Stage 2 Capital launches $80M Fund II targeting B2B software startups
Boston go-to-market venture capital firm Stage 2 Capital kicks off its second fund with plans to invest $80 million into B2B software companies.
The firm's approach combines venture capital expertise with a diverse community of over 250 limited partners and go-to-market experts who work with portfolio companies to accelerate revenue growth.
Firm co-founders Jay Po, a former investor at Bessemer Venture Partners, and Mark Roberge, former chief revenue officer at HubSpot, started Stage 2 Capital in 2018.
While at Bessemer, Po told TechCrunch he met startup founders who were not sure how to scale revenue or build a sustainable sales machine. He saw how big the skills gap was in go-to-market (GtM), so on nights and weekends he took classes on sales development to better understand what was going on.
At the same time, Roberge was on faculty at Harvard Business School and was consulting startups. He, too, saw founders struggle to build out their GtM function, so much so that gathered a bunch of data points and put them all together in a book, The Sales Acceleration Formula: Using Data, Technology and Inbound Selling to go from $0 to $100 million."
Stage 2 Capital team. Image Credits: Stage 2 Capital
Po said the firm was virtual before it was cool," which is how it has been able to invest in diverse geographies and set its own pace in terms of curating its network and making introductions.
Their goal is to educate startups on the right time to scale. While startups should be growing 100% or 200%, many startups scale prematurely because they see certain companies experience massive growth all at once and assume that is the way to do it, Roberge said.
We find companies jump into that set of goals prematurely and are not ready for it," he added. We help them to understand when and how fast they can go. They are often looking at that prior success, but are not appreciating the context, like who the other company was selling to and the environment at that time."
Po and Roberge launched their first fund in 2018, raising $15 million, and ended up making 11 investments in late-seed stage to Series A companies and amassed a network of 97 LPs from companies like Gong, Procore, Atlassian, Asana and Drift. The firm wants to assist companies in changing the world, but Roberge said that will take a while, and that peers were impressed with the early signals of the investment thesis.
Investments from the first fund include companies hailing from across the United States, including Sendoso, Ocrolus, Gosite and Reibus.
Stage 2 Capital stands out from all other VCs because of the expertise and partnership Jay, Mark and the LPs bring," said Kris Rudeegraap, founder and CEO of Sendoso, in a written statement. They've exceeded expectations on delivering what they promised and we've increased our revenue almost 10 times in the short time since they invested."
The firm's second fund represents a five-time increase in investment capital, Po said. He expects to be able to invest in another 20 companies with an average check size of $2 to $3 million. The pair have already made seven investments so far, including DeepScribe, Arcade, QuotaPath and Sales Impact Academy.