Foster Those Relationships

Foster Those Relationships

To our Valued Investors:

The fascinating journey that transformed Iron Edge VC from little more than a concept about revolutionizing pre-IPO investment into a successful international enterprise serving hundreds of high-net-worth clients has brought with it many lessons. Most prominent among those lessons is that a business can only thrive if the relationships surrounding it are strong and well-maintained. We are certainly not unique in this regard; this applies to nearly every kind of commerce in existence. For our part, the importance of taking good care of our Limited Partners — in other words you, the investors — is obvious. Beyond that, it is crucial that we maintain clear and effective lines of communication with a wide variety of other entities. Family office managers and other VC professionals are valuable resources in providing research insights, and they help us maintain robust trading activity on both sides of the deal. Various brokers of private company shares help us to land prized cap table positions. As our reputation has grown to that of a reliable source of venture capital, we find ourselves connecting with the founders and other leaders of businesses that have exceptional growth potential. It is these relationships that allow us, and by extension our clients, to invest in the best facets of the future at the most attractive valuations possible. Indeed, the many different kinds of relationships we maintain are our lifeblood. Without them, we have nothing.

In business, how we as a society “network” has come a long way. An individual seeking to establish a rapport with somebody employed at Acme Widgets, Inc. only needs to visit LinkedIn, type “Acme Widgets” into the search box, and then figure out which friends or friends-of-friends might be able to deliver the introduction. LinkedIn, though, has only existed for about twenty years. How were these things done before that? It certainly involved a great deal of “heavy lifting”, and it wasn’t a fraction as effective. Imagine what it would be like today if your best shot at building a healthy list of contacts came from blindly trolling for them at business conventions and school alumni events.

Franklin D. Roosevelt’s campaign manager, a man called James Farley, developed the “Farley File” to help Roosevelt with his campaigning activities. The Farley File was simply a collection of personal and political facts about people whom Roosevelt had met or, more important, planned to meet. Routinely, FDR’s audiences were greatly impressed by the candidate’s gift of “recall”, not knowing that the skill was really as simple as Roosevelt’s attention to Farley’s data. This is a wonderful example of one of the earliest instances of Customer Relationship Management (CRM) and it clearly demonstrates the effectiveness of putting in an effort to add meaning to personal interactions. The idea would eventually blossom into a huge industry, gaining considerable momentum in the early 1990s when Tom Siebel of Siebel Systems created Siebel Customer Relationship Management. New CRM providers quickly began to spring up, and advancements in technology would fuel the industry’s evolution over the years. Alongside Siebel, companies like SAP, Salesforce.com, and Oracle rolled out innovations like app-based CRM, cloud-hosted databases, and the leveraging of social media to maximize a company’s reach.

Founded in 2012, Introhive Services, Inc. has been a force in improving CRM even further. It is the fastest-growing AI-powered sales and relationship intelligence platform, with the single largest revenue acceleration deployment in the world. Based in Fredericton, New Brunswick, Introhive’s mission is simply stated as “Empowering peak performance in revenue teams”. Recognizing that businesses achieve true revenue acceleration when sales, operations, marketing, IT, administration, and customer success teams are all aligned and working towards a shared goal, Introhive has built a platform that helps its customers to capture and retain strategic relationships, thereby boosting revenue. Introhive automates mundane data entry tasks, freeing up many valuable work hours over any given month. They cleanse the data, keeping contacts accurate and up to date. It is estimated that up to 70% of a typical contact list will have outdated information at the end of a 12-month period due to job changes, geographical transfers, and departmental shifts, and Introhive’s automatic updates eliminate the risk of this causing broken communications. They identify and reveal new business lines, and they guide clients on how to make the best use of the data that comes out of the CRM.

Don’t be tempted to dismiss this as some slick corporate-speak designed to sound sophisticated. Introhive’s product is that simple; they increase their customers’ sales numbers. Among their client base are names like Hitachi Solutions, Manpower, and PricewaterhouseCoopers. The massive size of these companies helps to illuminate exactly how a cutting-edge CRM system makes a huge difference in their bottom lines. Manpower has 2700 offices in 80 countries and territories. PwC employs nearly 300,000 people. Now, imagine that you work for one of these companies, and you are preparing for a meeting with a prospect who could potentially direct a lot of revenue-generating business your way. Among your hundreds of thousands of fellow employees, it’s a near certainty that a handful of them have an existing relationship with that contact. Introhive scours emails, telephone contacts, and other resources to identify who within your own organization can best assist you in preparing for the meeting. After the meeting has concluded, of course, the platform monitors and guides follow-up communications. Put in the simplest terms, Introhive extensively “automates the mundane” and greatly augments the appearance of professionalism.

It should come as no surprise that a company that has a secret formula for cranking up its clients’ income figures gets to enjoy some of its own revenue glory. Deloitte’s Technology Fast 500 list is the annual ranking of North America’s 500 companies that have had the most impressive growth rates in the fields of technology, media, telecommunications, life sciences, fintech, and energy technologies over a three-year period. Notable companies that made the 2021 roster include Snowflake, Square, Etsy, Discord, Attentive Mobile, and, naturally, Introhive. It was Introhive’s second consecutive year of receiving the honor, courtesy of a commanding revenue growth of 473% from 2017 to 2020. This is precisely the kind of growth narrative that we at Iron Edge VC find to be truly irresistible. Introhive is a relatively young company that is beautifully hitting its stride. It is an AI-powered Software-as-a-Service (SaaS) platform that has an exhaustively proven track record of effectiveness. In 2021, some of our best investments (like NextRoll and Amplitude) neatly fit into the same profile. It is a corporate-services subsector that we believe is just getting started. In our view, Introhive is a great pre-IPO find because its valuation hasn’t been inflated as a result of high name recognition. At the same time, as a private company, Introhive is not exposed to the extreme selling pressures that have recently confronted the public equities markets. As we noted in another communication last month (The Beneficial Disconnect, January 26, 2022), private equity investments like the ones we provide can offer some level of shelter and stability — the “upside” of illiquidity — during the broader markets’ more turbulent moments.

Constellation Research, a Silicon Valley tech research and advisory firm, last week named Introhive on its “Constellation ShortList” for sales performance management. The distinction points to Introhive’s excellence and innovation in CRM and relationship intelligence. As such accolades become more frequent, Introhive’s sphere of influence is likely to expand. When that happens, of course, revenue numbers should continue to multiply. A potentially bright future like this might prompt any shrewd investor to look into scooping up a few Introhive shares in their Morgan Stanley brokerage account, but that simply cannot be done at the moment. Introhive, you see, is a private company, and as such its shares cannot be bought on any public stock exchange. Iron Edge VC can, nonetheless, provide you with access to our Fund that has ownership interests in this company that applies cutting-edge AI and machine learning to the very business of creating revenue through improved relationship management. If you would like to learn more, or if you know anybody else who would, please don’t hesitate to contact us by clicking “Get in Touch” below.

If you have enjoyed this article, visit the Iron Edge Blog for past updates on our pre-IPO opportunities and for general commentary on investment in the private marketplace.

As always, shares of Iron Edge investment funds are available on a first come, first served basis.

All the Best,

Paul Maguire

Founder & Managing Partner

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Paul Maguire

Founder And Managing Partner