Home / Tech / This VC's fund manages $500 million in assets. Here's why it's focusing on late-stage companies and how it thinks it can help them take off. (AKAM)

This VC's fund manages $500 million in assets. Here's why it's focusing on late-stage companies and how it thinks it can help them take off. (AKAM)

 

HighBar Partners Managing Director Brian Peters

  • HighBar Partners specializes in funding later-stage startups that are looking to make the jump from a proven business model to exponential growth.
  • Many members of the venture-capital firm’s team have experience at startups, and HighBar likes to invest in companies that can benefit from their expertise, managing director Brian Peters said.
  • The firm focuses on the software sector, particular companies that are involved in business-process automation and in helping companies undergo a digital transformation.
  • It particularly likes startups that collect and help customers process or make sense of large amounts of data.
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Venture capital firms have different strategies and philosophies when it comes to their interactions with their portfolio companies. 

Some VC firms take a more laid-back approach, giving founders and executive teams plenty of room to operate. Others are much more interested in playing an active role in their companies, helping direct operations and guide decision-making.

HighBar Partners is on the more active end of the continuum. Most of its team has experience working at and managing startups. A big part of its strategy is to invest in mature startups that have already proven their business models and help them reach exponential growth by working closely with their managers, Brian Peters, a managing director at HighBar, told Business Insider in a recent interview. The firm specifically seeks out founders and managing teams that are looking for the kind of advice and guidance it can offer, he said.

“We’re a hands-on investment group,” Peters said. He continued: “If the management team is one that’s not looking for help … it might not be the right investment for us.”

Read this: One of the first backers of Skype and Wix.com explains why the European startup scene is starting to close the gap with Silicon Valley

That philosophy guides the number and type of investments HighBar makes, Peters said. The firm manages about $500 million in assets. But it has only about a dozen active investments at any one time and it only makes a handful of new ones each year, he said.

“Our model is not high volume,” he said. “We’re not sitting on 10 boards each.”

At a time when tech startups have a broader choice of investors than ever before, from sovereign wealth funds to corporate VC firms like Google’s GV and Salesforce Ventures, HighBar is betting a high-touch approach will become increasingly valuable — at least with a certain type of startup.

HighBar’s partners work closely with founders

Once HighBar invests in companies, its partners sit down with management teams and go over various aspects of their businesses, Peters said. They look at how well the startups are attracting customers and the effectiveness of their marketing efforts. They scrutinize the companies product innovation processes, he said. And they look at how well the teams are scaling their businesses, and whether they’re doing so efficiently or productively.

HighBar likes to establish benchmarks for particular metrics right after it invests and monitor whether those are improving over time, Peters said.

“We’re looking to roll up our sleeves with each of these teams,” he said.

The firm largely focuses on software companies, Peters said. It’s particularly interested in ones that help customers’ process and make sense of large amounts of data.

One of its most recent investments, for example, was in Signpost, a New York startup that offers customer relationship management software for local businesses. Founded in 2010, Signpost has collected data on 70 million US consumers. Last month, HighBar led a $52 million late-stage investment in the company.

“We love large data plays,” Peters said.

The firm is focusing on the digital transformation and automation

Lately, HighBar has been concentrating on companies that are focused on three big trends — the digital transformation of companies, business process automation, and the move of corporate workflows to mobile devices.

On the digital transformation front, it was an investor in Janrain, a startup that helps companies manage online customer registration and authentication. Akamai bought Janrain in January for $124 million in cash, according to the former’s latest quarterly report.

In the mobile workflow area, it’s a backer of PatientSafe, a San Diego-based startup that’s developed an app for doctors and nurses that helps them keep track of and communicate about treatments for particular patients.

Both investments exemplify its strategy. Both were part of larger, late-stage deals that occurred after the companies had already proven themselves.

“We like to own large stakes in business with a significant capital infusion and leverage our expertise,” Peters said.

Got a tip about a startup or venture capital? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Intel invests as much as $500 million in startups each year. Here’s what it’s looking for in new investments, according to one of its top VCs.

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