Work-Bench Announces $47M Fund II to Help Enterprise Founders Sell into the Fortune 500

by Jonathan Lehr and Jessica Lin

We are thrilled to announce Work-Bench Fund II, a $47M fund to invest in the next era of enterprise founders selling into the Fortune 500.

This fundraise is a particularly special one for us, as it validates a thesis we have put so much work into testing and perfecting: that the enterprise VC model — when flipped — can completely reimagine how we identify, back, and support world-class startups.

Our secret sauce is really not so secret: we combine our team’s unique backgrounds in corporate IT with our location in NYC — and the density of Fortune 500 companies here — to understand corporate pain points at scale. We then work backwards from pain point to founders to find the most exceptional enterprise startups tackling these problems. Then we play matchmaker.

Our work over the past 5 years has shown us that it is exactly this unique matchmaking that solves the most critical pain point for our founders: closing enterprise customers.

We’re grateful, excited, and above all humbled to continue backing enterprise founders whom we admire and supporting their vision and journeys. We never take for granted that we get to work with a team we love, build a firm we are proud of, and have fun making enterprise tech cool.

Our Team — From “IT to VC”

Just as we look for founders with customer empathy for the Fortune 500, we too strive to bring empathy to both our suits and our hoodies.

We’ve always joked that we bleed enterprise tech :) As a unique species in VC hailing from corporate IT, our team intimately understands the challenge of selling into large organizations. We were the ones sitting on the other side of the table, as we earned our stripes at Morgan Stanley (Jon), Cisco (Jess), Bank of America (Vipin), Forrester Research (Kelley), and Conde Nast (Blake). You would be hard-pressed to find a group of people who love nerding out on enterprise puns more than we do.

As part of Jon’s past life in Morgan Stanley IT’s Office of the CIO, he’d meet dozens of VCs and hundreds of startups a year to determine which companies solved the firm’s pain points. (Enterprise #protip: Wall Street is the largest, most sophisticated, and earliest adopter of solutions from enterprise IT startups, spending over $104B a year.) In this role, Jon got to see the magic of a startup being in the right place at the right time and solving the right problem. If the company could handle enterprise-grade scale, then his team would help them navigate selling into Morgan Stanley’s highly-regulated 60,000-person bank, leading to recurring revenue contracts of up to six or seven figures.

We wondered: given our experience as conduits to startups selling into financial services…could we recreate the same magic across the other Fortune 500 verticals: pharmaceutical, media, tech, and more, all right here in our backyard? 🤔

Our Home — New York, New York

“If you can make it here, you can make it anywhere.”

In no other industry is this more true than enterprise software, where we like to say that all roads lead to NYC.

It’s hard to believe, given the current rise of enterprise startups in New York, that when we started Work-Bench here in 2013 the enterprise ecosystem consisted of MongoDB and a small handful of early-stage companies. With so many Fortune 500s in our backyard, we (quite literally) made an early bet that this emerging startup ecosystem in NYC would be primed to grow where its customers are.

We’re very proud to say that enterprise tech in NYC is here to stay, with over $6B in aggregate enterprise VC funding over the past 5 years for NYC-based enterprise startups alone, and our proud NYC roots reflected in our portfolio and community.

Our Strategy — Strategic Chess, instead of Roulette Spin

Back in 2013, we saw a lot of Silicon Valley VC firms investing in whizbang tech and lobbing those startups over to buyers in NYC. We watched these pitches happen from our corporate seats, and it felt like a series of square-peg-in-round-hole solutions. The startups would many times lack a nuanced understanding of the problems the enterprise customer needed to solve, nor fully grasp the depths of security and scalability requirements needed to sell into our firms.

This is why, when we started Work-Bench, we inverted the traditional VC model. We started by going to the end customer first, understanding their pain points at scale, and then diving into the startup ecosystem to find a modern solution. We did this again and again, and saw over time that what we were doing actually…worked.

And with that became our signature formula: right buyer, right time, right pain point, right corporate executives = everybody wins. And we at Work-Bench benefit from unprecedented GTM insights into our investments. Our Executive Briefings, our direct introductions, and our customer backchanneling have led to over $10M in enterprise contract value for our Fund I portfolio and the wins in Fund II are tracking to surpass this.

Recurring revenue is like oxygen for early stage startups and by bringing customers to the table, we’ve been able to punch above our weight class and flex our muscles in competitive rounds. In Fund II, we will invest in 20 companies throughout the country, split between leading Seed 2 rounds and participating in Series As. In both cases, our check size is a consistent $1.5M and we reserve capital to support our companies in follow-on rounds as well.

Our Community — A Home and Hub for All Things Enterprise

In addition to our VC fund, we have spent the past 5 years building a home and hub for all things enterprise tech — a 32,000 sq. ft. space in Union Square for suits and hoodies to come together. In other words, a place where everyone knows your name, Cheers-style. :)

Jess’s enterprise community motto has always been simple: bring together the best and brightest people in enterprise tech…and great shit will happen. 😎

By hosting 200+ events a year — from 50-person technical meetups, sales lunches, customer success workshops, CEO Dinners, and 200+ person conferences — we get to nerd out on all things enterprise GTM, from learning the ropes of SOC 2 audits, navigating painful procurement processes, maintaining compatibility with legacy environments, and all things enterprise sales.

We are time and again deeply moved by our vibrant #nextgenterprise community that continues to give back in multiples, and which has led to founders we’ve backed, operators we’ve hired, advisors we’ve called on, and customers shared between startups. In fact, 6 out of the last 9 startups we invested in were sourced through our very own community, whether it was founders hosting meetups at Work-Bench, introductions by corporate partners, or meeting at conferences.

We’re mindful that there is still much to do in diversity and inclusion in enterprise tech. As Jess has previously shared here, we continue to build on our efforts across our Women in Enterprise speaker series, profiles, women enterprise founders database, and our Navigate Summit we launched earlier this year. With that said, we are proud to share that out of our Fund II portfolio companies to date, we already have over 70% founder diversity, a truly exceptional stat for enterprise software, and one we are committed to raising even higher.

Looking Forward

We couldn’t be more excited about Fund II. This is just the beginning for our small but mighty team, and we’ll continue this next chapter with little sleep but a lot of heart.

A deep validation of our work is that many of the founders we backed in Fund I have now invested in our Fund II, including serial entrepreneurs like Andy Palmer (Tamr), Craig Walker (Dialpad), Tim Eades (vArmour), and Spencer Kimball (Cockroach Labs).

Additionally, we’re humbled to have many founders/CEOs of notable enterprise startups in NYC invest. This is a testament to the power of our Work-Bench community, and of which these founders have been a generous part: Michael Pryor (Trello, which sold to Atlassian), Olivier Pomel (Datadog), Tasso Argyros (ActionIQ), David Politis (BetterCloud), Zac Smith (Packet), and Kris Beevers (NS1). Founders from outside NYC who have experienced the benefit of our corporate engagement machine firsthand also invested, including Fouad ElNaggar (Sapho, which sold to Citrix) and Elizabeth Lawler (Conjur, which sold to CyberArk).

We are so grateful to everyone who has supported us along the way — the best-in-class teams we are honored to back, our comrades in our corporate network, our unbelievably giving community, our LPs who believe in our vision, our fellow investors who are great collaborators, and our families who have supported us through all of the ups and downs to get here.

As we like to say here at Work-Bench…let’s gooo! 💪

Check out more coverage in TechCrunch here.

A huge debt of gratitude is owed to Tom Quinlan, Tom Carroll, and Hugo Van Vuuren for the forward-thinking vision from RR Donnelley to bet on the very early NYC enterprise tech ecosystem. They were our co-founders and launch partners five years ago in Fund I, providing the support for our 32K sq ft workspace, our $10M fund, and endless mentorship for our team. We wouldn’t be here without them.

We also wouldn’t be here without our Work-Bench Mafia — our early team members who put in the blood, sweat, and tears, helping us lay the bricks to where we are today, and doing great things in NYC tech and beyond.

Thanks to Michaela Lehr for her wordsmithing magic on this post.