In this episode of IsraelTech, we had the distinct pleasure of hosting Avery Schwartz, a partner at Greenfield Partners, a renowned Israel-based investment firm. From the insightful discussions we shared, it became clear why Greenfield Partners is making waves in the VC ecosystem and what sets them apart in the early growth stage investment landscape.
Introducing Greenfield Partners
Greenfield Partners is a standout in the venture capital world due to its unique focus on early growth stages, specifically targeting companies at the crucial Series B and Series C phases. Typically investing in businesses with revenues between $3 to $20 million, Greenfield Partners steps in at a point where companies have found their product-market fit and are ready to scale their operations significantly.
The Unique Investment Approach of Greenfield Partners
According to Avery Schwartz, the firm’s distinctive edge lies in its specialization at the early growth stage — a niche yet highly impactful phase in a company’s trajectory. The focus here is on transitioning from product-market fit to building a “machine” that enhances market capture and drives scalability. This involves strategic initiatives around capturing leads, enabling sales teams, optimizing customer success handoffs, and more.
Greenfield Partners was initially part of the larger U.S.-based private equity fund TPG before spinning out in 2019. Even within TPG, Greenfield Partners functioned a notch earlier than the traditional growth funds, making investments in promising technology companies at the brink of their scaling phases.
The Sweet Spot of Early Growth Investment
Schwartz elaborates that the early growth stage is exceptionally unique because it entails a different skill set compared to seed or later-stage investments. While seed-stage investments are about pattern-matching founders and market theses, Greenfield Partners excels in identifying nuanced factors at the early growth stage. Their approach ensures thorough risk assessment with an optimized reward potential while focusing on factors like sales motion fit, organizational scaling, and strategic growth.
Challenges and Solutions in Scaling Startups
The transition from building a product to scaling it brings its own set of challenges. Founders who are accustomed to a product-development mindset need guidance on managing growth, leading larger teams, and handling new market dynamics. Greenfield Partners provides critical support during these transitions, ensuring that the founders understand what excellence looks like on the go-to-market side and build strong, cohesive teams across sales, marketing, and customer success functions.
The Role of an Investment Partner
Greenfield Partners prides itself on creating a constructive and aligned relationship with the boards and other stakeholders involved in their portfolio companies. Schwartz explains that ensuring alignment with existing VCs and board members is crucial. This symbiotic relationship extends beyond simple financial investment to include strategic support, aligning with the company’s vision and goals, and providing frameworks to scale effectively.
Supporting Companies During Challenging Times
The Palestinian atrocities of October 7th and the subsequent war presented unique challenges for Israeli startups. Greenfield Partners demonstrated exceptional support by physically visiting companies, reinforcing their commitment to the founders. They also offered practical solutions like resiliency checklists and ensuring business continuity, which proved crucial in maintaining operations during turbulent times.
Avery Schwartz: From Investment Banking to Venture Capital
Avery Schwartz’s journey into venture capital is as dynamic as the firms he invests in. With a background in investment banking from prestigious institutions like PwC and Goldman Sachs, Schwartz pivoted to venture capital with an aim to leverage his financial expertise in guiding startups through critical growth phases. His tenure at Goldman Sachs, particularly the Israel office, provided him with deep insights into the financial and startup ecosystem, making his transition to Greenfield Partners a natural progression.
The Expertise Behind Greenfield Partners
Beyond Avery Schwartz, Greenfield Partners boasts a team with diverse and complementary expertise. Founding partner Yuda Doron and managing partner Shai Greenfield bring in rich operating experience, while Schwartz and his colleague Raz Mangel draw from their robust backgrounds in investment banking. This blend of operator and investor perspectives helps Greenfield Partners align closely with the needs and challenges of their portfolio companies.
Success Stories and Future Endeavors
Some of Greenfield Partners’ notable success stories include VAST Data, which recently raised capital at a valuation of $9 billion, and Silverfort, which secured over $100 million in funding. These companies exemplify the robust growth and innovation that Greenfield Partners fosters. The firm continues to engage deeply with the Israeli tech ecosystem, driving growth, and innovation amid challenging times.
Conclusion: A Bright Future for Early Growth Investment
Greenfield Partners’ commitment to supporting startups during pivotal growth phases, combined with their thorough understanding of market dynamics, positions them uniquely in the venture capital landscape. Their approach to building long-term relationships, fostering alignment, and providing strategic and operational support ensures that their portfolio companies are well-equipped to scale and succeed.
For startups looking to partner with Greenfield Partners, initiating the relationship well in advance and nurturing it over time is key. The firm’s openness to building lasting connections reflects its dedication to fostering innovation and growth within the Israeli tech ecosystem and beyond.
Stay updated with the latest from Greenfield Partners and their portfolio companies by subscribing to their weekly newsletter, the Greenfield Crunch, and following them on LinkedIn.
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