Austin McChord was thinking about his next steps after leaving Datto, a company he founded and led before selling it for what some reports estimate to be $1.5 billion, when David Fialkow, General Catalyst’s co-founder, approached him to join the firm as a venture partner.
“Datto provided a great return and I was asked to help find GC another Datto,” said McChord in an interview with VCJ
GC invested $25 million in Datto’s first venture round in 2013. Vista Equity Partners bought the company in 2017. McChord explained that he owes a great deal of Datto’s success to GC’s involvement in his company and as an investment partner he can not only discover great businesses, but also help founders take their businesses to the next level.
At General Catalyst, McChord will focus on investing in startups in infrastructure and SaaS, software-enabled hardware, and industrial IoT companies. “I am looking for companies with some revenue, but at an earlier stage than when GC invested in Datto,” he said.
McChord will be based in GC’s Boston office, but he intends to look for investment opportunities across the East Coast, particularly in second-tier cities with great universities, such as Rochester, New York, and Pittsburgh, Pennsylvania, he told VCJ. His focus away from major tech centers is not a surprise. Datto was Connecticut’s first unicorn.
He did not comment on check sizes, but McChord should not have trouble writing them. General Catalyst in March last year raised nearly $1.4 billion for its ninth and largest fund to date.
The GC team, especially Paul Sagan, former CEO of Akamai Technologies and Datto board member, advised McChord on how to run Datto as a long-term business, rather than a large project, McChord said.
At GC, McChord joins 13 other partners and managing directors, including the former board members of Datto, Steve Herrod and Sagan.
McChord, who started Datto in 2007, while still in college, is cognizant that being a VC will be very different from running a company.
“I’ve not made any investments yet,” he said, “but other people have told me it’s a big transition from running a business to supporting other people’s dreams.”