The potential value a celebrity investor can bring to a consumer company, beyond just writing a check, is obvious: marketing and promotion. But that value is less clear when it comes to backing B2B startups. Alex Pall and Drew Taggart, also known as the Chainsmokers, think their VC fund Mantis VC can bring a value add traditional VCs can’t.
At TechCrunch Disrupt 2024 alongside one of their founders, Dan Lorenc, the co-founder and CEO of cybersecurity startup Chainguard, Pall said that the group initially got into B2B investing because they got tired of feeling like the QVC of startups working with consumer companies that just wanted to work with them for promotion.
The duo became increasingly interested in B2B due to the strong market opportunities in that space despite not having much experience with those types of businesses.
“It felt like a market opportunity to kind of stand out and maybe provide, you know, a different perspective or different type of value back to those types of companies,” Pall said. “Our strategy and the way we model our fund is to kind of be this like Robin to everyone’s Batman, and kind of provide a different level of support and perspective and connectivity that maybe the traditional fund isn’t so focused on.”
Taggart added that they aren’t looking to be the next Sequoia either, because that firm already exists and comes with a certain level of value.
“Our goal at Mantis was to just get into these deals, outwork every other person on the cap table, figure out whatever scrappy way we could add value, and then in the hopes that our founders would turn around and kind of help us build our brand within that community,” Taggart said.
One area where they think they can help companies is through their network. Pall said that the Chainsmokers have played private shows for pretty much every Fortune 500 company. And while they didn’t think of it as building a network for investing at the time, they have since been able to connect their portfolio founders to these companies.
“It worked out really well for us, because these are, you know, some really powerful decision-makers or leaders in their respective spaces,” Pall added.
Lorenc backed up these statements, too. He added that they’ve not only been helpful in making introductions for him to potential customers but they’ve also been helpful on the hiring front, too.
Lorenc’s company once wasn’t sure they were going to land a prospective employee due to a compensation disagreement. But they were able to get this candidate over the line after he received a five-minute Cameo video of Pall on why he should join.
“You don’t want to be Sequoia,” Lorenc said. “There’s already Sequoia. You invested in us at the same time Sequoia did. Sequoia is great. They have an amazing platform, team, amazing network, all of that. But when you have enough of those investors, it starts to overlap, and you kind of get diminishing returns. It’s the same network, and the way I describe you is a completely different one.”
The Chainsmokers hope that these early B2B investments that they’ve made help them get taken more seriously in the space so they can continue to build out that portfolio.