OpenView Thrives On Full-Service Philosophy
OpenView Venture Partners looks to provide every portfolio company with more than just money and a board member with a fat Rolodex.
Through its affiliate OpenView Labs, the Boston firm offers services ranging from management coaching to market research to developing business initiatives that help portfolio companies execute a rapid expansion in North America.
Lately, it’s also become an online source of advice and content for its chief executives and other entrepreneurs. OpenView has studios for knocking out videos and podcasts, and sends out a weekly newsletter with tips on everything from linking LinkedIn and Twitter accounts (think twice if you tweet a lot about personal stuff) to clearing start-up recruitment hurdles. Members of the OpenView team blog, tweet, network on LinkedIn and do whatever else they can to share information about building companies.
“They really focus on trying to bring value to the CEO,” said Michael Sharma, chief executive of OpenView portfolio company Exinda Inc.
OpenView, which once maintained a relatively low public profile, upped its Web presence beginning in mid-2008, first launching blogs, then its newsletter, and finally the OpenView Labs website last October – all with content about building companies. “It became clear that content marketing was really important,” said Scott Maxwell, the firm’s founder and senior managing director.
OpenView has a reason for being more proactive than some venture firms. It specializes in what it calls expansion-stage software and Internet companies that are chiefly focused on business markets. A typical company has between $2 million and $8 million in revenue when OpenView invests, Maxwell said. OpenView’s goal is to help it grow revenue to $20 million to $30 million, which makes it interesting to potential acquirers, he said. It’s also a good time to assess the potential of building a public company.
Maxwell labels what his firm does as “early growth,” where the chief risk is whether a company can execute its business plan. He likens OpenView to a basketball team where everyone works together, while other firms rely more heavily on the individual efforts of their partners.
Dan Rodrigues, founder and CEO of medical-billing software company Kareo Inc., said he picked OpenView over three other firms, two of them top-tier Silicon Valley investors, because he had built a strong relationship with the firm and thought it would be a good fit for his expanding company.
Since Irvine, Calif.-based Kareo raised $9.5 million from OpenView last September, Rodrigues found Open View’s approach to be low-key and useful. He has taken advantage of three of the workshops the firm runs for its entrepreneurs, which feature experts in subjects such as sales execution. OpenView also helped the company recruit some key personnel, while its research unit, which has outsourcing capabilities, helped Kareo build a target list of prospective customers for a cold-calling campaign.
Sharma, the Exinda CEO, said his prior experience as chief operating officer at PlateSpin Ltd., which Maxwell backed while at Insight Venture Partners, was one reason he agreed to join Exinda, which OpenView backed in 2007. He said OpenView team members have multiple skills and “what they do really well is expose those other skills to the portfolio companies.”
OpenView’s investment strategy relies heavily on research and cold calling to find deals, so while the firm’s higher visibility does seem to be increasing deal flow, Maxwell said that what’s really important is that “we don’t have to work that hard at explaining who we are any more.”