TLDR:
– The landscape is changing for investors eyeing the digital transformation of B2B sectors.
– The profile of founders has shifted, with more experienced executives helming startups.
– Exponent Founders Capital looks for investments that will ride an “exponential growth curve.”
– The firm takes a judicious approach to investments, backing one or two startups per quarter.
– There is particular appeal in backing B2B firms that solve hard problems for interesting customers.
As investor FinTech forays have lost countless billions of dollars over the past few years, capital is ever-scarcer. The very profile of the founders themselves is changing, too. As 2024 dawns, Raza — whose firm has, in the past, backed the likes of Robinhood and Plaid — now encounters more experienced executives helming startups. Whereas in the heady days of the pandemic, young techies might have raced to raise $100 million of capital with scarcely-formed business models, no products or customers at launch and short-term exit strategies, now a more measured individual surfaces. “The founders now are customer-centric, product-centric and are saying ‘this is going to be my life’s work and journey for the next 20 years,” Raza said.
