Venture Equity

Scaleworks Venture Equity Fund was created to invest in high-potential SaaS businesses, that could benefit from increased focus on strategy, go-to-market and team building.

HOW IT WORKS

$3-10 M

ANNUAL RECURRING REVENUE

We invest in B2B SaaS companies, with a proven product and stable customer base.

100%

COMPANY ACQUIRED

Invests are typically made to acquire a substantial majority of the business

6

SCALEWORKS PRINCIPLES

We are a principles driven team and apply these to operating all our companies

WHAT IS VENTURE EQUITY?

We are strong believers in designing your own category, we’ve carved out a unique (and needed) position between venture capital and private equity. We believe in scaling quickly—but not at all costs, and we want the entire portfolio to succeed rather than being carried by a single outlier. We also invest in growth over any financial engineering that spins cash off the business.

FREQUENTLY ASKED QUESTIONS

We buy business to business (B2B) software as a service (SaaS) companies that generate the majority of their revenue on a recurring basis. We are vertical agnostic. We like the business to be doing at least $3m in annual recurring revenue, and have above 70% gross margins. We do not require a record of profitability.
Like most investors in the SaaS world, it is primarily a combination of revenue and growth. Secondarily, we consider customer base profile, install base health, funnel metrics, and position in the market. We have one strict rule here – we do not invest in shrinking businesses.
We like businesses with a diverse customer base, not businesses with a very small number of customers or with a large percentage of revenue tied to a small number of accounts.
No. We have bought businesses across the US, and internationally, and we are happy to continue doing business where ever good companies are located.
Many of our companies have a somewhat distributed team! We do favor building centralized teams, mostly out of our shared workspace in San Antonio, but we do not require anyone to relocate as part of joining Scaleworks and we are delighted to work with the existing team, wherever they are situated.
This is one of the most common questions! We can move fast, since we look at businesses with similar dynamics every day, and we have a pretty straight-forward and standard set of legals and diligence requests. Generally any slow-down is on the company side as they prepare diligence information they may not have to hand. From first call to term sheet can be as quick as 2 weeks, and from term sheet to close, between 30 and 60 days on average.
Because we see Scaleworks as the next phase of growth in a companies evolution, we believe in order to bring that about we need to have a fresh perspective, that may be more focussed, or experienced, in scaling and growing a company “from 3m to 30m.” We are happy if the founders would like to stay on in a functional role, but we’ve found generally founders are excited to move onto a new project or role elsewhere, having poured so much into getting the company from concept to generating millions in revenue.

We focus on growth! We are not financial engineers so we do not try to generate high cash flow to take out of the company, we prefer to invest every dollar back into the business, for as long as we see a growth opportunity. We will bring in a CEO, and the Scaleworks team will work with the new CEO and existing company team to figure out what the next steps should be. We have the fortunate position as seeing a number of SaaS companies under one roof – so we can share a lot of learnings. And because we do not over capitalize the company, we do not burden the team with unrealistic growth expectations. We like to think we have a ‘common sense’ approach to business, and with a health cap table and balance sheet, we are able to execute this.