IVCA Interviews MATH Venture Partners

This article was originally published on IVCA.

The expansion of the IVCA continues, with two new firms joining the association. MATH Venture Partners is an early to growth-stage fund managed by a seasoned team of hands-on investors and operators. Romar Capital Partners represents the direct, early stage investment, and are focused on actively partnering with entrepreneurs in rapidly growing, Chicago-area based B2B technology companies.
 
Both firms were recently asked a number of pertinent questions about coming into the association, which included background information about their enterprises.
 
New Member: MATH Venture Partners
Representative: Mark Achler, Managing Director
 
IVCA: What is a brief history and background of MATH Venture Partners?
 
Matt Achler: MATH Venture Partners was started by two industry veterans and colleagues, myself and Troy Henikoff. We met in 2000, when Troy was the CEO of SurePayroll, and I became the lead investor in that business when I was a partner at Kettle Partners. SurePayroll went on to become a successful company, and we became fast friends.
 
Six years ago, Troy was one of the co-founders of Excelerate Labs, which went on to become Techstars Chicago in 2013 [both are entrepreneur mentoring programs]. Combining Troy's work with Techstars with our teaching of Entrepreneurship at Northwestern’s Kellogg School of Management, plus many years of mentoring early stage startups, we’ve had access to an amazing amount of deal flow through vetted companies. It was time to take that ‘unfair information advantage’ and put it to work.
 
IVCA: Why did the firm decide to join the Illinois Venture Capital Association?
 
Achler: We have long been huge fans of the important work that the IVCA does, and how it represents the interests of its members within the greater Illinois and Chicago business and government communities.
 
IVCA: In launching MATH Venture Partners, the emphasis has been on 'customer acquisition' for start-ups. What are the common obstacles in that area that you help them overcome?
 
Achler: Most entrepreneurs think from their own point of view – they usually come to us describing product features. We like to politely stop them and ask them to think from their customer’s point of view, and describe the urgent problem they are solving. Then we work with them to identify the most effective ways – either directly or through distribution channels and partners – to reach their customers and scale their business.
 
IVCA: One of your focuses are on 'better mousetrap' companies – those who take an existing product or service and create something better. How do these types of innovations change the marketplace or customer behavior once they are established in the marketplace?
 
Achler: We love invention, but the simple truth is there is nothing harder than to try and train a customer to do a new behavior. As a new and relatively small fund, our job is to focus on those companies we can help scale and grow without the friction of having to educate their customers to do a new behavior. Let us give you two very relevant examples from our backgrounds...
 
At SurePayroll, we didn’t have to convince our eventual customers, when they were processing their payrolls, to withhold taxes and deposit them with the government – because if they didn’t they were breaking the law. We were just the first guys to put it on the internet and make it simpler, cheaper and faster to manage.
 
I was previously the Head of Innovation at Redbox DVD rental services. Our customers had been renting movies from Blockbuster for the past 20 years. We didn’t have to teach the concept of renting movies. We used kiosks, combined with supply chain and logistics, to bring the price point down and make it more convenient.
 
IVCA: What does MATH Venture Partners hope to achieve in their interaction with the IVCA?
 
Achler: We are looking to the IVCA for industry knowledge, leadership and to help represent our needs and interests with both the State and City governments.
 
New Member: Romar Capital
Representative: Scott Wald, Partner
 
IVCA: What is a brief history and background of Romar Capital?
 
Scott Wald: Romar Capital Partners represents the direct, early stage technology investment activities of the Wald and Colis family offices. I met George Colis nearly 20 years ago in YPO [Young President’s Organization] nearly 20 years ago, and together we founded SurePayroll in 1999. Both of us have been involved as operators, investors and board members in numerous business ventures over our careers across the technology, banking and insurance sectors – all but one of which have been headquartered in the Chicagoland area. Together, we’ve formed Romar Capital Partners to further pursue opportunities to invest our time, expertise and capital in contributing to the growth and success of a select number of early stage technology companies here in our hometown.  
 
IVCA: Why did the firm decide to join the Illinois Venture Capital Association?
 
Wald: With the formation of Romar Capital Partners, we are focused on continuing our track record of investing in and backing Illinois-based businesses. It is here in Illinois that we’ve built our careers, raised our families and formed lasting professional networks.
 
When we first started our technology-related ventures in Chicago years ago, the Venture Capital community was much less organized and formalized than it is today, but this ecosystem has come a long way in recent years, and the IVCA has been a leader in contributing to those efforts. We were honored when Flexera – the successor company to InstallShield Software – and SurePayroll were recognized as Portfolio Companies of the Year by the IVCA in 2012, and we are looking forward to now engaging in this community as investor members of the IVCA.
 
IVCA: How do you feel you best separate yourself from similar firms specializing in investments?
 
Wald: Romar Capital Partners is differentiated from other VC firms in that we are solely investing our own personal capital in the companies we back. As we intend to build a highly selective portfolio of direct investments over time we will be able to maintain our primary focus on actively partnering with entrepreneurs on an ongoing basis at both strategic and tactical levels. Our complementary skills sets enable our ability to make an impact across corporate functions.
 
We like to be supportive and engaged coaches, working closely with company leadership teams to help drive outsized outcomes for their businesses. We’re really operators at heart – and as we’ve ‘seen the movie’ of taking a rapidly growing company from the very early stages to a successful exit more than seven times over, we truly know the entrepreneur’s mindset. Our goal is to get involved early on in the company lifecycle and to scale our commitment with the company as it grows.
 
IVCA: Since so many of your past successes have been in technology solutions for businesses, where do you see the future of those types of solutions in the direction that technology is evolving?
 
Wald: Our historical operational and investment focus has been on B2B technology companies that are differentiated by their software. The Romar Capital Partners investment strategy is to continue maintain this focus on what we know and understand, as we back entrepreneurs.
 
What interests us and best aligns with our skills is partnering with technology solutions that take the friction out of a business process. At the core, that’s what really great B2B technologies do – take something that used to be more manual, more time-consuming, more resource intensive, and to boil it all down to a really elegant solution enabled by software. That’s what gets us excited, and we continue to see great opportunities to leverage software to remove friction and create value.
 
IVCA: What does Romar Capital Partners hope to achieve in their interaction with the IVCA?
 
Wald: We are enthusiastic about continuing and enhancing our involvement with the local technology investment community via our IVCA affiliation. We believe that the IVCA network will help deepen our connections to the landscape of growing early stage companies and engender further collaboration with fellow local early stage investors. We see involvement with the IVCA as an important element of our strategy to back Illinois-based technology companies.