Arrowroot Capital is a growth equity firm based in Santa Monica, California. We invest in growing software-as-a-service and internet-based businesses.
Arrowroot Capital is a growth equity firm based in Santa Monica focused on growing and mature, recurring revenue software businesses. We seek to partner with management to accelerate growth and help guide the company to its ultimate exit. Arrowroot targets equity investments in the range of $5 million to $25 million, and has the flexibility to pursue larger opportunities.
Arrowroot's capital is typically deployed to achieve very distinct goals including, but not limited to:
- Working capital and growth investment
- Liquidity for founders and/or management
- Liquidity for previous venture or angel investors
- Acquisition capital
Arrowroot’s capital is flexible, but investment characteristics generally include:
- Minority or majority positions
- Board representation
- 2 to 4 year hold periods
- Highly incentivized management teams; commonly via new option grants
- Arrowroot seeks to optimize the investment amount in order to efficiently grow businesses and create healthy capital risk dynamics for founders, current management, and past investors
Target Company Characteristics:
- $5 million+ revenue run-rate
- Strong recurring revenue growth rate
- Proven, effective and efficient sales and marketing strategy
- Mission-critical, B2B software that typically solves a pain-point in compliance, workflow, security, and/or optimization
As a niche firm focused solely on software, Arrowroot has an extensive and relevant network in this space. Our Operating Partners act as consultants to our management teams to help scale various aspects of their organization including sales, marketing, human capital, and technology. They are available to work with portfolio companies from due diligence through the life of the investment and are also able to serve as board members.
Arrowroot’s capital is predominantly utilized for the expansion of sales and marketing teams. We have an extensive track record of helping build successful salesforces at a rapid pace along with assisting with new key hires through our extensive network. Specific focus areas include lead generation and optimization, customer onboarding, organizational augmentation, compensation strategies, pricing, customer retention, profitability analysis, segmentation, upselling and customer service.