1Mby1M Virtual Accelerator Investor Forum: With Cindy Padnos of Illuminate Ventures (Part 2)

Sramana Mitra: Let’s flip that question around. Now that you have been in this business for a while and you have an investment thesis, what are you looking for? Can you pinpoint where do you want to invest in? What kind of industry trends and segments of the B2B space are of particular interest to you?

Cindy Padnos: We tend to invest in companies that are leveraging all of the data that is being collected today. They take these vast amounts of data but the vast amount of data are collected in our SaaS business applications. They mind that data. They do incredible things with it.

Those are companies we’re typically looking for. They are leveraging machine learning and other AI-related techniques to build solutions that answer business problems that frankly in some case couldn’t be answered at all or might have taken a huge number of man hours of effort.

One of our more recent investments is a company called Nitrio. That company captures all of the sales data which includes all of the communication that’s going on between a sales rep and their customer. From that whether it be email, phone calls, or demo, they can extract very interesting insights.

Insights have to do with which sales are more likely to close, which questions are asked by customers more frequently, which sales reps are best at answering which type of questions. Those are questions that I know because I’ve been a VP of Sales. We used to spend hours and hours scanning though people’s emails together and communications with customers trying to figure out what was going on. Now, it can be done in a completely automated way. It’s pretty exciting.

Sramana Mitra: AI is a big trend it seems for everybody. We also hear cyber security in the B2B universe is a big trend. Is that something you invest in?

Cindy Padnos: Yes. We’re working with a company right now that we’re likely to invest in that is in that B2B cyber security space. Their focus is on the front end of the process though, meaning what the industry likes to call development operations security. They are in the business of trying to prevent intrusions by identifying gaps and flaws long before the product is released. It’s the holy grail. If you can get a product fool-proof before it goes out, that’s obviously a whole lot better than what we experienced recently.

Sramana Mitra: Do you want to cite any other examples of investments in your current portfolio? You’ve already done a few of these. Give us some insight about how you decide on what to invest in. What are the criteria? How do you parse your deal flow?

Cindy Padnos: I’d love to. One of them is an example that may sound like something a seed stage wouldn’t do. It’s a very interesting company. They’re located in New York. The name of the company is CafeX Communications. We were introduced to them by one of our advisory council members. What they did at the time we invested was a call center platform that was WebRTC-based.

The reason why we wouldn’t possibly invest is because they were a spin out. They were a spinning out a very deep platform that had been built within a services business. That’s a hard thing to do but we had a lot of faith in the founder. We talked to many of their prospective customers. The company spun out with 30 employees, IP, and a real platform already built. Their first year in business, they had over $3 million in revenue.

How did we decide? A whole variety of things. I have a background, having been VP of Marketing of a company that’s in the call center community. We knew the customer set and the business problem pretty well. It was referred to us by someone we knew and trusted who was also investing in the company. It was a founder who had built successful businesses before with an extremely credible and powerful team. It was based on, at that time, new technology. You add all that up. It was very much a winning equation.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Cindy Padnos of Illuminate Ventures
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