to inventory all our SDLC systems and security tools, view developer activity, and detect and remediate vulnerabilities across them fast. Legit’s security scoring also allows me to measure the security posture of different teams and show progress improving it.”
Legit Security helps companies protect their end-to-end software supply chain environment and software releases through automated vulnerability discovery and analysis, security policy enforcement, and continuous assurance. The platform scans software development pipelines for gaps and leaks, development infrastructure and systems within those pipelines, and the people and their security hygiene as they operate within it. The solution doesn’t interfere with existing development tools and workflows, and includes continuous assurance and governance capabilities to monitor adherence to regulatory requirements and compliance frameworks in real-time.
“Legit helps us secure our CI/CD pipelines including tracking the security posture of our different teams and workspaces, addressing SDLC configuration drifts, and helping us apply security resources where it can help us most,” said Erik Bataller, VP of Security, ACV Auctions. “Legit’s platform enables our developers to maintain high velocity with minimal security friction and allows us to identify risk factors and adjust accordingly.”
“Legit is providing us with visibility across the entire supply chain, which helps us minimize risk and raise analyst productivity,” said James Robinson, Deputy Chief Information Security Officer at Netskope. “Legit’s platform nicely complements our existing investments in application security tools and allows us to make better decisions in allocating our security controls and resources.”
“Legit Security’s platform visualizes and analyzes our software pipelines quickly to help ensure security compliance with regulatory frameworks, as well as the unique compliance requirements of some of our large financial services partners,” said Or Cohen, Principal Engineer at Melio. “Legit’s solution saves us time and resources and allows us to manage risk better.”
“Software supply chain attacks will continue to grow until new solutions are available to close diverse security gaps across these environments,” said Amit Karp, Partner at Bessemer Venture Partners. “We love how Legit developed an enterprise solution that is easy to deploy and delivers value in a couple hours.”
Legit Security is led by CEO Roni Fuchs, CTO Liav Caspi, and VP of R&D Lior Barak and has assembled a team of security experts from the renowned Israeli Defense Force’s Unit 8200, Checkmarx, Ping Identity, Duo/Cisco, Microsoft and other leading cybersecurity firms in the U.S. and Israel. For more information, visit legitsecurity.com.
About Legit Security Legit Security protects software supply chains from attack by automatically discovering and securing the pipelines, infrastructure, code and people so that businesses can stay safe while releasing software fast. Legit provides an easy to implement SaaS solution that supports both cloud and on-premises resources and combines automated discovery and analysis capabilities with hundreds of security policies developed by industry experts with real-world SDLC security experience. This integrated solution keeps your software factory secure and provides continuous assurance that your applications are released without vulnerabilities.
While CRM platforms have been a cornerstone of the sales industry for decades, many parts of the B2B sales playbook can still reflect decision-making from decades past. Whether it’s faulty data capture, cumbersome manual data entry, or inefficient forecasting, the digital revolution has yet to fully transform B2B sales organizations away from their traditional, intuition-based operating practices. While following the tried-and-true sales strategies may yield modest success, leveraging AI-powered sales data allows sales organizations the opportunity to better understand their buyers, cut down on time spent attempting to predict the future, and close deals as a team that might have otherwise been left in the pipeline.
In this episode of Growth Hacks,Kunal andKatja are joined by Stephen Messer, the founder of Collective[i], a leader in AI-enabled digital sales and customer relationship management. Stephen walks the group through some of the biggest learnings he and his team have seen on Collective[i]’s data-powered platform, and how they can be used to relieve many of the pain points he continues to see B2B sales organizations struggle with. He breaks down how decision making has shifted in recent years, and what sales teams can do to better service these new spheres of influence and walks the team through some of the biggest myths he sees persisting in modern B2B sales today.
Here’s what you’ll learn:
Why companies are still wasting time on ineffective forecasting, and ways to do it better
How the sphere of influence in purchasing decisions has grown to involve larger networks
Ways that AI can help sales teams to better understand buying decisions and optimize go-to-market strategy
Why Stephen is bullish on sales organizations changing their operational playbooks as the industry further digitizes
To hear more on this, settle in and press play.
Please find the transcript below, which has been edited for brevity and clarity.
Kunal: It is a real pleasure to introduce you to today’s guest. He’s many things, among them an entrepreneur, a founder, attorney, patent holder, professor at Columbia, angel investor, winner of a ton of awards, brother, son. Please welcome Stephen Messer, who’s the founder of Collective[i], which is a leader in AI-enabled digital sales. This company has seen thousands of opportunities run across its platform and today Stephen’s going to share insight that no one company could get on their own. We’re to go through those today. Welcome, Stephen.
Stephen: Thank you so much. It’s great to be here.
Katja: Great, Stephen. Where does this podcast find you today?
Stephen: Today I am in the beautiful Saint Kitts in the Caribbean.
Katja: Awesome. That’s quite the location. As we start the new year, we are really excited about bringing you a different flow for today’s episode. We’re actually partnering with Collective[i] to share the top 10 takeaways based on the enormous amount of data that they gather on their platform. So, Stephen, let’s start with number one, Salesforce activity. How much of it is actually recorded in Salesforce?
Stephen: This is a crazy statistic. When you look today, there’s probably less than 16% of the activities that a sales professional does is mapped into the CRM. Now, that by the way also ignores all the contexts that usually are supposed to be put in, but don’t get in as well. We have a product called Intelligent WriteBack and the goal of that product is actually to find what’s really going on and the reason that CRM is so dependent on getting an accurate and complete view of what the seller is doing every day to help them improve.
Kunal: Stephen, I know when we run those assessments, even in our own companies, that 16% almost has a plus or minus of one, so it is truly a solid stat on what the activity of the reps are. Just imagine if we were a contestant on Wheel of Fortune — how many phrases would we get right if we could only see 16% of the letters?
Stephen: Yeah, you’d have to probably hope for a two-letter word for you to be able to figure it out. If it is a normal phrase, you would probably be looking at this saying there’s no chance. I think that’s exactly what’s happening in sales orgs today that are looking at their data.
Katja: Wow, that’s astounding. Moving on to number two, Steve, which is a popular topic with TCV as well, forecasting. How many hours does the average company spend on forecasting and how accurate has it been? And I want to hear your Marvel story.
Stephen: Yeah, forecasting is an interesting one. When you look at the statistics, whether it be from analysts or even from the data that we’ve seen, most organizations have historically spent about 20% of their time doing forecasting. So forecast Fridays are actually forecast Fridays. They spend the entire day. It’s kind of amazing to think that we give up 20% of selling, which is one day out of every week, to focus on a non-revenue producing task of forecasting. I find it even more crazy because it’s trying to do something that no one’s really been able to do in the history of the world, which is accurately predict some future event. No human on the planet has ever predicted the future. They’re giving up 20% of their time to get to an accuracy rate that’s almost been historically impossible to do.
When we look at that, we think to ourselves, okay, this is a real problem. And in fact, this is where my Marvel story comes in. I’m a comic book geek. I love them all. And in Marvel, there’s always a lot of themes around moving to the future and back and forth. But if you look at even the most recent Marvel movies, The Avengers, what you’ll see is that Doctor Strange saves humanity at the end of the movie by being able to go and live millions of lives to see which is the only way that they’ll be able to defeat the evil villain.
In this case, it’s pretty amazing. He gets it right. But two movies earlier before this evil villain even showed up, Doctor Strange is in a movie and could not predict that this person was coming to avoid it. In other words, even the superhero with the power to see the future has a 50-50 hit rate at best. What that tells us is that storyline worked because no one believes that anyone can predict the future. We think forecasting is going to go through a big revolution in AI and we’re excited to see people get 20% of their day back and more accurate up-to-date daily predictions.
Kunal: I love the Marvel story, Stephen. I think Marvel has like 7,000 characters and like two can predict the future, which just tells you how difficult it is to do. I know from a TCV perspective, we view forecasts. It’s like Kevlar for the board. When you have predictability, it makes spending the budget that’s allocated way easier. I think the forecast plays a critical role at all levels, but if you’re an operator in the company, you can find your budget being restricted if you start not to be predictable.
Stephen: And I think that’s really it. I think what boards want is the confidence in understanding what’s changing in the world. No one expects a sales professional at the start of the pandemic to predict exactly what’s going on. In fact, if you look at most of our competitors in forecasting, we were the only ones who hired up instead of laid off people because our AI was telling us that it was actually going to be a good thing, an accelerator for our business. I think companies like Zoom and some other players had a huge lift from the pandemic, so laying off people would’ve been putting the wrong brakes on and using people’s opinions probably wouldn’t have been the best way. But what they want to understand is how is the daily change affecting their likely future so they can decide, do I open up budget or do I close it down? They also want to make sure that they’re on track, that it’s reliable, that everything is predictable, and I think that’s really what forecasting with an AI product is all about.
Katja: That’s great. Sticking with superheroes, I always like the Lasso of Truth of Wonder Woman as well, which I think is something I would like to have.
Stephen: I think salespeople would like to have that with their customers as well.
Katja: I think so. Moving on to number three, one of my favorite topics, is the number of leads in people’s emails that never make it to marketing.
Stephen: It’s not just emails. It could be in their phone calls; it could be in their video conferences. I think the challenge around CRM has been the cost that it takes to enter information and the mundane nature of it. I did use to work with the UN and I used to joke around and say the only thing the Geneva Conventions didn’t cover was making intelligent people do manual data entry into databases. It’s cruel, it’s hard, and that’s why a lot of salespeople tend not to put that information into the CRM, even though it’s some of the most critical data that they need. When we think about that today, what you end up with is maybe one or two contacts entering into the CRM when in reality, seven to eight buyers are involved in the transaction and that sales team, and the marketing teams have no idea about those other people.
Kunal: Yeah, what we’ve seen, and I think what we’ve heard in the past is roughly 70% of the people we work with on an opportunity just never make it into Salesforce. and I think you’re validating that with the data you’re seeing as well.
Stephen: Yeah, we’ve seen it in your portfolio, right? It’s amazing how many names get uncovered that are involved and it changes the way you think about how the buyer is going through their buying process. That can give real advantage if you know who’s there. Take for example account-based marketing, a very popular new form of doing personalized marketing communications. Well, if you never know who’s there and you don’t know the personas, you’re not going to be able to get that marketing tailwind from your organization simply because you can’t get that information into the CRM and put it in a way where it’s trustworthy.
Katja: That’s right, and that leads to our next topic. How do you then build a solid pipeline? Right? Because what we are seeing is that the majority of pipelines have really bad data; we see that these deals are in the pipeline that are over a year old. They have closed dates that have changed more than three times, but actually no activity in the last seven days and no change in stage in the last 30 days. What happens is usually half the pipeline falls out when we look at the health this way. What’s your fascinating pipeline stats, Stephen?
Stephen: I’m going to first highlight things that every sales leader who’s been around for the last decade knows. We used to talk about 2X pipeline coverage, then it became 3X and 4X and 5X pipeline coverage. It wasn’t that win rates were going down; it was that salespeople started warehousing more and more deals. When you don’t have visibility into the actual activities and contacts that the sales organization is interacting with, it’s easy to lose sight of which deals have just gone away that the seller doesn’t want to close. That can be as simple as loss aversion, or they want to hold onto it in the hope it comes back where they can get it again.
When you look at these pipelines, it’s actually causing real problems. Your CDR team doesn’t even know who to feed new deals to. It creates all these issues. The bigger issue is all the while they’re being warehoused, these opportunities are sitting there idle. There are no marketing messages going there, there’s no keeping up with the buyer who may no longer even be at the org. This is a real problem. What we see today is that sales professionals hold on to close lost deals for about three times longer than a closed deal.
Kunal: That’s a fascinating stat, and Katja and I have seen this over and over. We actually have a white paper on pipe dream versus pipeline that covers some of this as well.
Stephen: Yeah, it’s a great read and I recommend it for anyone who’s listening to this podcast.
Katja: Thank you. It’s definitely eye-opening what we’ve observed working with companies. Along those lines, we also see that almost 100% of companies assign leads based on territories. And they almost make no reference to connections, which feels like 1950s selling. What do you think, Steve?
Stephen: Look, I think sales is going through a huge revolution and a lot of the ways that all of us came up through sales leadership must be re-examined. When you think about territory management, that was designed for the traveling salesperson who carried a roll of dimes in their pocket, would carry their bag from location to location. So, it made sense that territories be fixated around where it was fastest for them to meet the most customers.
Well, that hasn’t existed since the ’50s. The world has changed. I would argue cell phones alone changed it but look what’s happened during the pandemic. People can work from anywhere. It’s easy enough to do business from anywhere thanks to modern day technology, but the biggest thing that we see today is that as people have access to social networks, they are leveraging their relationships to learn what other products other people are using, what works and what doesn’t work. The idea that companies aren’t countering that trend by leveraging relationships that exist in their org, just lying there as data not being used, we think is just sad because there’s a lot of opportunity for people to leverage their friends, their family, their past colleagues, their prior customers. All of this exists and it’s just sitting there to be taken advantage of.
Kunal: Outstanding. Most closed lost opportunities, they’re lost because of no decision, no actual competition involved, and this is code for we just never got buy-in. Maybe you can speak to the number of people you’re seeing involved in a deal as well as how you guys map out circle of influence here to measure, are these opportunities going to close, not close, et cetera?
Stephen: You can probably tell from my statements I really believe that the social world has moved from the consumer into the B2B. And we’ve known that when it comes to jobs around things like LinkedIn, but you’re now seeing it spread into the sales world. We have a product called Connectors that allows you to discover connections, both at your org, but amongst your friends and your family and prior colleagues, et cetera, because we think that’s the most important thing. Why? Well, today if you were to look at the number of buyers involved in a transaction, you’d see across our network that they’ve gone up every single year. Now we’re not alone. All the analysts have been talking about this for a while, but what that means is a lot of the ways that we’ve historically sold, what we’re looking at now is that buyers are making decisions where they’re doing the research on the web first, they’re getting a lot of people involved. It’s a consensus-based purchase and they have their own model and methods of buying.
On the selling side, we’re seeing the same thing. There’s not just one seller anymore. We used to hold the salesperson accountable, but today we have to hold people like legal and finance, your joint venture partners or resellers accountable. What that means is you now have a lot more people involved. Well, the benefit of that is that they all have access to connections as well where they can leverage, and in fact, if the organization can start to learn that circle of influence, they can actually work in conjunction with that buying group to influence everybody involved. It’s a pretty powerful world when all these social connections are working together.
Kunal: I totally agree, Stephen, and one interesting thing that we see that you guys have patterned out is you would take the win rates and you would be able to pattern out kind of these next best set of actions based on what’s kind of moved the needle in the buying journey. Maybe you could talk a little bit about how you guys do that and what the impact has been.
Stephen: The funny part is AI has been popular in the consumer world over the last 20 years, really accelerating in the last 10 years as neural networks have spread through, and a lot of the things that we love so much about those B2C apps is how personalized and how effective they are. The way they do that is by leveraging large networks of data, right? Facebook, TikTok, et cetera. Well, those same exact technologies are being applied now into the B2B world, and in particular B2B sales. We use all these technologies and a large data set to help us find out how does each buying group make their buying decisions? If I can observe that same buying group across multiple sellers, it allows us to really start making good predictions about when they do this, what it means or what they’re going to do next. Then we can look across an even larger network to start to understand what people do that lead to certain win or losses.
The cool part about AI is you can run the time forward, which is, okay, here is the stack pattern of what we’ve had today. What’s the optimal thing you can do next? We can suggest that and just like all apps, take Waze for example, I don’t always have to take the optimal route if I don’t like the route, but the route they’re suggesting is probably going to be the fastest. If I take it, it’ll look at the activity. If something new happens, it’ll reroute it again. So, you’re always looking for, what’s the optimal way to work with this customer? In other words, how do I personalize my sale to the way this buying group likes to buy?
What I love about it is the fact that on a win, you can tell me the needle-moving actions that happen in aggregate even all the way to the industry level. I think it’s super precise, and on the flip side, I can take my losses and map out what is not moving the needle. So, again, it has the impact of making my go-to market strategy, just giving it more precision.
Stephen: You know what else is cool for sales organizations and sellers? It’s so personalized that it’s giving them their unique advantages served up to them on a plate. When they win that transaction because they had a great connection over at the org, that’s something that only they could have taken advantage of. It’s a really powerful way to get every bit of strength out of your organization.
Katja: Well, Stephen, we’ve covered a lot of myths. What’s one that surprised you in 2021?
Stephen: It’s a good question. the thing that most surprises me is this idea that we can still predict the future. The reason I say that is we’re sitting here locked at home at the point where all of us thought we were going back to the office. I just saw today that Apple has postponed indefinitely when they’re going to go back to office. This idea that rather than reacting to news quickly and having the optimal way of doing things, we’re still trying to predict the future. I feel like COVID has been the great lesson in the fact that as great as we think we are at making decisions, we’re not always great at predicting the future, but what we are amazing at is how we can react successfully to it.
The American economy and globally the economy is going strong because we all moved onto the web, and we all were able to make really fast changes in the way we historically operated. I think the thing that we’ve learned more than anything else and the biggest myth is that change can be hard. I’ve watched organizations that never had video conferencing switch overnight and operate globally on video conferencing within a span of weeks. I think we can change quickly.
Kunal: I agree, Steve. And when you have something come in so significant that forces you to change, you’re able to break through barriers way faster than you thought was humanly possible. I guess, as we kind of wrap up here, what’s one enduring myth you wish would just go away based on the data you’ve seen over the last 10 years?
Stephen: It’s a good question. If I were to pick one myth, I think the biggest myth is that the sales organizations are going to continue to just operate in the same way they’ve done over the last 30, 40 years. I think a lot of people are tweaking around the edges. I see this as a transition from being a very qualitative, very opinion-based world to a very quant heavy world. We saw 20 years ago the marketing world move from brand marketing to digital marketing, and while it might have seemed scary at the time, today they’re one of the most powerful parts of any organization where arguably years ago, they were considered to be tarot card readers. Today they’re core producers. I think sales will go through a huge transition as it digitizes, and that will change everything about how we operate for the better.
Katja: That’s awesome. Thank you so much, Steve. It was so nice to have you on the show. And some of the takeaways that I’ve picked up are throwing out the old playbooks and leverage AI as well as relationships and connections to get better at many things, including forecasting, lead generation, building a pipeline, and more. With the universe of buyers and their access to information increasing, we also see sales teams growing with more people involved in the process. Thanks for sharing your thoughts on how to increase win rates and pitfalls to avoid. And most importantly, how buyers and sellers can work together. Thanks so much for being with us today, Steve.
Thank you for having me on the show. It’s been fantastic.
Thanks for listening to Growth Hacks. You can follow us on Spotify, Apple Podcasts, or wherever you listen. To learn more about us and TCV’s CEO and founder podcast, go to tcv.com or email us at firstname.lastname@example.org.
As the world shifts towards a knowledge economy, enterprises need to re-imagine how they do business. They are realizing that their employees are their most important asset and are searching for a smarter way to engage, encourage, and drive the best performance. Enter Humu, a platform working at the intersection of behavioral science and AI to solve that very issue.
Humu, a recent addition to the TCV portfolio, is rapidly gaining adoption from some of the world’s largest and most complex organizations. Its intelligent technology platform coaches managers and employees into developing work habits that are scientifically proven to drive performance. Humu was co-founded by CEO Laszlo Bock, former Google SVP of People Operations, and is the output of decades of his work and experience in helping make HR a more data-driven function. Laszlo is uniquely positioned to build the Humu technology platform into a must-have for organizations looking to drive employee engagement, optimize performance, and improve productivity.
Specifically, by nudging employees with short, behavioral science-backed recommendations, Humu provides personalized guidance that’s unique to each employee, helping workers to build better habits, while also driving towards organizational goals, including employee retention, manager effectiveness, productivity, and inclusive cultures.
TCV is thrilled to lead Humu’s $60 million Series C. The investment, which follows two years of significant growth for the Company, will fuel new product innovations geared to support managers and their teams. TCV venture partner Jessica Neal, former Chief Talent Officer at Netflix, has joined Humu’s Board of Directors as part of our new partnership.
TCV’s experience in seeing the magic in the Right Content, Right Person, Right Time
TCV has long understood the value of delivering engaging, timely content to the right person at the right time and has invested based on this thesis for over two decades, including in companies like Netflix (video), Spotify (music), Peloton (fitness), and Newsela (K-12 instructional content).
TCV believes that timely content curation and delivery should extend from our consumer lives to our work lives: if Netflix can feed us more of what we need to keep us entertained, why wouldn’t we benefit from similar capabilities in the workplace? Businesses need a system that serves us the right content at the right time to help us perform better.
What is exciting about Humu? Humu is driving real outcomes
Humu’s AI-based Nudge Engine™ technology drives timely “nudges” to encourage employees to do more of what creates optimal outcomes and experiences for employees and enterprises. Nudges are delivered in curated pathways that are algorithmically generated, sequenced, and tailored to a particular initiative and employee.
At a glance:
Every Humu nudge is based on academic research and carefully crafted by Humu “people analytics” experts
User experience panels ensure nudges are easy to understand and act on. Feedback loops make it possible to turn off what’s not working, and send more of what is
Employees turn to nudges more and more over time. Sustained nudge engagement rates across customers are as high as 95%
At Silicon Valley Bank, Humu’s nudges focus managers and employees on what matters most – and remind them at just the right moments to adjust their habits. That could be in supporting managers who may be too focused on execution at the cost of supporting employee development and encouraging them to find ways to offer their people personalized growth opportunities. Don’t take our word for it…hear it directly from Humu’s customer SVB:
“People don’t have to wait for management to roll out a time-intensive program. Humu provides our employees with relevant, customized feedback that’s not generic or mundane. Nudges democratize the employee engagement process; they make learning much timelier and easier for everyone involved. We have a 70% open rate, which means it’s going really well. The right nudge at the right time really makes all the difference.”
Chris Edmonds-Waters, Chief Human Resources Officer at Silicon Valley Bank
A team that helped build a trillion-dollar business, and is now on a mission to solve work for everyone
He co-founded Humu in 2017 with former Google colleagues Wayne Crosby (former Director of Engineering) and Dr. Jessie Wisdom (former People Analytics Manager). Together, this formidable team founded Humu “to make work better through machine learning, science, and a little bit of love” – not to mention everything they had learned about smart use of data.
“When we began this journey in 2017, we knew our experience in pioneering the field of people analytics would help us build what we believe is the best technology for supporting managers and employees, and we’re proud of the impact we’ve made.
This latest investment, led by TCV, signals our partners’ confidence in our ability to deliver on that promise long into the future, and we’re excited for what we’ll bring to the market, especially for managers, in the months to come.”
Laszlo Bock, CEO of Humu
TCV is excited to be a partner in building a category leader
TCV believes Humu represents an opportunity to back an emerging leader in the HR technology sector, led by a world-class team that’s uniquely positioned to penetrate a massive market with compelling industry growth tailwinds. With this latest round of funding, Humu aims to take steps towards executing its bold vision of facilitating building a unique, high-performing culture for its client organizations based on proven best practices. As a firm that focuses on long-term value creation, TCV believes that Humu, with its deep background in people analytics, has the potential to make a positive impact on the way we all work.
Menlo Park, New York, January 31, 2022 – We are delighted to start 2022 with the announcement of Velocity, a $460 million fund geared towards expansion-stage investment opportunities. After a momentous year in 2021 – resulting in 14 public listings, which include IPOs, direct listings, and SPAC transactions – TCV believes that Velocity will allow us to continue the firm’s history of partnering with leading companies from early investment rounds through IPO. We believe that Velocity is ideally placed to take advantage of a growing investment segment and will complement our parallel investment activity with ambitious tech companies at later stages of development.
Apply the insights of proven companies to ambitious growth companies
Velocity builds on our long history of success backing category leaders and is specifically designed to help founders of innovative companies as they shift from product-market fit to scaling up. With a dedicated team of investors, Velocity will draw on the resources and reach of the entire TCV platform to help ambitious expansion-stage companies achieve the next phase of growth.
TCV’s investment approach since day one has been our willingness to invest and reinvest through thick and thin, and across the company growth lifecycle, from early-stage funding to IPO and beyond. It also has been our steadfast belief that the strongest investment partners provide something far more valuable than assets alone. Since inception in 1995, TCV has backed category leaders across both B2B and B2C tech markets, executing 79 public listings and 69 M&As as of the end of 2021.
The firm has $28 billion of assets under management as of September 30, 2021. We believe our high profile and strong performance are due to our thematic approach (including fintech, education, prop-tech media/entertainment, e-commerce, healthcare, vertical SaaS, and DevOps security); our success in identifying future category leaders; our end-to-end operating support/rolled-up-sleeves approach; and our patient investment style. We work with entrepreneurs over the long term as their capital partner and believe that we can support them with acquisition capital as well as secondary funding to IPO anchoring, post-IPO support, and beyond.
The Velocity fund is already off to a promising start with several portfolio investments, including BenchSci, a global leader in machine learning applications for novel medicine development, and Passport, a modern international shipping carrier built for e-commerce DTC brands and marketplaces. Our aim is for a concentrated portfolio with access to the full TCV platform across investments of Series A, B, C, and beyond.
TCV Velocity features a dedicated team of investors and operators. It is headed by General Partners Matt Brennan and Gautam Gupta, who together bring a powerful blend of operating and investing experience. The Velocity investment team also includes three additional investors who have joined TCV in the past year from other leading venture growth firms.
Velocity investment themes
Although this list is by no means exhaustive, the Velocity team will be keeping a close eye on opportunities linked to the following high-growth sectors, which are already proven success themes for TCV:
Tech disruption across health & wellness
Democratization of financial services
Acceleration of AI/ML adoption
Supply chain digitization and optimization
Strategically timed for success
We believe the timing of our new Velocity fund has been well planned. With technology companies scaling faster and looking to expand earlier, we see what we believe to be a perfect opportunity to leverage our established platform to address the unique growth needs of younger/earlier-stage companies.
The Velocity fund intends to partner with TCV’s Growth funds to provide full lifecycle capital, generally from Series A through IPO. With Velocity, we’ll be taking our deep insights into what we believe makes a great company and applying them much earlier. TCV’s goal is to allow CEOs to think longer term and introduce them to TCV as a capital partner for the next decade, across all stages of their lifecycle, pre- and post-IPO.
A differentiated multi-stage investor
TCV’s “long view” and crossover approach, for which we are well known, is linked to our flexible approach that we intend, in turn, to tailor to the particular needs of each company and its early investors. TCV can lead or follow and has no minimum ownership requirements.
As well as investing across the lifecycle of a company, with both the Velocity fund and our Growth fund, our interests are no longer confined to a particular investment bracket: we generally write checks from $10M to $400M+. As such, TCV can support companies across a variety of requirements – from acquisition capital and secondary funding to IPO anchoring, post-IPO support, and beyond.
There are all kinds of new tech innovators out there that we believe are ideally placed to help; and in 2022, we look forward to joining them on their scale-up journey.
“TCV is using its vast experience of taking companies to IPO and beyond to help expansion-stage companies with equivalent ambitions. We’re enormously excited about the year ahead, as we formally bring to market this much anticipated new fund and engage with founders of companies that are rich with potential and aggressive ambition.”
– Matt Brennan, General Partner, TCV
“As our current portfolio CEOs will attest, we’re already active investors that partner with founders over the lifecycle of the company – from as early as a Series A all the way through an IPO and beyond. We have a 27-year track record of scaling what we believe to be iconic franchise companies (the likes of Airbnb, Alarm.com, EA, Netflix, Peloton, Spotify, and Zillow) and in many cases, we remain involved for the long term, seeing companies through multiple economic cycles.”
– Gautam Gupta, General Partner, TCV
“For more than a quarter of a century, TCV has invested in over 350 companies, including category leaders like Airbnb, EA, ExactTarget, Netflix, Spotify, Facebook, Alarm.com, Splunk, and Zillow. The experience of helping the founders of these companies scale their businesses into dominant public companies has given us the pattern recognition to help emerging companies earlier in their development cycle lay the foundation on the path to becoming future franchise names in the tech world. Our goal with the Velocity fund is to identify and support the next generation of category leaders on this journey.”
– Tim McAdam, General Partner, TCV
When Adam Weber joined Nerdy, one of the leading education technology platforms, as its Chief Marketing Officer, he had just left Dollar Shave Club, whose go-to-market strategy was vastly different from Nerdy’s. Nerdy had seen high growth by utilizing a marketing strategy based on capturing customers via search intent, and Adam and his team built out Nerdy’s two-way communication with its customers with a product-forward strategy that offered users free trials of the company’s enrichment programming, such as its expert-led Star Courses. While demand marketing was still very much a part of Nerdy’s marketing playbook, the product-led strategy that Nerdy adopted helped showcase its breadth of enrichment programming and also helped build trust and credibility with users beyond what they may have typed into a search bar.
Understanding Nerdy’s customer intent was also a key part of the marketing leading up to Nerdy’s IPO. Rather than simply focusing on financial data to present to potential investors, the Nerdy team sought to tell the narrative of Nerdy’s evolution and future growth to help illustrate the compelling data that Nerdy had in its financial statements.
In this episode of Growth Hacks, Kunal and Katja speak with Adam about how he modified his playbook when moving from a consumer goods company to a technology platform, and evolved Nerdy’s marketing strategy in the process. They also hear from Adam about how Nerdy built enrichment-focused partnerships with parents and schools alike, while alleviating some of the concerns that came with distance learning during the pandemic. We also learn from Adam about how he’s navigating the impact that COVID-19 has had on marketing measurability.
The importance of marketing narrative to build investor trust when taking a company public.
Given the breadth of financial information that must be rolled out when taking a company public, it’s easy to get lost in focusing on data when putting together prospectuses and other documents for potential investors. While financials and growth data are important for investors, Adam quickly saw that telling a compelling narrative of Nerdy’s past and future growth was just as important to late-stage investors as it had been to those who had invested in Nerdy’s previous private rounds of funding. Because Nerdy had such a strong product and a compelling vision for the future, Adam emphasized making sure that potential investors understood that narrative just as well as they did the company’s financial data. As Adam explains, “Even at this late-stage institutional phase, what makes the company unique, why we’re different, and how we can grow into the future is a fundamental aspect of [our jobs] as marketers.”
Why Adam prioritized understanding customer decision-making when moving from Dollar Shave Club to Nerdy.
Prior to joining Nerdy, Adam was the chief marketing officer at Dollar Shave Club, where the go-to-market was largely focused on reducing friction around decision-making, and bringing customers to the point of purchase decision as quickly as possible. But at Nerdy, customer decision making was largely based on understanding a customer’s specific needs and optimizing the customized solution out of Nerdy’s suite of products. Rather than focusing on top-of-funnel conversion, Adam’s team spent more time on developing two-way communications with potential and existing customers. Doing so helped build trust between Nerdy and its client base, and ensured that the company was delivering maximum value when customers signed up. While it would have been less complicated to focus on quick commitments, Adam says that the time spent understanding customer decision-making was time well-spent. “You have to know the nuance and decision-making for the category you’re in, and make sure that your go-to-market reflects it.”
How Nerdy shifted from a demand-driven, search focused marketing strategy to a product-driven go-to-market strategy.
One of Nerdy’s primary drivers of customer acquisition had been around users searching for online learning services. It had prioritized its marketing experiences around understanding that intent and demand, and customizing web experiences around that. But in recent years, the company has focused on a product-driven go-to market, where potential customers can test out free Nerdy programming, such as its Star Courses, where students are able to take enrichment programming from celebrities and top experts across fields such as astronomy, animation, and history. By having prospective clients engage for free in live classes taught by well-known experts, Nerdy’s customers were able to experience the unique experience Nerdy’s platform can deliver, rather than simply learning about a small slice of Nerdy’s product library. Adam didn’t dispense with the search-driven, demand-led marketing efforts; he and his team just expanded the strategy to lead with Nerdy’s product experience. Doing so allowed Nerdy to build trust and expand the two-way communications with its prospective clients, and nurture relationships over time.
Why Nerdy leaned into enrichment over education alone, and the payoff it had in building ongoing engagement with students and educational institutions.
As Adam built out the product-led go-to-market strategy, he and his team quickly learned that demand was growing for Nerdy’s enrichment courses, in addition to its suite of 1-on-1 tutoring, and small and large group classes. As school leaders focused their resources and energy on keeping schools open, extracurricular programs were frequently put on hold or canceled altogether.. This created a gap for Nerdy to fill by expanding its existing enrichment programming such as its Star Courses to blend fun and learning together while enriching students outside of their traditional classroom lessons. Nerdy also partnered directly with schools to help expand their breadth of enrichment courses outside of a standard curriculum by offering a wider selection of programming.
“One of the advantages of online is the availability of selection. It’s really hard for your local YMCA or school to deliver a broad option base of summer camps or afterschool programs. When you’re online, and have a purposeful platform like we do, that becomes possible,” says Adam.
Permanent changes that marketers will have to adapt to as a result of the pandemic.
As one of the leading online learning platforms, Nerdy saw increased demand during the pandemic. Even so, Adam cautions that marketers will have to adapt their measurement capabilities to better understand their audiences even after the pandemic. Because there’s far less visibility into a user’s journey with the recent privacy law reforms, Adam and his team utilize triangulation to understand customer decision-making from a variety of angles to understand how every dollar spent impacts a company’s bottom line. While tracking a user online will still be critical, other metrics will provide crucial insight into understanding and calculating marketing spend. As Adam explains, “[It’s] also understanding brand health metrics, it’s understanding survey data, and in multiple ways, understanding what’s happening underneath the hood so that you can get better and optimize.”