Strategy Session is a feature for Crunchbase News where we ask venture capital firms five questions about their investment strategies.
Chattopadhyay started the firm in 2016 after being a partner at Tribeca Venture Partners and was joined by Sawhney, whose previous careers include being a journalist and in finance.
They told me that Armory is a seed and early-stage technology venture capital firm that strives to be a community catalyst for founders in the upstate New York and Northeast regions, as well as other geographies outside of New York City — where they have an office — and Silicon Valley
A team of nine, the firm focuses on B2B companies with an emphasis on vertical SaaS and marketplace. Armory has raised two funds and backed 13 companies, three of which have exited: ACV, which went public in March, as well as Agronomic Technology, acquired by Yara International in 2017, and Good Uncle, acquired by Aramark in 2019. Other prominent investments include BentoBox and UCM Digital Health.
Chattopadhyay and Sawhney spoke with me about working together, where they see talent going and leveraging networks. The following was lightly edited for clarity and length.
What’s it like to work together as a married couple?
Chattopadhyay: We have a great personal and professional connection, and we also have trust in each other. When we were first getting started, investors would tell me that they like what I am doing, but what does Pia think?
Sawhney: It’s been important that we had our own careers before starting a company together. Both of us were at a certain level of seniority when we started, so we complemented each other with confidence. The culture of our firm is centered around integrity and frankness. I bring that being a former journalist, and so does Somak. The only way to figure things out is to ask really hard questions to give the context you need. That culture is what we stress within the team, and it has served us well so far.
How do you like to work with founders?
Sawhney: Founders resonate with us on a personal level. We have a small team, and everyone on the team gets to know the founder.
Chattopadhyay: We act as a trusted adviser for companies. One of the ways we help the companies is on the recruiting side. We have a lot of affiliation through alumni in universities and can tap into the network for recruitment. The next part is follow-on capital; we have a 100 percent hit rate in our companies attracting follow-on.
You already mentioned recruitment, but how else are you tapping into universities?
Sawhney: Somak and I worked in New York City, Somak in technology, and I in media, and we have put together a vast network of people in the city and in upstate New York. With universities, we’ve gotten to know people in the accelerator programs.
Chattopadhyay: It’s always been important for talent attraction. In many cities, the university plays a role in attracting employees and talent to the region. There are 100 universities in upstate New York. Universities are capturing funding from the National Institutes of Health or other sources, and getting a level of research dollars comparable to venture dollars. After graduation, they may go to New York City or Silicon Valley, but with our fund, we are providing an opportunity to have them come back to a place where they had fond memories, a lower cost of living, and the ability to tap into world-class human capital. We see certain entrepreneurs, like ACV, build out in the University at Buffalo and Rochester Institute of Technology, Cornell or Syracuse.
Working with all of the accelerator programs, how do you balance your attention between ideas, especially ones that may not pan out?
Sawhney: We like to be very collaborative, friendly and polite, which is important if you want to do business. If you are helpful or receptive, word travels fast. Building trust in this region took a long, long time, and we also had to instill the confidence that it is worth taking venture capital. There are a lot of people who believe they don’t need capital and can run their business with funds from friends and family. We help them understand that they can expand and scale faster if they get people around them who have done this before. We have been here seven years, and we are still learning.
Chattopadhyay: We are here to be a sounding board and can be the Sherpas to help people understand what VC is. We also spend time talking to people about why VC might not be good.
You are focusing on tech companies outside of the traditional tech hubs. Where are some unusual cities you are finding founders?
Chattopadhyay: There are many VCs who talked about how Zoom leveled the playing field, but we are not seeing that in the seed and Series A funding as much. We’ve been observing the talent migration patterns in the past year, and we are making a bigger push with our fund to look at Indianapolis, Columbus, Ohio, Pittsburgh and Philadelphia. When we go there, these towns have a critical mass of entrepreneurs, talent, universities and accelerator programs.