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Firm and Portfolio Updates January 2024

Firm and Community Updates

Welcome, Bill Murphy! Inner Loop is proud to announce Bill Murphy, Managing Director of Cresting Wave, as our newest Strategic Limited Partner. Strategic LPs are invested in one or more Inner Loop funds, generally publicly associate with the firm, and have a direct interest in the themes and companies we back. Strategic LPs are available to Inner Loop and our portfolio companies on an opt-in basis for referring opportunities, diligence, advisory roles, and direct personal investment into companies.

Bill is Managing Director of Cresting Wave, a community of leading technology executives at major companies. In that role, Bill is learning from and guiding technology leaders (e.g., CTOs and CIOs) in their goals and roadmaps, and then connecting them with the emerging tech companies that are most relevant to them.

Prior to Cresting Wave, Bill spent eight years as the CTO for Blackstone, the world’s largest alternative investment manager, now with over $1 trillion in assets under management. Previously, Bill was Founding CTO of Capital IQ, the market analytics and information provider acquired by S&P in 2004. Bill stayed at S&P until 2011 and helped grow the Capital IQ business to over $300 million in revenue.

Bill currently serves as the independent Director at Qualytics, an Inner Loop Capital Fund I portfolio company, which is how we first met in 2021. I am so pleased to welcome Bill to the Inner Loop community!

Congrats Ray Rothrock and NVCA! Ray Rothrock, who continues a storied career in venture capital, joined with the NVCA to ring the NYSE Closing Bell on December 6. Ray has been an LP in all Inner Loop investment vehicles and has been a mentor to me since we first began co-investing in 2015. Ray’s career highlights include 25 years at Venrock, where he remains a Partner Emeritus, serving as the current Vice Chairman of UTIMCO, current Board member of Check Point (the $18 billion market cap Cybersecurity company, where he has served since leading the Series A investment in 1995), board member of Team8 (both his Check Point and Team8 roles are highly relevant to Inner Loop’s work), Chairman of STG-owned RedSeal (where I also serve on the board), and the 2013 Board Chair of the NVCA. Congrats, Ray on the recognition of your service, and thank you for your long-standing commitment to Inner Loop and your ongoing support and guidance as I continue to learn and grow as an investor.

Ray Rothrock (fourth from left) joins the NVCA in ringing the NYSE Closing Bell, celebrating the 50th anniversary of the NVCA. It’s great to see other Inner Loop friends at the event including Charles Hudson of Precursor Ventures (fifth from left), Emily Melton of Threshold Ventures (second from right), and new friend Maryam Haque of Venture Forward (third from left).

Portfolio and Industry News

Portfolio News

Base Operations (Pilot Fund and Fund I), an enterprise platform for physical security operations, has announced their $9m Series A round. Inner Loop has been an investor and a supporter of Founder Cory Siskind since 2019. Congrats on this major milestone to Cory and the whole team. Here’s to your future growth in 2024 and beyond!

Tamnoon (Fund II) has gone live with its Technology Partnership with public security company Check Point. This partnership will allow Check Point customers to more seamlessly benefit from Tamnoon’s innovative Managed Cloud Detection and Response. Tamnoon has also relaunched their website around this MCDR messaging. I firmly believe this is a category we will be hearing much more about in 2024.

Consistent with themes we have been exploring in Ad Interim, our occasional newsletter on AI, DNSFilter (Pilot Fund) has added GenAI sites as a category to their market-leading DNS-based web filtering. As we have been saying, all sectors of focus for Inner Loop increasingly have AI technologies at their core – both as part of the tech stack, and as a core demand driver for their products. DNSFilter’s new feature allows customers to more easily control access to GenAI services from their networks. More on this strategic feature is here.

Gigasheet (Fund I) has launched a new feature to automatically track history in Salesforce instances. This key feature does not exist natively in Salesforce, and Gigasheet’s ability to manage a billion rows in a spreadsheet UI makes it a natural platform for this solution. More on this launch is available in this LinkedIn post by CEO Jason Hines.

This new feature aligns with one of Inner Loop’s theses on Enterprise Big Data. There are amazing new opportunities in AI, including GenAI, that will likely form a new platform shift in enterprise technology. At the same time, there are hundreds of pockets of low-hanging fruit in enterprise data capture, distribution, and usage that can add immediate value without technology risk, and from which start-ups might establish a toe-hold in enterprise sales. I see this directly in my own workflow. To date, GenAI has provided me with some intriguing glimpses into a possible future. But the most important opportunities for data to add value in my day-to-day work are primarily around integrating data I already have or have rights to directly into my workflow.

AppOmni has released a new customer case study that highlights the key role that their SaaS Security Posture Management can play in the technology integration after a major merger or acquisition. The study focuses on Delian, the 2,500 employee information services company with customers in 160 countries, that has grown significantly through acquisition.

Industry News: Rule of X

Thank you to Byron Deeter and Sam Bondy of Bessemer Venture Partners for bringing much-needed nuance to the industry-dominant, but intellectually incomplete, Rule-of-40 (meaty introduction followed by TechCrunch paywall). Byron and Sam demonstrate how the Rule-of-40 remains a great target for mature SaaS companies. However, they go on to show that any inference that Growth and Free Cash Flow should be treated as equally valuable contributors, and therefore be traded off at a one-to-one ratio, can be deeply destructive to shareholder value. Instead, the Bessemer investors demonstrate that a percentage point of growth makes a 2-3x stronger contribution to enterprise value than a percentage point of FCF.

Bessemer therefore introduces a new Rule of X (after the TC paywall, sadly, but cribbed below), to properly value the trade-off between growth and FCF. Not only is this a better metric for finance and executive teams, but it is also a better rule of thumb for analyzing businesses and understanding their market multiples. Byron and Sam demonstrate that their Rule of X has a 50% better predictive value for revenue multiples of public companies than the Rule of 40.

So if any of you are managing your maturing SaaS companies to 20% growth and 20% FCF, please continue to do so. Meanwhile, Byron and Sam (and I, whenever possible!) will be quite comfortable managing companies toward 50%/-10% or 60%/-20% and significantly outstripping the enterprise values of your companies over time!

It’s an Honor Just to Be Nominated

It is award season in start-up land, and Inner Loop’s portfolio companies, partners, and friends were rightly recognized for their innovations and contributions to Cybersecurity and technological progress generally.

The SANS Institute has honored two of our colleagues with significant awards in their Difference Makers Awards ceremony. Our first anchor LP, Ron Gula, was recognized with the Lifetime Achievement Award, and Bryson Bort of SCYTHE (Inner Loop angel investment) was named Innovator of the Year. Bryson’s acceptance speech is captured on YouTube. Congrats Ron and Bryson!

Gigasheet (Fund I) was recognized as one of the Top Ten Spreadsheet Software Options, included among Excel, Google Sheet, Apple Numbers, and Zoho Sheet. Not bad company to keep for the three-year-old Gigasheet. The reviewers rightly focused on the fact that “Gigasheet supports spreadsheet files with up to 1 billion rows in a single sheet. This makes it one of the best options for the kind of big, unwieldy datasets that other software simply can’t handle.”

They also noted that Gigasheet can “import data from complex file formats like JSON, XML, PCAP, and SQLite at the click of a button,” and that “Gigasheet’s clean and intuitive interface, [makes] it a breeze to organize multiple spreadsheets.” Congrats to Jason, Garth, Erik, and the whole Gigasheet team on this recognition!

Frost & Sullivan recognized AppOmni (Pilot Fund) as their Global Company of the Year in SaaS Security Posture Management, noting that they lead their industry. Congrats to Brendon, Brian, and the whole AppOmni team!

AppOmni was also named to the Fortune Cyber 60 for 2024 as a top-20 Early Growth Stage company in Cybersecurity.

Both GreyNoise (Pilot Fund) and SCYTHE (prior angel investment) were recognized as DCA Live Red Hot Cyber Companies for 2023, a short list of the most compelling Cybersecurity companies in the Washington, D.C. region.

Congrats to all the Inner Loop companies, founders, teams, LPs, and community members who were recognized for their compelling contributions to Cybersecurity and tech, as well as their other accomplishments.

Archives and Please Be In Touch

Archives for both the Firm and Fund Updates (twice per quarter) and Ad Interim, the occasional newsletter on AI (once per quarter) are available from the Inner Loop Capital website. Please visit to get caught up.

Now that you are up-to-date on all Inner Loop activities, please reach out any time. I welcome:

  • Discussions about any of the companies, technology sectors, or investment themes above
  • Introductions to founders or future founders in Digital Infrastructure, including Cybersecurity, Cloud Tech, DevOps, DevTools, Data Science, and AI
  • Connections to potential co-investors or collaborators in these sectors
  • And drop-ins to Baltimore (or the greater Washington D.C., area) any time

Do not hesitate to reach out if you see something or have some ideas on ways we can collaborate more closely.

I appreciate your interest in and support of Inner Loop Capital. I wish you and your families a wonderful start to the new year and a 2024 full of health, camaraderie, and personal and professional growth.

Justin Label

Managing Director

Inner Loop Capital

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