The seeds of OpenView Venture Partners were planted over the last three decades, as its team members worked with start-up businesses, acted as consultants, built companies, participated on boards, and worked with other Venture Capital firms. The common theme that brought everyone at OpenView together was the desire to build a better model to help emerging growth technology companies realize their visions in a way that combined capital, strategic, and operational assistance.
The problem, we collectively realized, is that most young companies are often staff, skill, and network constrained, and they could benefit from having a highly skilled and engaged partner to help identify and address their issues as they grow.
Our belief was that the ideal Venture Capital partner needed to possess a deep expertise and network that would be appropriate for its portfolio companies. As such, that partner should specialize in a particular sector, stage, and geography, allowing it to assemble the right collection of expertise. The ideal partner would also have a staff that was large enough relative to the number of companies it was working with — and provide a mix of the most important skills — in order to give meaningful attention to each portfolio company. Finally, we also believed that the ideal partner needed to adopt a culture and approach that would help build meaningful relationships with the senior management, board, and investors of the early stage companies it invested in.
Over time, it became clear that the best market focus for OpenView was software and technology, the best stage of company development was expansion stage, and the best geography was North America. With those focal points in mind, we set off to build the best approach for finding and investing in the ideal target companies. Once we made an investment, our focus become identifying the ways in which we could be the ideal partner to our portfolio companies.
We began executing against the OpenView model in 2000, while at Insight Venture Partners. Then, in 2006, Scott Maxwell led a team of six partners to form OpenView Venture Partners, with the goal of continuing to refine and improve our model. The basic idea of the firm was to be sharply focused on our chosen sector, stage, and geography. From there, we would organize all of our resources around finding the companies that best aligned with our strategy, helping them become large and dominant in their product markets.
Geographically, we were willing to invest anywhere. But being a Boston-based firm, we also recognized that we would be playing to our strengths and our North American centric network if we limited investments to companies that possessed strong North American growth initiatives. Quite simply, we believed that we could offer the most meaningful assistance to those companies with a growth strategy of penetrating North American markets. With that said, we still believe that as companies grow larger, they need a global footprint and we continue to make every effort to help with global expansion in all geographies.
When OpenView was founded, we also realized that if we were going to truly help companies grow, we needed to keep the size of the portfolio small relative to the number of people we employed at the firm. So, we set out to raise a fund that was large enough to be meaningful, but small enough to help to each portfolio company. We settled on a $100 million fund and raised it in September of 2006. We followed that up with a second fund in 2008, this time with a $125 million size limit. Including the funds that we’ve created to allow our value-add network to invest in, we have a total capital size of $240 million.
Since our inception, we have had an “outbound program,” which is our unit in charge of finding the companies that best fit with our investment model. The team involved in the outbound program spends most of its time researching interesting sectors and prioritizing companies, reaching out to the ones that we think best align with our model. We spend a large amount of time discovering growth pockets in the economy, but we also look for unique companies that have great growth potential in slower growing parts of the economy.
Since 2006, we have also had a “value-add” program that we offer to our portfolio companies. In 2008, we organized our value-add team into a separate unit, which we called OpenView Labs. The mission of our labs team was — and still is — to offer assistance to OpenView’s portfolio companies’ management, helping them build great companies by gathering, creating, storing, and disseminating best practices across all functional areas. We believed that separating the team and approach from the investment process would allow the Labs team to focus its attention on value-add activities, best align with the needs of our portfolio companies, and develop an operating culture that matches up against the culture of our portfolio companies.
The dedicated full-time teams, Senior Advisors, and network at OpenView Labs spend their time working on behalf of the OpenView Venture Partner’s portfolio companies. That group’s work includes incubating methodologies, testing approaches, performing research projects, developing and implementing forums and workshops, gathering the best network and ideas for building great companies, and coaching the management of the portfolio companies.
We make ongoing adjustments to our team and approaches as we receive feedback from the companies we work with. In addition, we provide resources that can help our portfolio companies in almost any area of their business.
Over the last few years, the OpenView team has developed significant expertise and material relating to building expansion stage technology companies. Until recently, we were very private with our ideas and resources. We shared them only with our portfolio companies through forums, our online collaboration platform, and direct engagements.
But in mid-2009 we decided that we had been operating in a dated model and started opening up our ideas to the public. Around that time, we launched our blog. Everyone in the firm began to post their ideas and interests publicly and we followed that up with a weekly e-mail that sent out our best ideas from the week, along with a few external ideas that we had found. Then, in October 2010, we launched our OpenView Labs Website, a more structured site that continues to offer ideas and inspiration to our emerging technology company community.
There were two main reasons that prompted us to be more public with our value-add ideas: to demonstrate our knowledge to companies that might be interested in taking an investment from OpenView Venture Partners and to better help the people we meet whose companies aren’t currently a good fit with the OpenView investment criteria.
Our overarching mission is to produce actionable and digestible ideas and inspiration that help our readers build great companies.
We have a great portfolio, a great team, and great approaches for investing in and helping our portfolio companies. That said we work hard every day to make ongoing adjustments that help us achieve our aspirations. As Scott says, we are continually changing, but the one thing that doesn’t change is our aspirations.
You can learn more about OpenView in the About Us section.
At OpenView we target expansion stage technology companies that have solid growth, are achieving $2-$20 million in annual sales, and are interested in raising $5-$15 million in capital.
Companies that have solid growth, are achieving $2-$20 million in annual sales, and are interested in raising $5-$15 million in capital.
We target technology companies in markets that include software, Internet, new media, and technology-enabled business models.
One of the unique things about the Sales Execution Workshop, and OpenView workshops in general, is that there is a commonality among attendees. This workshop in particular includes VPs of Sales and CEOs from expansion stage companies across the country, within similar stages of development. As a result, we are all facing a number of common challenges or obstacles in our companies, across our respective markets. The benefit of the relationship with OpenView allows all participants to openly collaborate and communicate lessons learned and best practices, which is unique to most training venues. Having the agenda built around the feedback and challenges each of us are facing on a daily basis, was of great benefit and will help tremendously with our 2012 plans. The presentation materials were well structured and generated a lot of active dialogue among the attendees. Each session left me thinking, how can I implement part, if not all of the items that we covered. A few of the key takeaways for NextDocs dealt with the importance of the further development and refining of our value proposition, how to effectively build and maintain an accurate forecast, what are the key performance indicators that we should track to actively measure our success and the value of personnel reviews. Last year we moved towards doing annual reviews, instead of semi annual reviews with everyone in the company. During the conference we discussed having a touch point every quarter to assess success and areas of improvement. Looking back, we would have had a better pulse on individual performance and provided a more proactive approach to provide process or performance improvement feedback. Moving forward, we will be implementing quarterly touch points to support the formal review process that takes place at the beginning of the year with our sales team. Another topic we discussed was forecasting. Forecasting is always an interesting topic. There are a lot of great ideas and recommendations on how to effective forecast. One of the more simplistic, yet powerful takeaways here was to manage to the forecast number, rather than managing the accounts to the forecast. Overall, I believe the two-day session was a great success for all involved. I know we left know more than when we arrived on day one. Lastly, I would like to commend OpenView on contracting Rich Chiarello to conduct the training. Not only is he an industry sales leader, but his ability to command the room and keep everyone focused and on task was more than commendable. Truly, a great job by all. I look forward to attending the next session.
Erik Smith VP of NA Sales and Alliances, NextDocs
The OpenView team helped us to design, implement and hire an inside sales team early in 2011. By the end of 2011 the team had become a consistently producing machine that is poised to grow significantly in 2012. The team started off 2011 from scratch contributing 0% to topline revenue and has grown so rapidly that in 2012 we expect inside sales to deliver over 20% of company revenue, which is an amazing feat.
Pete Gombert CEO, Balihoo
Success is the result of great aspirations, a solid set of strategic goals, appropriate resources, and relentless execution.
What makes OpenView Partners most unique as a VC is our team of strategic and operational consultants at OpenView Labs. The charge of Labs is to create, gather, store, and explain best practices on behalf of our portfolio companies.
