While there are lots of traditional paths for a founder to raise venture capital and private equity investments, some hybrid or alternative options exist. Philadelphia’s Archetype Solutions Group rests somewhere in that in-between.
Founder and CEO Chetan Bagga began work on Archetype in 2009, bringing management consulting experience and personal investing together. He was aiming to scale up the type of investing he was able to do, and in 2019, he founded the Archetype Fund, an $11 million fund for companies in the workplace benefits and people development sector. While it directly deploys capital to some companies, it might also make investments via resources like building software products, helping a company reach its product market fit, or executing growth strategies.
Today, the firm sits around 80 employees — much higher than you’d find at traditional VC firms, CTO Shahrukh Tarapore told Technical.ly. The management consulting and resources side of the business ups Archetypes headcount. The tech side of the team, which is about half of the total, is based in India. Tarapore manages this team, which works on software development, product management, UX and UI design. But this strategy also diversifies the type of people weighing in on investment decisions, he said.
“We made this evolution from just writing checks and giving advice, you know, open doors method, and we take it to logical extreme,” Tarapore said. “And also pair our capital investment with functional resources.”
Archetype just exited its first company from the 2019 fund: digital health platform Gennev, which offers patients personalized treatment for menopause relief. Archetype had between 6% and 7% ownership in an in-kind investment of functional resources like software and marketing when it was purchased by Unified Women’s Healthcare. The deal was announced in October.
“When we launched Gennev in 2016, our goal was to leverage technology and clinical expertise to fill a significant unmet need and dramatically improve women’s lives,” said Jill Angelo, Gennev founder and CEO, in a statement. “The team at Archetype played a critical role in our early growth journey by providing access to capital as well as their extraordinary technology and product teams.”
Archetype’s first fund was slated for a five- to seven-year investment horizon, but Gennev’s exit came early in an “exciting” moment for the firm, Tarapore said. Gennev reports that it grew its revenue by 120% over its time in the fund.
“I think it speaks to the model of those deals,” Tarapore said. Archetype is getting started on a second fund, aimed at $100 million and about 12 to 15 portfolio companies, per the CTO.
Tarapore comes from a background in research for Lockheed Martin, focusing on machine learning and simulation modeling. He also spent some time at Arcweb, with a focus on delivering a quality software engineering process. When he joined Archetype last spring, he was tasked with building out the tech organization within the existing firm.
His job is twofold: He’s consulting on digital transformations for clients and building software projects for portfolio companies, and he’s bringing a tech lens to the table while the firm considers companies for investments. It strays from the experience at most VC or private equity firms, Tarapore said, where most people have a background in finance.
“I’m asking, ‘Is it technologically feasible? Is there a user need for a product we’re putting into the marketplace?'” he said. “Coming from a tech perspective is something not typical in capital.”
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