“Doubling Down” is a new series where we hear from top B2B SaaS investors on their most recent activities and takes on the current market. We had a great one last time with Lucy Deland, Co-founder & General Partner at Inspired Capital. Check that out here.
This week we’re focusing on Luci Fonseca, Partner at Base10 Partners !
#1. What’s your most recent disclosed investment? Why did you do the deal?
We recently led a $50M series B investment in Todyl, which is a modular cybersecurity platform for small and medium businesses. Todyl is on a mission to offer comprehensive security in a single pane of glass to empower IT professionals with the tools, insights, and automation needed to defend against constantly evolving cyber threats.
Our thesis here is that there is a growing need for cybersecurity offerings for the SMB, the best way to deliver that offering is via managed service providers, and winning companies will take a platform approach to building products and features that are at parity to what enterprises have access to. We got really excited about the vision that CEO John Nellen has for the business and I believe Todyl’s core modules will see a rising tide as they target users with greater security posture maturity.
#2. What’s your sweet spot for investing — check size, stage, type of deal? And how big is your current fund?
At Base10, I lead investing for our growth stage fund that invests $20-60M in market leaders primarily in B through D rounds, though we can invest up to pre-IPO. We have a total of $1.8B under management across the firm, and we are currently investing out of an active $460M growth fund. We are a deeply research-driven firm and invest in what we call ‘automation for the real economy.’ I spend a lot of time researching software trends in vertical software, compliance, and AI. We also have an early-stage fund that invests in Seed and Series A across the same research areas.
#3. What’s the #1 bit of advice you’d give to SaaS founders today?
I feel pretty lucky to have the opportunity to back the brilliant folks running the startups in my circle, especially when the market throws curveballs left and right. I don’t have all the answers – and no investors do. These founders are in the thick of it every day, way closer to their businesses than I could ever be. And I bet they’re hearing all sorts of advice, some of it even clashing, from different investors.
Putting myself in their shoes, if I had to boil down my advice, it’d be this: figure out the one thing that your company absolutely needs to nail above everything else. This is the thing you can’t afford to drop, no matter what. It sounds simple, but when you’re running a startup, it feels like everything is top priority. But, usually, it all comes down to one big thing. Once you’ve got that figured out, make sure your full team is 100% focused on driving towards that. And that means everyone, board members and investors included, should have action items that you hold them accountable to that helps drive towards making that one thing happen. That, and give your investors more homework.
#4. What’s your pulse check on the venture markets right now, today?
Venture growth markets have been challenging in the past two years, but we are starting to see some real deal and investment velocity among pretty impressive businesses. It’s not lost on me that many great companies have been started in previous downturns and this downturn will be no different. I’m impressed by the number of businesses that we are seeing grow to $10-15M in ARR in a really capital-efficient manner and driving real efficiency through scale. Of course, this is a double-edged sword because we want companies to be efficient but the less capital companies need as they scale, the less likely they are to raise from investors.
Ultimately, this creates a more competitive dynamic for investors who will have to demonstrate their value and prove they’re worthy of a seat at the table for the best companies. Investors with true differentiation are going to be the ones to win.
#5. What’s different about your fund / how you invest and support founders?
Base10 is a research-driven venture capital firm investing in technology companies automating the largest sectors of the Real Economy and founders who believe purpose is key to profits. These founders are solving problems for the 99%. The reason why I am at Base10 is that our vision is to fundamentally change how people see purpose in the venture model, through multiple layers. Our funds work with underfunded colleges and universities to create pathways for students with underrepresented backgrounds in the tech industry.
We donate 50% of select investments to these institutions through our Advancement Initiative and create scholarships in the names of the businesses we invest in (e.g., the Notion Scholarship, the Figma Scholarship, the Nubank Scholarship). We know the incredible power of technology and venture to create remarkable wealth and adding purpose to the cap table of today’s most innovative businesses can help fund the education of the next generation of great founders. We want the next great company like Notion to be started by someone who benefitted from our investment in Notion.
#6. What’s an “exit” you’re particularly proud of?
Nubank—we are so proud of David Velez for the incredible business he has built and for the deeply purpose-driven manner in which he has built the business. We were lucky enough to invest a few rounds before the business went public and today it is a $57B public company. Not only that, I personally deeply admire the company’s commitment to financial inclusion, to impact, and to equity.
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Luci is a Partner at Base10 and joined the firm in 2021 to help launch and lead the Advancement Initiative, Base10’s program that aims to donate 50% of Base10’s profit from select investments to fund the next generation of tech entrepreneurs.
Before Base10, Luci came from McKinsey & Company, where she helped establish the firm’s Institute for Black Economic Mobility. As a part of her work, she helped an industry consortium develop billions of dollars in corporate commitments to diversity, including supporting black-owned businesses and banks, driving long-term financial security for communities of color. She also worked on projects to increase the number of women in venture capital, entrepreneurship, and artificial intelligence, and helped start and build the West Coast fintech practice. Prior to McKinsey, she developed the strategy for Salesforce Venture’s $50M impact fund, served as an Economic Advisor in the Office of the Prime Minister of Cabo Verde, and started as an investment banker at Goldman Sachs. She is an active angel investor and advocate for more women angels.
Luci holds an MBA and a Certificate in Public management and Social Innovation from Stanford Graduate School of Business and a BA from Yale University.
