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NVCA Member Spotlight: Catalyst Investors



Tell us about your firm. What makes it different?

Catalyst Investors is a New York based growth equity firm investing in B2B software and tech-enabled services businesses. Our founding partners have worked together since the mid-1990s and we have invested in more than 50 portfolio companies and completed 100+ consolidating acquisitions. Since our first fund in 2000, we’ve been driven by the same mission statement – we seek to earn superior returns by helping entrepreneurs build great growth companies.

Research is at the core of what we do. We employ a research-driven approach to develop investment theses in high-growth industry sectors. This allows us to build a depth of knowledge as sector experts and form key relationships with leading companies. It is important for us to be thought leaders, so we make our research publicly available on our website. Once a company joins our portfolio, the management team gets access not only to the partner-led team, but also to the experience and expertise of our Catalyst Advisory Group comprised of industry veteran executives and entrepreneurs.

 

Where did your firm’s name come from?

We seek to be a catalyst for growth. We’ve focused on helping our companies scale all aspects of their business through the growth stage of their life cycle.

 

What defines your portfolio?

Our companies are leaders, or have the potential to be leaders, in their respective sectors. We partner with talented and driven management teams whose companies have strong, persistent growth metrics, proven product/market fit, statistical significance in their customer base and a large total addressable market. Such companies use our capital to “step on the gas” and continue this growth. We invest in industries that are experiencing above-average growth relative to the broader market where technology is changing fundamental business models.

 

How is the firm different today than when you first started?

Catalyst’s initial focus was on media, telecommunications, and internet-focused companies, which continued and built upon the experience of the firm’s founders. Many members of our team began their careers as lenders or investment bankers to the media and telecommunications industries at leading financial institutions.

From the beginning, we have used our expertise to source and evaluate sectors with attractive business models as they enter their stage of high growth. This focus on business models rather than specific sectors has allowed us to move beyond a focus on media and telecommunications, and was the beginning of our expansion into new sectors such as SaaS (2000), cellular towers (2002), data centers and hosting (2006), marketing technology (2011), healthcare IT (2014), and food technology (2016), among others.

 

Why is your firm a part of NVCA?

Catalyst is an enthusiastic NVCA member. I just stepped off of the board and the Executive Committee as of May 2019 and previously was Chair of the Growth Equity Committee. As the voice of the venture capital community within Washington, the NVCA is an incredibly important group that supports key regulatory reforms for entrepreneurs and investors alike across technological innovation, capital formation as well as regulatory and economic policy.

 

Tell us about the current VC landscape in your geography/region.

While we’re based in New York, we invest in the U.S., Canada and selectively in Europe. We see an increasing percentage of companies from New York as it continues to develop as the second largest VC hub, but we also are focused on technology centers around the country. Most recently, Catalyst has worked with portfolio companies headquartered in Massachusetts, San Diego, Denver and Chicago.

For exits, there has been an increased interest among larger growth equity and middle market PE firms in our portfolio over the past several years.

 

What’s ahead for your firm in 2019?

We are excited about the current opportunity set and continue to focus on making investments in our core areas of interest. As a firm, we remain focused on building a collegial, transparent culture, finding strong talent, and learning and growing as investment professionals so we can earn superior returns for both our companies and our Limited Partners.

 

Describe your firm’s culture in 5 words or less.

We’ve built a culture around 5 core values that define who we are and what we do: growth, collaboration, courage, passion and impact.

  • Growth: we are dedicated to constant improvement – we learn from our experiences, evolve with our industries and adapt to our environments
  • Collaboration: we believe that success is rooted in teamwork – the best ideas come from collective, open dialogue
  • Courage: we stick to our principles, take the high road and focus on the long term interests of our management teams, investors and employees
  • Passion: we are driven by the love of what we do and the satisfaction created by the successes that are earned, shared and celebrated
  • Impact: we are catalysts in more than the name – we are committed to making a positive difference
Blog

Casting the Movie: How Catalyst Approaches Independent Board Member Recruiting

Catalyst almost always takes a board seat at our portfolio companies to allow for continued involvement and guidance after we invest. We leverage our 20+ years of growth equity experience to provide our companies’ leadership with strategic guidance and to oversee corporate governance. We have “seen the movie” many times before –– that is, we know the growing pains and opportunities companies experience as they scale from $10 million to $50 million in revenue because we have invested in more than 60 companies at that stage.

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