Toba Capital, based in Southern California, specializes in early-stage B2B software companies and typically adds 12 to 15 companies to its portfolio each year. Mathieson emphasizes their focus on leading Series A or A-like deals, often with investments around $10 million.
Unlike traditional VC funds with external limited partners (LPs), Toba operates with a pool of capital that they grow over time. Their ownership strategy involves leading an initial round and potentially leading an extension funding round, effectively taking “two bites of the apple.” Mathieson explains that they aim to start with a higher ownership percentage, around 20-25%, and then experience some dilution as the company progresses.
Drawing from over eight years at Toba, Mathieson underscores the importance of being a good listener and showing empathy to founders. He believes that building a company is not about doing everything perfectly but finding the one key thing that drives momentum.
Mathieson’s board roles include companies like Boulevard, Brella, and Candid Wholesale, and he expresses a preference for small and midsize businesses (SMBs) over enterprises, as it aligns with his interests and offers a less crowded field for investment. He appreciates business management platforms for small businesses, as they resonate with his passion.
In addition to his investment activities, Mathieson regularly writes blogs on business and investing topics. He emphasizes the significance of gross revenue retention, particularly in the SAAS (Software as a Service) sector, where the best companies achieve exceptionally high gross logo retention rates of 97-98%, signifying strong customer retention.
Mathieson’s approach highlights the importance of understanding both the VC and founder perspectives to foster successful partnerships in the world of venture capital.
