During the pandemic, CreativeCo Capital made numerous investments and many in 2021. Having launched the company in April 2020, Director Ashley Gautreaux says the first fund was $10 million and made 17 investments — a pace of about three deals per quarter.
“What it comes down to is we know exactly what we're looking for and our focus shows in investments that we’ve made to date,” Gautreaux says.
CreativeCo Capital is focused on business to business software companies across the U.S. primarily at seed stage. It wants to see annual growth over 100 percent, strong average contract values and a team that's driven to build a big business. One aspect of the firm’s success so far is because they don’t rely on inbound deal flow.
“We are really aggressive using data and reaching out to companies to introduce ourselves,” Gautreaux says. “I would say over 70 percent of our investments were a result of the outreach, which is unique at this stage of investment. We also have partnerships with other same-stage or downstream investment funds. So, I think what it comes down to when we have strong conviction we are aggressive to invest.”
The firm has been able to add dynamic companies to its portfolio, a few of which have gotten multiple rounds of capital. The portfolio's growth rate is over 150 percent with eight companies going on to raise follow-on rounds with an average markup of 2.5x in under a year.
“What's happening is in the market, and especially for the companies in our portfolios that have high growth rates, such as over 200 percent year-over-year growth, we are seeing next rounds at a much faster pace with a strong valuation jump,” she says. “So, for example, what that means, we invested in a company at a $12 million post valuation as a seed extension round and only four months later they raised a Series A rounds at a $51 million post valuation. This was all due to their high growth and where they're headed.”
Gautreaux spoke at last year’s Charlotte Smart Business Dealmakers Conference about the progress her firm has been able to make in a short time and why. Hit play to catch the full conversation.