SignalFire Relies On Data To Help Portfolio Companies

SignalFire, the San Francisco-based venture capital firm does what most VCs do: provides support for its startups including key hirings at the C-level. But unlike the venture capital firms before it, SignalFire relies on proprietary software to help fill employment voids at portfolio companies.

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That was the case at Zume, the food delivery service that was looking for an executive to manage operations. Based on the in-house software platform at its seed investor SignalFire it was able to land an executive that had experience in food delivery at rival Uber. The executive has since moved up within the company, underscoring the success of SignalFire’s talent software. According to a recent report in Forbes, SignalFire has placed 55 candidates in startup companies through the platform and that is in just six months.  “Firms talk up their value-add, but candidly I’ve never worked with a firm where they held people accountable and measured value in any way,” said Chris Farmer, SignalFire’s founder, and CEO in a recent interview with Forbes. “From day one, the architecture of our firm has been built in a data-centric way. We look more like Uber or Bridgewater than anyone on Sand Hill Road.” Some of its portfolio companies outside of Zume include ClassDojo, Color Genomics,, and Grammarly.

Startups Get And Want SignalFire's Software 

While SignalFire is an early investor in startups,  it is able to co-invest with some of the bigger players which Farmer credits with the employment software dubbed Beacon Talent. He told Forbes it relies on machine learning to track and analyze more than 2 million data sources and close to half a trillion data points to find tech talent around the globe. The software scours patents, open source contributions, and filings with the Securities and Exchange Commission to identify top talent. SignalFire told Forbes it will invest $10 million each year to improve upon the technology behind the software.

The success SignalFire is having with the talent software marks a challenge to the venture capital industry which has long been one in which networking is of utmost importance. Entrepreneurs are encouraged to network as often as possible to meet not only investors but key employees. The software eliminates some of the need for networking and frees the startups’ entrepreneurs to focus on running the operation.

SignalFire isn’t the only VC that is thinking out of the box when it comes to helping portfolio companies but what makes it stand out is that the venture capital firm was launched because Farmer wanted to do something atypical in the world of VCs. An entrepreneur himself, he spent close to four years working at VC firm Venture Partners as the in-house developer of tracking system software. He then went on to General Catalyst where he created an iteration of SignalFire before spinning out in 2013 armed with $5 million. Since then he raised $53 million for the first seed fund and launched a second $330 million fund in May of last year.