It's clear that the potential value that celebrity investors can bring to consumer companies is more than just writing checks, it's marketing and promotion. But when it comes to supporting B2B startups, the value is less clear. Alex Paul and Drew Taggart, also known as The Chainsmokers, believe their VC fund, Mantis VC, can bring added value that traditional VC cannot.
At TechCrunch Disrupt 2024, along with one of its founders, Dan Lorenc, co-founder and CEO of cybersecurity startup Chainguard, Paul spoke about the group's first foray into B2B investing. said he was tired of feeling like QVC, a startup working with consumer companies. I just wanted to work with them for promotion.
Even though the two had little experience in B2B types of businesses, their interest in B2B grew because of the strong market opportunities in the field.
“It felt like an opportunity in the market to kind of stand out and maybe provide a different perspective and a different kind of value to those types of companies,” Paul said. “The way we model our strategy and fund is to be like the Robin to everyone’s Batman, providing a different level of support, perspective and connection that perhaps traditional funds don’t focus on as much.”
Taggart added that he's not thinking about becoming the next Sequoia, either, because the company already exists and has some value.
“Our goal at Mantis was to find any sneaky way we could get in on these deals and outperform everyone else on the cap table and add value. “We're looking forward to converting and helping us build a brand within that community,” Taggart said.
One area where they think they can help businesses is through networking. Paul said the Chainsmokers have performed private shows for nearly every Fortune 500 company. At the time, they didn't think of it as building a network for investments, but since then they have been able to connect portfolio founders to these companies.
“It worked out really well for us because they are very strong decision-makers or leaders in their respective fields,” Paul added.
Lorenc also supported these statements. He added that they not only helped in introducing them to potential customers, but also in terms of employment.
Lorenz's company once wasn't sure whether it would be able to hire prospective employees because of disagreements over compensation. But they were able to push the candidate over the line when he received a five-minute cameo video talking about why Paul should be involved.
“You don’t want to be a redwood,” Lorenc said. “We already have Sequoia. You invested in us at the same time as Sequoia. Sequoia is great. They have a great platform, a great team, a great network, all of that. But those investments Once you have enough houses, they start to overlap and the profits start to diminish. It's the same network, but the way I describe you is completely different.”
The Chainsmokers hope that the early B2B investments they have made will be taken more seriously in this space and allow them to continue building their portfolio.