The Syndicate Group, a venture capital (VC) firm, announced today revealed it has invested in seven startup companies with the intent of helping them accelerate the development of channel programs by creating an advisory body made up of channel partners that will also be given opportunities to invest in those firms.
The program emulates similar VC firm initiatives that revolve around CIOs and CTOs that currently participate on advisory boards in a similar fashion, says The Syndicate Group CEO Chad Cardenas.
The seven startups include Cohesity, a provider of data management platform; Harness, a provider of a continuous delivery platform made available as a cloud service; Bitglass, a provider of a cloud access security broker; Trifacta, a provider of data management tools; VAST Data, a provider of a storage platform; Synack, a provider of cyber security tools; and BigPanda, a provider of an IT Ops platform.
Cardenas says he initially beta-tested this model as a partner with Instant Scale Ventures, which among other IT companies provided funding for AppDynamics, CrowdStrike, Nutanix, Skyhigh Networks and CliQr. The advisory team for The Syndicate Group includes Nutanix co-founder Mohit Aron who is now CEO and co-founder of Cohesity, as well as former NetApp Chairman and CEO Dan Warmenhoven. The Syndicate Group also claims that it is already in touch with more than 445 channel companies.
Before launching The Syndicate Group, Cardenas also served at president and CIO at Trace3, an IT services firm.
The Syndicate Group is trying to bridge a divide between VCs and the channel that has existed for decades. VCs typically help startup companies land their first customers by focusing on direct sales. The assumption is those companies will build a channel once they are acquired or go public. However, Cardenas says in recent years it’s become apparent that as the size of the investment being made in startups has increased the need to develop channel programs sooner is becoming a higher priority.
At the same time, the rate at which new technologies are coming to market has accelerated. That, in turn, creates a need for channel partners to become involved sooner.
“It’s a much more fast-paced world today,” says Cardenas.
Ultimately, Cardenas says he hopes this effort will serve to reduce resistance to disruptive emerging technologies that challenge providers of incumbent platforms that channel partners are usually closely aligned. That reliance often results in channel partners missing out on emerging technologies at the time they generate the most profits, noted Cardenas.
It’s too early to say what impact The Syndicate Group will have on relationships between VCs and the channel. However, given the current state of those relations they probably couldn’t get much worse.
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