I’ve always been fascinated by the amount of capital floating around in this country, just looking for a home. And, it’s not all in the big urban centers, like New York, Washington, Chicago and LA. Before they passed away, my parents owned a beachfront condo on a little island outside of Naples, Florida. Their neighbors in a pretty price market weren’t hedge fund managers, sports stars or entertainment leaders. The license plates on their cars were from Indiana, Wisconsin, Michigan and Ohio. One of my parents’ neighbors owned some shopping plazas in the Carolinas, another was an Amway dealer in Michigan and a third manufactured something mundane in Muncie, Indiana. My Dad sold wooden pallets in Northeastern Ohio.
I often think of all the cash that flowed into that one Florida development when I see the amount of money seeding startups in the supply chain community. It’s a remarkable time in our industry.
Cowboy Ventures is one of the firms making bets in our space. Back in June, I had a chance to talk to Amanda Robson, a principal at Cowboy Ventures, after the firm was an investor in SVT Robotics, one of the startups I’ve featured in this blog. Cowboy Ventures nurtures seed-stage startups to get them ready for rapid growth. Robson and I spoke about what she’s looking for before making an investment in a new company, something she called “the art of the seed.”
Robson joined Cowboy Ventures about 10 months ago, and has been in the “venture ecosystem” for four years. Prior to Cowboy, she spent three years at Norwest Venture Partners, where she focused on investments in applied AI, data and infrastructure software. There, she dipped her toes into the the automation and supply chain world, investing in 6 River Systems, which has since been acquired by Shopify for $450 million.
So, what is the art of seed financing? Robson said it’s about more than just putting cash into a company. It’s bringing focus to the venture. “The question we ask is: How do we make companies more successful at this early stage?” she said. “What milestones do they need to hit? We’re involved in everything from company culture to hiring diverse teams to establishing internal processes and setting up board meetings.“
Perhaps most importantly, Cowboy Ventures works with founders it thinks can take their company to that Series A or B funding. “We look for founders who we believe have the ability to productize what they’re building,” she said. “In order to get to a Series A round, which could be worth $7-to-15 million, they have to hit milestones at certain points.” Cowboy Ventures provides the guidance to identify and meet those milestones.
Where is Cowboy Ventures looking for investments, inside or outside the supply chain? “At a high level, we’re looking for potentially massive markets, and we’re looking for companies going after the top five pain points experienced by customers that can grow to a billion-dollar market,” she says. “In the warehouse, for instance, we want to know what areas can be automated that can provide value, a high ROI and a business case, whether that’s through increased output or decreased cost.”
Last, I asked Robson what she’s keeping an eye on. Her short answer was data availability – data is the new oil, after all. But she also echoed the platform theme that I’ve been writing about. “There are so many disparate systems that have data, whether that’s in automation systems, inventory systems, transportation and employees,” she said. “That makes it hard to automate. We think all of those different data silos will come together to make the supply chain visible. And I think that’s something we can help with at Cowboy.”
About the Author
Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.