Passion for Platforms: 4 Keys to Successful Investing

As an investor at ARTIS Ventures I spend my career looking for the next disruptive technology platform and there is no more satisfying feeling than watching one of those companies come out of stealth with a bang. Last week Bracket Computing did just that and it’s a company with a technology platform that I am proud to be behind. ARTIS Ventures invested $25 million and led the Series B round of funding – the largest investment we have ever made in our 10 years of investing in private technology companies, which has included lead investments in YouTube, Nimble Storage and Practice Fusion. If that’s not an indication of how strongly we believe this will change the public cloud arena, I don’t know what is.

Part of the excitement comes from evaluating a market and envisioning the disruption that will occur when something revolutionary is unleashed. In the case of Bracket, the total addressable market is over $100 billion and we are in the very early innings of the public cloud data center migration secular shift. Bracket has introduced the industry’s first Cloud Virtualization System, which enables enterprises to host their data centers in the public cloud, spanning multiple clouds while inserting computing controls that include security and storage. While experts have said that cloud security concerns are overblown, the more that can be done to assuage the fears, the more secure enterprises will feel about making the shift that will allow them to benefit from public cloud computing.

The decision to invest in Bracket was an easy one – ARTIS Ventures prides ourselves on backing companies that hit a key set of criteria. I would love to hear what you think are criteria for a good investment or how to spot a disruptive tech in the comments. Here are ours:

1. Companies with disruptive technology platforms

Platforms are shaping the way we live. Some of the best technology investments have been platform solutions, including Microsoft Windows, eBay, LinkedIn, YouTube and Facebook – there are many others, but these companies elegantly illustrate the power of having a technology that can scale. Platforms need users, and a dominant platform also needs ease-of-use and to be something that others can step on as well. Think of YouTube as a plank that fit into the Google platform, which is why that acquisition made so much sense.

2. Companies with strong management teams

When companies meet with ARTIS Ventures we evaluate the management team with a critical eye – does this team have the DNA to do this? Do they see the idea for what it is now, but also for what it CAN be (the platform concept) and are they brave enough to do it? Do they have the capability, experience and will power? As an example, Bracket Computing has one of the strongest management teams we have ever seen in the software sector. CEO Tom Gillis, and many of the Bracket executives, worked together for many years at IronPort, which was acquired by Cisco in 2007. Gillis was then appointed as Cisco’s General Manager for three business units, including Network Security, Content Security and Identity Management products. Gillis and his team then went on to found Bracket Computing in stealth mode in 2011 and we knew from his experience he was the right man to lead Bracket to achieve its potential.

3. Companies with enormous total addressable markets

This one is obvious, but it’s critical to estimate how much of the market any company can gain. There are a variety of ways to do this, such as evaluating the competitive landscape or a more encompassing view is to estimate the market size that could be served with a specific product or service. No matter how you look at it, the best investments are in companies that have huge market potential.

4. Companies with the highest caliber partners

While this is open for interpretation in many ways, the key things we evaluate are what kind of customer traction is there already as well as if this is a company we would be happy to make future customer and partner introductions on behalf of – at ARTIS Ventures we pride ourselves on being more than just an investment firm, but rather true partners to the companies we back so they can put a dent in the universe.

Bracket Computing hit all of these criteria out of the park and is poised for great things, so I’d like to extend a huge congratulations to everyone involved on an extremely successful company launch!