David Hurley thinks he’s onto something big. With a startup called Mautic, he is trying to do essentially what Acquia did for open-source content management systems, but for marketing automation.
After launching last year, Hurley said over 50,000 businesses already use Mautic, it’s been translated into 49 different languages, and it has around 40 software integrations, all of which means a shakeup could be coming for an industry that includes Marketo and Oracle’s Eloqua.
“We see a lot of potential in that space,” Hurley said. “What we’ve seen to date with marketing automation vastly underserves the market.”
So to take Mautic to the next level, Hurley decided to move the startup’s headquarters from Raleigh, N.C., to Boston because of the diverse talent pool that exists here, along with the number of leaders in the city’s open-source and marketing communities.
He also needed capital. So he turned to Boston’s newest venture capital firm, _Underscore.VC, which was known as Assemble VC until officially launching on Monday and is led by former North Bridge partner Michael Skok, former New England Venture Capital Association President C.A. Webb and former Demandware CEO John Pearce.
_Underscore led the $600,000 seed round for Mautic, which will be used to “finalize some product improvements, grow the team in key positions and prepare our go-to market strategy,” according to Hurley.
But money was only one part of the equation for Hurley when he started his relationship with Underscore. The real strength he said he saw in the firm was a community of experts and a technology platform modeled on AngelList, helping founders find the right connections at the right time.
How _Underscore came together
To start out, _Underscore has a $75 million fund raised from children’s hospitals, academic institutions, global foundations and other limited partners to invest in early-stage companies that focus on “cloud intelligence,” a term the firm uses to describe cloud-based services and applications that can handle the large torrents of data being produced for machine learning, big data and the Internet of Things.
[Related: Skok is on a panel at Boston’s State of Innovation, Tuesday, and _Underscore is sponsoring the after party. More info.]
Skok said _Underscore plans to be the first money in for its portfolio companies, with a seed investment size typically in the hundreds of thousands. The firm will then use the rest of its fund to follow-on with a Series A round, which will range from the few to several million. With Mautic’s seed round having closed last November, Skok said that startup’s Series A will be announced in the near future.
The idea for _Underscore was born out of a listening tour Skok held with hundreds of entrepreneurs to learn about what needs weren’t being fulfilled.
“There were three things they wanted help with: they wanted talent, they wanted customers and they wanted experience that would help them grow the business,” Skok said.
“I think what our model does is it surrounds you before you even realize what the problems are and it’s a committed group with skin in the game.”
Besides capital, the thing that entrepreneurs really needed were people with the expertise, at the right time. So after bringing on Webb, whose experience at the New England Venture Capital Association made her a leader in community-building, and Pearce, for his experience as a tech executive, the three decided on a new model of community-building within a VC firm called “Cores.”
At its essence, Cores are a group of experts within Underscore who represent some of Boston’s most seasoned entrepreneurs and tech executives, with each Core representing a different focus area, such as marketing or open source. There is a large community behind _Underscore with more than 60 Core members, all of whom were invited by the firm.
_Underscore isn’t the only new VC firm to employ a network-based model. Skok’s fellow former partner at North Bridge, Jamie Goldstein, officially launched his firm, called Pillar, and it’s co-owned by 16 Boston tech CEOs and co-founders who are offering their capital and expertise to portfolio companies.
_Underscore Core adds a technology platform that’s supposed to make connections with the right kind of experts faster than if a founder was just relying on one time-strapped executive whose Rolodex only goes so far. And it’s all about supplying founders with the right people based on their needs in terms of company stage, functional support and domain.
“Often an entrepreneur goes looking for an expert to help her with something when she’s already stumbled upon the problem, and then the clock is ticking, and it can take weeks or months to find the right person who can plug in and help you,” Webb said. “I think what our model does is it surrounds you before you even realize what the problems are and it’s a committed group with skin in the game.”
For Mautic’s Hurley, one of the Core members he has been able to plug into is Dries Buytaert, the co-founder of Acquia who has since started helping Hurley with all things open source. Through Buytaert and other members, Hurley said he was able to already make some key hires and think about his business in other ways he hadn’t considered before.
“To be surrounded by experts in a core that can speak directly to what we’re looking for and have done it before, it’s unheard of,” Hurley said.
(It’s no coincidence that both Underscore and Mautic are currently located at the State Street headquarters of Acquia, of which Skok is a lead investor and on the board.)
Building Boston’s next generation of investors
“So the black box of VC, we’re blowing it up. It’s gone.”
Beyond the expertise and connections they can provide, the Core members are given the opportunity to invest alongside the firm in its portfolio companies on the same terms. And they can also earn shares out of the firm’s invested capital when they do things like serve on the board of those companies, or introduce a portfolio company to talent, customers or strategic partners.
For Mautic, Hurley was joined by a dozen other Core investors who were able to write a check alongside _Underscore. And because the firm wants to be able to syndicate its investments with other VC firms, _Underscore made a way to list itself and its Core investors as one line item on the deal’s cap table.
“That’s the beauty of it. It just appears as _Underscore,” Skok said.
If that sounds a lot like an AngelList Syndicate, it’s because it is. The firm uses AngelList to run its investment syndicates, similar to the way Cambridge-based VC firm Accomplice runs its Boston-focused BOSS Syndicate.
Core members are able to recommend investment deals with startups they’ve been working with. To handle that deal flow, the firm has built its own software platform for handling all of its investments, and any of its Core members are able to take a look at how the deals come together and what their best practices are.
“So the black box of VC, we’re blowing it up. It’s gone,” Skok said. “It now exists in the cloud. Anybody who gets involved in _Underscore can see it.”
With this approach, the bigger goal is to help Boston raise the next generation of investors, and that includes getting founders and executives at the firm’s portfolio companies on board.
“Most people never get that opportunity unless they’re lucky enough to get plucked and go inside a VC [firm] and spend of couple of years figuring it out,” Webb said. “So to get to do that, learn it, we hope many of them will realize they have a passion for investing and they want to go do that with more of their time and so we can grow the investment community in Boston here.”
Hurley — who currently has 13 employees and plans for Mautic to become one of Boston’s next big tech companies — said he’s already on board to pay it forward down the line.
“When Mautic is wildly successful, 10 years down the road, 15 years, whatever that looks like, I’m looking forward to when I can sit on the other side of the table with this group and continue this from the entrepreneur to the looking back and helping someone else,” Hurley said.