B Capital Group’s Mike Fernandez on What Founders Need To Know as Their Companies Grow

Minnie Ingersoll
Minnie Ingersoll is a partner at TenOneTen and host of the LA Venture podcast. Prior to TenOneTen, Minnie was the COO and co-founder of $100M+ Shift.com, an online marketplace for used cars. Minnie started her career as an early product manager at Google. Minnie studied Computer Science at Stanford and has an MBA from HBS. She recently moved back to L.A. after 20+ years in the Bay Area and is excited to be a part of the growing tech ecosystem of Southern California. In her space time, Minnie surfs baby waves and raises baby people.
B Capital Group’s Mike Fernandez
Courtesy of Mike Fernandez

On this episode of the LA Venture podcast, the B Capital Group’s Mike Fernandez discusses investing in growth-stage companies and the current state of the later stage private markets.

Fernandez joined B Capital the year it started in 2015. It now has 150 employees and $6.5 billion assets under management. B Capital’s growth team primarily focuses on Series B all the way through pre-IPO funding rounds, writing checks of anywhere from $10M to $100M for growth-stage companies.


A native Angeleno, Fernandez said he went to business school with a hunch that L.A. could become the next big region for tech. His hypothesis, he said, was that the region, which had been on par with the Bay Area in the ‘80s and ‘90s, stumbled during and failed to recover from the dot.com era. Still, he felt there was plenty of opportunity.

“When I was looking around Southern California in the early 2000s, I really wasn't satisfied with the number of interesting companies that I was seeing, or the amount of capital that was available,” he said. “There were a number of industries—including aerospace, including transportation logistics—where Los Angeles should be building the best companies in the country—and really the world.”

Now, Fernandez focuses on horizontal enterprise software—such as cloud infrastructure and cybersecurity—and industrial transportation.

As the market began to turn earlier this year, Fernandez said many companies were still bringing in money. Only recently has he seen a noticeable decrease in the velocity of deals. Still, he said the cybersecurity industry has remained mostly unscathed.

“For those sectors that have more of an infrastructure bent to them, and where you're seeing still top-tier growth rates, top-tier net retention, some of those companies are still able to achieve 15 times forward revenue multiples,” he said.

While there’s plenty of advice for founders building their companies early on, he said there are fewer resources for those looking for insight on how to expand their companies. Understanding that raising funds is more metric-driven than story-driven at the growth stage is key for founders to entice more investors.

In addition to having a strong handle on business metrics, as they grow, companies have to become better at managing risk, and building predictability into their growth profiles, he said. Shifting the risk profile of a business can ensure its longevity.

“Something that I think founders need to appreciate is that the early days of, ‘hey, we're gonna go really fast and we'll just figure it out along the way’ needs to eventually turn into, ‘we're gonna grow by X amount, and this is exactly how we're going to do that’ and be able to communicate that to investors,” he said.

Social and Engagement Editor Andria Moore contributed to this post

Want to hear more of L.A. Venture? Listen on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.

Subscribe to our newsletter to catch every headline.

Cadence

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

Read moreShow less

Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

Read moreShow less

AmazeVR Wants You To Attend K-Pop Concerts Virtually

Kristin Snyder

Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

AmazeVR Wants You To Attend K-Pop Concerts Virtually
Photo courtesy of AmazeVR

Virtual reality startup AmazeVR now has $17 million to further expand its VR concert experience.

The West Hollywood-based company’s latest funding amounts to a bet that virtual shows, a staple of the pandemic, are here to stay. Mirae Asset Capital led the Series B funding round, with Mirae Asset Financial Group subsidiary (Mirae Asset Venture Investment), CJ Investment, Smilegate Investment, GS Futures and LG Technology Ventures investing again. Mobile game maker Krafton joined the group—but South Korean entertainment company CJ ENM’s stake reveals AmazeVR’s plans to expand into K-pop world.

Read moreShow less
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending