This July marks the 10 year anniversary of Work-Bench.
From backing some of NYC’s world-class enterprise software companies such as Cockroach Labs, Socure, and Spring Health in their early days, to newer scale-ups like FireHydrant, Arthur, Catalyst, and Authzed, we’ve learned a ton as we’ve grown as a fund and a firm.
In honor of 10 years of Work-Bench, we thought it’d be a good time to reflect on this past decade with 10 lessons learned (an update to our 6 year post). Hopefully some of these lessons can be helpful to you, whether you're a founder, operator, or fund manager:
1. Build to Be Different
In our early days, what set us apart was often perceived as a weakness: “People from corporate IT can’t be enterprise VCs” and “You can’t possibly run an enterprise VC fund in NYC.” The ultimate irony is that our hyperfocus and specialization in enterprise software is now our greatest strength.
Being thesis-driven investors focusing exclusively on Seed-stage enterprise software, sourcing companies through the community we’ve built brick by brick, and supporting founders with the pain they feel the most in building and scaling their GTM, has helped us to win competitive financing rounds and secure LP dollars.
Especially in the crowded venture landscape of generalist Seed funds and multi-stage firms dabbling in Seed nowadays, it’s more important than ever to stand out and embrace what sets you apart, even when it feels hard to otherwise. We’re proud that we’ve stuck to who we are 1000%.
2. There’s No Single Formula For Exceptional Founders
Our job as investors is to back exceptional founders. Sounds easy, yet all investors grapple with the age-old question: how do you pick exceptional founders?
While there may be patterns and themes that emerge, we’ve learned there is no one deterministic formula, which is what keeps the job fun! We’ve had founders come from every background, school, geography, degree, and life experience.
Commonalities that all of our enterprise founders *do* have include:
- Deep domain expertise: “Have they thought about this problem more than anyone else?”
- Grit: “Do they find some sort of joy in grinding on enterprise sales?” Because this sh*t is insanely hard.
- Coachability: “Are they relentless in their vision, but also able to learn and adapt to all the ‘unknown unknowns’ of scaling a startup?”
3. High Ownership and Follow-On Capital Are Key
Given the power law of venture returns, it’s not only important to get meaningful, initial ownership in companies with massive potential outcomes, but also meaningful capital deployed into follow-on rounds of your winners. If you’re not a lead investor with more ball control, you’ll need to figure out how you can earn allocations in competitive follow-on financing rounds, whether you technically have pro rata rights or not. This often requires being extremely resourceful to founders so that they’ll go to bat for you during their next round raise, but also having relationships with downstream investors so that they support your pro rata.
4. Discipline & Consistency Are More Important When It’s Hard
In 2021, funding and valuation mania reached new heights as fellow VC funds chased hype and threw ownership and valuation guidelines out the window. Often this meant larger funds were able to significantly outbid in their term sheets as we stayed disciplined to our ownership targets.
We’d be lying if we said this wasn’t frustrating at times - there were companies we loved in markets we really wanted to invest in, but we had to walk away when they got done at astronomical Seed valuations by other firms.
However, as the market has corrected, it has validated our more measured approach. And we’ve also learned that founders who appreciate Work-Bench as Seed specialists with long-term focus are the best fit for us.
5. Community is a Force Multiplier, But There’s No Shortcuts
If you had told us back in 2013 that the future of the NYC enterprise ecosystem would look like it does today, we would have jumped for joy at the decade’s growth (see our 2022 funding report here).
Between long-time New Yorkers and newer transplants, we’ve found our community to be more vibrant than ever - here, here, here, and here.
Our Work-Bench community is a true force multiplier, as it sends us founders, executives, operators, advisors, and customers through our nonstop calendar of meetups, conferences, happy hours, and dinners.
But looking back, it’s clear: there are no shortcuts to building community. You have to lay the foundation brick by brick, which for us has meant bringing great people together, year over year. Day by day you may not see the output, but over 10 years, this is where we have seen the magic of compounding happen.
6. Know What You’re Good At…And What You’re Not
Value-add can mean many different things to different funds (and memes). But as a Seed-focused VC firm, we’ve always had resource constraints, which has forced us to focus on what we’re great at: insanely deep on all things enterprise GTM with our founders.
We are borderline obsessed with learning from industry pros like a sponge, collating that knowledge, and sharing it with the world. Just as founders should treat enterprise sales as a craft, this “value-add” portfolio support work continues to be an enduring craft for our team.
7. VC Culture Actually Matters
Since the early days, we’ve always prided ourselves on operating more like a startup than a traditional VC fund. In that way, we haven’t changed at all and we hope to hold onto this startup hustle for decades to come.
At our core, we are enterprise software nerds who genuinely love the underdog fight - and that passion ties us together.
But perhaps what’s most special is how much we each bring our “unique” interests and true selves to work. From emo concerts, watching every Fast & Furious movie in the franchise, very aggressive Settlers of Catan trash talking, straight up weird karaoke set lists and so much more, we truly have fun inside and outside of the office, which helps us do more, better, together.
8. Improving Diversity Requires Intentional Effort
Diversity in enterprise software has improved somewhat since over the decade, but it should be no surprise to anyone that there’s still major work to be done.
We’ve put in significant effort to help chip away at the industry’s gender gap with our #Womenterprise Community efforts across our #Womenterprise Report, Women Founders of Enterprise Startups Database, and events, including our recent #Womenterprise Summits.
We know 1) you can’t fix what you don’t measure, and 2) you can’t drive change alone.
9. You Need Empathy In Hard Times
There will always be highs and lows on every startup journey, but these last few years have really taken the cake, with a global pandemic, bank failure, and recent market downturn.
We’ve always believed that being a founder is incredibly hard, which is why we have the greatest respect for our founders as they do Herculean things day in and out: waking up everyday to lead teams, ship product, close sales, fundraise, and more during such unprecedented times.
It’s easy to be an investor when it’s up and to the right, but it’s much harder when it’s not. At the end of the day, being kind, empathetic, and respectful to founders matters more than anything else as an investor.
10. Thoughtful and Steady Wins the Race
Every startup will look and feel challenging/broken/difficult/hard at some point (or at multiple points). The nature of this work is to be able to stomach such rollercoasters and know that the ups and the downs are all part of the journey of company building. Never rest on your laurels for the wins too long, but also never get too down on your losses. This is not only true for startups, but even for us at Work-Bench, from 2013 to now. Every day is a new day. LFG.
We’re deeply grateful for the incredible founders, operators, LPs, and everyone in our community who have supported us on our journey to date - thank you! We are beyond excited about the next decade ahead - more to come 😎
If you’re an early-stage enterprise founder or operator — connect with us directly or check out our events page to get involved with our Work-Bench community.