This week we go beyond New York to feature Lolita Taub from Baltimore, Maryland.
What drew you to become a Venture Partner specifically with NextGen Venture Partners?
It all started last summer when I moved to Baltimore to work at Catalyte as Chief of Staff and had the desire to be an operator and continue my early-stage venture capitalist career. Lucky for me, friend and All-Raiser Eva Ho, General Partner at Fika Ventures, introduced me to Ben Bayat, Managing Director at NextGen Venture Partners. When I connected on the phone with Ben and learned that I could be a part-time venture capitalist, it all clicked. Not too long after that, I became a Venture Partner.
NextGen is known to invest in companies that have “demonstrated strong customer interest in product.” How can you measure a strong customer interest in a product?
For me, an early-stage company that has “strong customer interest in product” is a company that has shown traction. Traction can look different for different business models and require the analysis of different metrics. For B2B SaaS startups, when assessing customer product interest, I like to look at the following metrics:
· Number of customers with active usage
· Churn
· % of customers who refer
· Number of customers referred
· Value per referral
· MRR, ARR
That said, to get a better sense of a SaaS startup, I also like to look at CAC, sales cycle and process, ticket size and pricing.
As the startup world is continually growing and so are venture capital firms; what is NextGen doing to differentiate themselves from other venture capital firms?
Different from most venture capital funds, NextGen Venture Partners leverages a network of 1,100 VP and C-Suite level operators who commit to help portfolio companies with expertise, connections and advice. What’s great about that is that NextGen Venture Partner portfolio companies get to tap into the network of functional experts (e.g., sales, enterprise tech) who can make intros to customers/distribution partners, help connect founders with upstream investors and help source hires for a startup.
NextGen focuses on B2B SaaS, digital health and next-generation commerce. Can you speak about the sector you enjoy most, and where do you foresee it going this upcoming year?
I am bullish about B2B SaaS. With the volume, variety, velocity and veracity of data that we have today, B2B startups that leverage it and combine it with analytics can help their customers enable quick-insight and drive decision-making. For example, Kairos, a Backstage Capital portfolio company, is leveraging the power of visual data to provide Face
Recognition tech so companies can control their own data, security and privacy. I foresee the trend of B2B data-centric SaaS startups to continue. On top of that, I predict that customers will demand more transparency in algorithm mechanisms, demand products that are non-technical talent proof, beautiful and offer an appeal to prosumers.
We live in a digital world and have the ability to work from anywhere; where do you foresee the next tech city emerging and why?
Not sure anyone knows, although I can tell you that Steve Case, through the Rise of the Rest Road (ROTR) Trip tour, is on the hunt for the next big tech city by exploring emerging startup ecosystems. And on his 2020 tour, Case is visiting Wichita, KS; Tulsa, OK; Oklahoma City, OK; NW Arkansas; and St. Louis, MO.
It’s possible that the metros that show the largest year-to-year growth in number of deals may signal the next big tech metro. Looking at the Q4 2019 Pitchbook NVCA Monitor report, it looks like we need to keep an eye on San Diego, Washington DC, Austin, Chicago and Philadelphia.
As an investor, though, I do not care where startups are located because great startups can come from any place and have founders from any background.
What are some requirements you look for in a company before investing?
Before making an investment, I focus on thesis alignment, the team, business model and my ability to add value to the founding team. My personal thesis involves investing in pre-seed/seed startups that are either led by or serving underestimated founders or communities. So, if a company does not fit that criterion, I will likely not invest. In terms of team, it’s important to see scrappy and values-aligned founders, with domain expertise and an aim to build a +$100M revenue business with a $1B exit. At the same time, I want to know that the scalability of the business and the “hotness” and size of their target market is there. Lastly, I want to know if I can add value through my network or expertise.
NYC FinTech Women focuses on new trends in the market; what sector do you think will be the emerging trend for 2020 and have you made an investment in the space this year?
Insurtech is my pick for emerging sector in 2020! It is part of the Fintech umbrella, has a huge (>$600B for Property & Casualty in the US alone) and fragmented market that has been slow to innovate, has tons of fraud (estimated at $30B+ per year in Property & Casualty alone), has had poor customer service and is having to adapt to new risks brought about by tech (e.g., cyber). It also hasn't sufficiently reached many underserved populations globally, and smartphones as a distribution and data collection platform are changing that.
Opportunities exist for unicorns to grow and better products and services to be provided.
My partner Josh Taub and I, made an angel investment last month in Leap, a startup that provides a rent guarantee product that benefits rental applicants with little or no credit history that would otherwise be unable to obtain an apartment. I love that they are tapping into and serving an underserved market.
Reach out to Lolita on LinkedIn.
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