When Silicon Valley venture capital (VC) firm Renegade Partners invests in a startup, the partnership goes well beyond funding.
Renegade Partners’ mission is to identify and invest in companies about to go through a critical inflection point and support them to become outliers. That critical inflection point happens when startups enter what Renegade Partners’ leaders describe as the “supercritical” stage.
This stage “is like the teenage years,” says Renata Quintini, Co-Founder and Managing Director of Renegade Partners. “You’ve found your product-market fit, you know what you're selling, you know who you're selling it to, you know how much you want to charge, and you’re all about supercharging and accelerating your business.”
First Republic Bank recently spoke with Renata Quintini and Roseanne Wincek, Co-Founder and Managing Director, on how Renegade Partners helps startups navigate this fast-moving phase.
Photo: Renata Quintini (on left) and Roseanne Wincek (on right). Image provided by Renegade Partners.
This interview has been edited and condensed.
Renata Quintini: Roseanne and I have known each other — as collaborators and friends — for over a decade. In 2018 we were at dinner when somebody asked, “What would you do if you had your own venture firm?” We completed each other's sentences on big, important stuff that's usually controversial.
Our outlooks centered around building a VC firm that acted like a company — across everything from incentives to the types of people we hire to making the technology. Even though VCs back innovative companies that keep inventing the future, the VC model has been the same for decades — that was nonsensical to both of us.
Roseanne Wincek: We both thought, what if we created a firm that looked like a company we'd want to invest in? We would never invest in a company where team members like executives could never leave, for example, but that’s how the average venture firm is set up.
It's strange to us because if you think about it, there's this recipe for Silicon Valley success. As VCs, we tell our companies to do certain things when they set up their teams, invest their dollars, compensate people and so on. We know the recipe is effective, but we don't do it in our own business. And that felt like a missed opportunity because it's so effective, especially if you're starting at zero and going against big incumbents.
Renata Quintini: Something Roseanne and I asked ourselves a lot about before starting Renegade Partners is why does the world need another venture capital firm? The last time a big crop of new VC firms emerged was around 2007, around the notion of things getting 10 times cheaper to start up thanks to cloud computing, mobile computing and global distribution channels coming in all at once.
Startups could be in business with half a million dollars, or a million dollars, but it meant they had less time and more competition. If you go back to the origins of the firms that were started back then — like First Round, Andreessen Horowitz, Floodgate and others — they all had something that helped founders either accelerate the way they built products or the way they made revenues. They were giving something to startups that were significant accelerants.
When you fast forward to what's happened to technology companies in the past 10 to 15 years, the big tectonic shift has been around team growth and organizational development. Companies are growing bigger, faster, and earlier than before, [at rates] two or three times faster than 10 years ago. That creates a bunch of complexity that is exponential, and this is what we help companies solve.
Roseanne Wincek: As a founder, you can hire your whole team in the very early days. But there's a point where that taps out — either you don't have a strong network in a given area, or you want to build a team that includes people of more diverse backgrounds, with more diverse experiences, that you can connect with. You’re also busy and don't have the bandwidth to hire, but how do you ensure your new hires are as good as the hires you would make yourself? How do you codify that decision-making and make it repeatable across the organization?
You have to go from doing things one-off to doing the same things repeatedly. Every business has to go through that to scale and be successful. It's not that companies are struggling at this stage, it's more that this is a normal phase of life… dealing with team dynamics and how to build systems or fix systems or forecast the business more effectively. These skills are more important than ever, which makes us at Renegade Partners more excited than ever.
Renata Quintini: It’s about helping companies accelerate. It’s never about doing something that is core, or something we feel is an essential muscle for them. Instead, it's this idea of equipping them with something we know they're going to need and want, but maybe they're too young to be effective at it.
The first area where we go deep is around people. The notion of human resources has gone from a function of compliance, paperwork, and badges into something fundamental. People are your most strategic asset, and it's all about execution these days. HR supports achieving strategic goals, and it's not just culture — it’s the type of people you bring in, how you train them, how you unleash them, how you compensate them and so on.
That's our philosophy for every area. We bring in industry experts — people that have done those jobs before, at companies our entrepreneurs respect — as operators to support our founders day-to-day because they've seen around a couple of corners. These executives are full-time to Renegade and work on goals co-developed with the company. We call it “bespoke at scale.” And on top of that is Roseanne and me, the investment team in the boardroom, with different cadences and investing market expertise.
Renata Quintini: They’re all growing in headcount. There hasn't been a single company stagnant on the hiring front since we invested in growing and supporting their people. Some of our portfolios started at 17 or 20 people — now they’re at 65-plus employees. There's one that we came in at 100 employees, and now they’re at 500. We’ve also had one company exit [since our first close of Fund One on March 13th, 2020]: Rewire was acquired by Remitly, a public company, earlier this year.
We also have some companies that have gone through organizational evolutions, and along with them come conversations around titles and compensation. We've been side-by-side with our portfolio companies figuring out how the org chart should look, who reports to who, what various roles do, and what the market is for certain types of compensation. Last year, in particular, every single company in the portfolio talked about compensation and benefits.
Roseanne Wincek: Many of our companies have gone through RIFs (reductions in force) this year — as is common across technology. That's a place where we've been very involved. RIFs are never fun, but there are good ways and bad ways to do them — and frankly, it's important to do them well not only for the people who leave, but even more for those who stay. This is especially true now when teams have to do more with less because there are fewer people around to get the same amount and more done. So it’s critical for leaders to set teams up for success after going through challenging transitions.
For a lot of companies, this time is going to be useful. There was unnatural pressure to grow too fast last year. And there are natural limits to these things; things end up slipping if you're moving at crazy, breakneck speed all the time, making this a time to reset and reprioritize. Many companies were doing a lot of adjacencies, that weren't necessarily valuable, to grow at all costs. Now the conversation we're having with many of our companies is about getting back to basics.
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