Each week on The Cap Table (TCT) we highlight investors, operators, founders, and industry leaders in the private markets to share their tribal knowledge of how to get onto “the cap table.” Know someone we should feature? Let us know here!
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We’re thrilled to announce this week's exclusive with Nick Candito, 4x entrepreneur, Enterprise Software CEO, and startup investor.
A former Forbes 30 Under 30 recipient, Nick has built and scaled multiple SaaS organizations, which has propelled him onto the investing scene. Described as “the guy that just loves Enterprise Software”, Nick has invested in over 35 companies (including Carta, Verkada, Tekion, to name a few), and is well respected by both founders and investors across the tech ecosystem. We discussed:
The inspiration for launching Progressly (acq. by Box in 2018) 🚀
His new investing endeavor: Netshire Technology 💰
Advice for first time Board members 📚
His cap table pitch to founders ⺇
The state of Enterprise Software in 2030 🔮
TCT: Thanks for sitting down with us, Nick. Let’s jump in.
How did you start out with regards to your career?
I was a college athlete and went to business school to study finance then graduated when the world was still recovering from the 2008 financial crisis. I somewhat stumbled into software by deciding to work with the smartest group of people that made me an offer in Westborough, Massachusetts.
That’s where I cut my teeth as a product manager.
You founded Progressly, a no-code workflow automation platform, in 2014. What was the inspiration behind this, and when did you know you were ready to leave your day job to launch Progressly?
That first startup was started by a few former executives from a company called PhaseForward, which was acquired by Oracle for $685M in 2010. What we were looking to build was a cloud-based clinical suite - think of what Veeva has done as a $40B public company today. In that world, everything is done according to a standard operating procedure (or SOP).
I loved working that way and was always wired to create frameworks or mental models to better organize the world around me. After building a few other companies (including a move out West to join RelateIQ), the insight was that the business process is more than just static documentation and there is no system of record for how individuals, teams, and departments work.
In some ways, I left Salesforce too soon following the acquisition in 2014, but in other ways, you can get comfortable very quickly. I moved to Silicon Valley to be around the boldest entrepreneurs and best investors in the world, so it was time to keep a promise that I had made to myself.
That’s when I went all-in on founding a company.
Joe Lonsdale was a key investor in RelateIQ and we teamed up again on Progressly. He’s the most relentless networker that I’ve ever been around. We had dinner one night at his house and I walked over to the table to see Aaron’s seating card next to mine. There had been a few run-ins through the Forbes network and with Box being a key reference customer for RelateIQ when our product was still getting there, but this was a chance to talk about what Progressly was focused on.
Progressly (both the team and technology) now power Box Relay as a key component to the digital business transformation that companies like Okta, Zoom, and Slack are driving. Box was full of incredibly talented people and I spent a lot of time thinking about different leadership styles. At Salesforce, everyone talked about how Marc Benioff has incredible vision, loves to market, and kind of makes these strategic decisions that only prove to be right. At Box, everything was about the energy that Aaron brought. He would really get in the weeds, seemed to be everywhere across the company, and show a relentless focus on the customer.
I’m still very proud of our team and will be forever thankful for what I learned overall.
Since then, you’ve been an active investor, with investments in 35+ companies (Carta, Verkada, Tekion, Observe.ai, StEDI, Almanac, to name a few — as well as a Limited Partner (LP) — funds like 20VC, Chapter One, and Original Capital.
How did you get into the world of investing? What have you learned thus far?
My grandfather was the kind of role model who lived by the example he set. When I was very young, he would let me play on his typewriter and eventually had a computer before I even knew what it was. He was an old-school Buffett kind of investor that was reading everything. When he would swing by our house, he would drop off materials from his mutual fund investments and magazines that he had already highlighted, noted, and cut up. When I got comfortable with the concepts and understood a bit about how he thought, I asked him a lot of questions.
Always humble, he finally told me that he ran sales at a company called Liqui-Box that sold to Dupont for $333M in 2002. He jokingly said, “I pulled over the car and needed a calculator to check my math” before he retired to spend all of his time on investing and family.
That is the true origin story of how I got into investing.
I missed on several opportunities to back companies like Mode Analytics, Clockwise and Split out of RelateIQ, but those founders continue to be good friends. Over time, if you are around enough people you believe in, it’s easy to support them on principle. That kind of mindset with a bit of fortuitous timing has helped me get into some competitive investments.
Ultimately, I think it’s all about if a founder would recommend you within their respective network.
You’re a busy person. What’s your secret for staying organized?
I start my days early.
My wife and I have a 2-year-old daughter so I try to get as much done as possible before she wakes up. This usually means 30-45 minutes responding to text messages and emails before heading to the gym. While there, I’m somewhat focused on visualizing the day. My calendar is always the source of truth for whatever needs time and “unscheduled” events even get added so I can review how I spent every hour.
It sounds crazy, but that gives me that ability to feel like I’m caught up to start each day, plan out what are the highest priority things to accomplish, and then audit how I allocate time across major areas like work, personal, and family.
You’re an active advisor to companies like Padlet, Flatfile, Alloy Automation, and Charli.ai (to name a few) and a board member of Think Together, which is an educational non-profit. What’s the most challenging aspect of being an advisor? What advice would you give for new board members?
The theme that applies to both is that people need to trust your perspective.
The good news is; it can come from experience or preparation.
As an advisor, you need to be explicit with your feedback but also empower the team to make it their own. They won’t always agree, but hopefully you’re driving towards a better direction together. Where it gets most difficult, and so far as an investor I’ve been very fortunate, is that the best companies don’t really need you and the ones that require you to drive more than appropriate might not be the best place to spend any available cycles. I’m still building those skills as they are counter to everything I know as an operator.
As a board member, I’ve tried to really focus on building relationships with folks that I hope to work with for a long time. Two good examples from Think Together are Sang Peruri and John Turner — exceptional people and folks I’ve enjoyed getting to know. It’s also about the board dynamic and our CEO (Randy Barth) is a truly visionary founder.
The biggest mistake I see board members make is not coming prepared.
But I also view that as part of the CEO’s responsibility: to define a clear strategy and check in with every board member for feedback related to key points to decide on before each meeting.
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What’s the biggest kept secret in angel investing right now?
We’ve found success taking a network-driven approach. This means a few other founder/CEO types that have also seen a lot - good and not so good.
It’s a three-part benefit:
We cover a lot of ground collectively
We all bring different strengths to the conversation
There is more capital deployed into companies that we view as future winners
My preference is to gravitate to co-investors that exhibit hustle and horsepower. There is always something more to do as an investor, so this has served us well.
You’re now the Founder & Investor at Netshire Technology. What was the inspiration behind Netshire, and can you tell us more about it?
First and foremost, I’m a huge believer in black OR white thinking. Enterprise software is cool today, but it wasn’t that long ago when consumer was viewed as where the outlier deals are found. It’s somewhat embarrassing to admit how many times I’ve read everything on Jason Lemkin’s SaaStr blog or how my version of Behind the Cloud ended up looking like a reference manual. When (Marc) Benioff first walked into the basement of RelateIQ, our CEO Steve Loughlin introduced me as “the guy that just loves enterprise software.”
Netshire is really meant to be a play on Berkshire with a focus strictly on enterprise internet businesses. I now have several LP investments, direct investments, and have done a few collaborative deals, so this captures a select portfolio. It’s also been a blast to informally work with two up-and-comers in Shamus Noonan and John Wagner, who I trust will eventually be players across our ecosystem.
The hope would be to continue to actively invest in venture-backed companies and then deploy some future returns to help folks launch cash-generative businesses or eventually do majority purchases in more of a traditional personal family office model.
What’s your investment thesis?
A good way to think about it is: ocean, wave, and surfer. This recently came from my buddy Konstantine Buhler, who is now at Sequoia Capital.
When investing in early-stage companies you must understand the market, grasp a key factor that enables the opportunity, and, most importantly, assess a team. Founders need to be partners in the truest sense, which means caring to an irrational degree about willing an idea into existence.
I try to avoid solo founders (based on my experience), anything that’s pre-product, processes where you cannot get to know folks other than the CEO, and HR generally.
What’s your diligence process like? How do you go about selecting companies to invest in?
If I understand the market, see why this could (continue to) happen now, and believe you/team are there for the journey, then I’ll move forward with diligence. It often happens in parallel.
This usually means pinging a network of folks who know the individuals or company followed by a demo of the product and time with the team. In circumstances where it’s possible, I also like to chat with customers, employees, and even prospective candidates.
Do you invest across all industries and geographies?
Yes and plan to do so more deliberately.
When it comes to investing, how do you measure success (outside of traditional metrics like IRR, MOIC)?
As an individual, it’s much easier to calculate money invested and potential return. I’m hoping for a 10x on any venture investment.
Time horizon is one of the hardest things for new angel investors to grasp, but the best time to start was last decade and the second-best time is now.
My mindset was always that the sooner you get going, the better.
Do you have any mentors? If so, how has this contributed to your success to date?
This is critical for anyone who wants to do great things. My mentors have mostly helped me to see blind spots and push on things that you intuitively know but are not proactively addressing. It’s all bucketed around awareness for me personally.
Mentors have to be people that (a) you can trust (b) care about you as a person and (c) have forgotten more than you’ve learned so far. That makes for the most amazing combination.
The worst-case scenario is when someone surrounds themself with folks who aren’t real mentors (criteria above - particularly b.) and ends up only getting told what they want to hear. We've all seen or heard about that turning scary.
What’s your secret for getting on the cap table?
I tell founders that I know what it’s like to think about something incessantly for years. No one thinks about a company more than the CEO, but other founder/CEO investors tend to help in non-obvious ways while the business is being built. Categorically, this probably has to with product, people, and fundraising - and those things always come up opportunistically.
So the pitch is simple, I’m going to be thinking about your company more than anyone not on the payroll.
The year is 2030. What’s the state of Enterprise Software?
Enterprise software will fall into roughly two buckets as a result of accelerating innovation and power-law dynamics around customer purchasing patterns:
Platform and Infrastructure
Very few companies (for example; Salesforce, Shopify) will be able to execute at scale across both themes. If you’re caught in the middle or fail to recognize a consolidating market, it’s trouble.
Thank you for your time and thoughts, Nick. We look forward to the continued success of you and the organizations you’re involved with!
Follow Nick on Twitter (@nickcandito) for more insights into VC, startups, and more!
Deal News 8/1-8/7
GentiBio raises $20,000,000, led by Novartis Venture Fund, OrbiMed, RA Capital Management | GentiBio is a biotherapeutics company developing engineered regulatory T cells (EngTregs) programmed to treat autoimmune allergic diseases.
Zibo raises $10,500,000, led by Canaan Partners | Zibo is a landlord platform with financial services and property insights.
Isima raises $10,000,000, led by Engineering Capital, Sway Ventures | Isima represents a leap ahead in an industry typically comfortable with incremental change.
Big Run Studios raises $5,250,000, led by EOS VC Fund, Transcend Fund | Big Run Studios is a building cutting edge mobile games for overlooked and underserved audiences.
Orum.io raises $5,200,000, led by Homebrew | Orum.io is a New York-based company that develops a platform to creates instant wallets through financial software.
GreyNoise Intelligence raises $4,800,000, led by CRV | GreyNoise is a cybersecurity company that reduces false positives by filtering pointless Internet background noise
AgentSync raises $4,400,000, led by Caffeinated Capital, Elad Gil | AgentSync is a powerful, easy-to-use Compliance as a Service solution.
WorkPatterns raises $2,800,000, led by Founders Fund, Javelin Venture Partners | WorkPatterns is a platform that helps improve team communication and accountability.
CASHDROP raises $2,700,000, led by Harlem Capital Partners | CASHDROP is a mobile commerce platform that helps businesses create and manage an online storefront from a smartphone.
HyperQube raises $2,500,000, led by Leawood Venture Capital | HyperQube is a cyber range as a service offering that enables enterprises to quickly and easily build an exact copy of IT infrastructure.
Minnow raises $2,200,000, led by Elevate Capital | Minnow is building a network of IoT-enabled food delivery and pickup stations for office buildings and other workplaces.
Aerovate Therapeutics raises $72,600,000, led by Sofinnova Investments | Aerovate Therapeutics is a biotechnology company focused on developing drugs that meaningfully improve the lives of patients.
Radish raises $63,200,000, led by Kakao Page, Softbank Ventures Asia | Radish is a mobile fiction platform for serialized storytelling.
Buckle raises $31,000,000, led by Eos Venture Partners, HSCM Bermuda | Buckle provides financial products and services to the shared economy, beginning with insurance.
Censys raises $15,500,000, led by Decibel Partners, GV | Censys is a cybersecurity company that offers Internet-wide continuous visibility and real-time risk assessment.
ROOM raises $12,500,000, led by Slow Ventures | ROOM is a startup making room for people in the modern workplace through flexible and affordable solutions.
Qualified.com raises $12,000,000, led by Norwest Venture Partners | Qualified.com is a B2B marketer that allows buyers and sales reps to connect through real-time website conversations.
Move raises $10,000,000, led by | A Brand New Supermarket
IgGenix raises $10,000,000, led by Khosla Ventures | IgGenix is a biotechnology company, directly address food and other severe allergies.
Kyber Data Science raises $10,000,000, led by Cowen Group, Ian McKinnon | Kyber Data Science is focused on developing and selling proprietary datasets across a variety of sectors to institutional investors.
MikMak raises $10,000,000, led by Wavecrest Growth Partners | MikMak is a platform that enables traditional brick-and-mortar brands to gain insights & view the activity of major online retailers.
Smalls raises $9,000,000, led by Left Lane Capital | Smalls is a direct-to-consumer pet food company that produces human-grade and fresh food for cats.
Breezeway raises $8,000,000, led by Schooner Capital | Breezeway is a property care and services platform intended to reduce the headaches of property management.
Rippling raises $145,000,000, led by Founders Fund | Rippling is a human resource management company that manages employees’ payroll, benefits, devices, and apps.
Taysha Gene Therapies raises $95,000,000, led by Fidelity Management and Research Company | Taysha Gene Therapies develops treatments to eradicate severe and life-threatening monogenic diseases of the central nervous system.
Springboard raises $31,000,000, led by Telstra Ventures | Springboard is an e-learning platform that prepares people for modern careers through cutting edge curriculum and mentor guidance.
PandaDoc raises $30,000,000, led by One Peak Partners | PandaDoc enables users to create, deliver, and manage their teams‚Äô quotes, proposals, contracts, and other sales collateral.
Palmetto Clean Technology raises $29,000,000, led by | Palmetto Clean Technology builds and operates clean energy projects for residential, commercial, and utility customers.
Crossbeam raises $25,000,000, led by Redpoint | Crossbeam finds overlapping customers and prospects with your partners while keeping the rest of your data private and secure.
Syntiant raises $35,000,000, led by Applied Ventures, M12 | Syntiant is a deep learning tech company providing AI voice and sensor solutions.
TemperPack raises $31,000,000, led by Wheatsheaf Group | TemperPack is a materials engineering and manufacturing company that develops packaging solutions through sustainable design.
Ginger raises $50,000,000, led by Advance Venture Partners, Bessemer Venture Partners | Ginger is an on-demand mental health company.
MicuRx Pharmaceuticals raises $300,000,000, led by Huagai Capital | MicuRx discovers and develops novel antibiotics to prevent and treat drug-resistant bacterial infections.
Mode Analytics raises $33,000,000, led by H.I.G. Growth Partners | Mode Analytics provides online services for analyzing data.
Yotpo raises $75,000,000, led by Bessemer Venture Partners | Yotpo is a commerce marketing cloud with advanced solutions for customer reviews, visual marketing, loyalty, and referrals.
Fractyl Laboratories raises $55,000,000, led by Taiwania Capital | Fractyl Laboratories is a biotechnology company that provides curative therapies for metabolic diseases.
Farmers Business Network raises $250,000,000, led by Blackrock Innovation Capital | Farmers Business Network is a farmer-to-farmer network developed to help farmers optimize their financial performances.
Sources: Crunchbase, LinkedIn, Twitter
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