Highlights
- Frances Anne Capital’s unique thesis centers on customer acquisition over product innovation.
- They spend 80% of due diligence time analyzing how companies attract and retain customers.
- Developed Cam X Pro, a digital app, to systematize customer acquisition due diligence.
- Prefers minority stakes (<10%) with active, hands-on support focused on growth and exit.
- AI is viewed as a productivity booster to optimize customer understanding and sales.
- Acknowledges a market valuation reset and favors investing in revenue-generating companies.
- Encourages founders to maintain transparent, consistent investor communications, including sharing setbacks.
Summary
In this episode of The Innovators and Investors Podcast, host Kristian Marquez interviews Romy Kochan, general partner at Frances Anne Capital Partners, a venture capital firm that focuses on customer acquisition strategies across industries. Romy and her sister Natalie co-founded the firm with a unique investment thesis emphasizing the power of teams who excel at selling and retaining customers rather than focusing solely on product innovation or emerging technologies. Drawing from over 300 private market transactions and experiences with portfolio companies, the Koshins identified customer acquisition as a critical driver of sustainable revenue growth and business longevity, particularly in the under-explored Southwest Florida market.
Frances Anne Capital Partners differentiates itself by dedicating approximately 80% of its due diligence time to deeply understanding how potential portfolio companies acquire customers, which led them to develop a proprietary digital tool called Cam X Pro. This app systematizes and professionalizes customer acquisition due diligence and has even helped portfolio companies attract additional investment by improving their reporting and visibility.
Romy emphasizes the importance of preparation and strategy over psychological manipulation in sales, advocating for deep customer knowledge and ongoing communication loops, which ensure that businesses remain agile in reacting to ever-changing customer needs. Both B2B and B2C models fit within their thesis, as long as there’s a strong customer acquisition engine behind them.
The firm prefers to take minority ownership stakes (less than 10%), focusing on active support rather than control. They provide ongoing resources to portfolio companies, including follow-on funding, PR support, and networking to connect founders with ideal customers and potential exit partners. This hands-on collaboration continues until an exit is achieved.
On the impact of new technology and trends, Romy is bullish on AI as a mandatory productivity tool, especially in analyzing and refining customer acquisition efforts. Rather than viewing AI as a product, it’s a means to optimize sales and revenue growth, helping even non-technology businesses like skilled trades or consumer product companies to thrive in a competitive market.
Romy also offers valuable insights on the current investment climate, noting a reset in valuations from the highs of 2021 and emphasizing the viability of investing in companies with reasonable valuations and solid revenues rather than chasing unicorns. She encourages founders to adopt transparent and consistent investor reporting, including sharing challenges openly, which fosters stronger investor-founder relationships.
Reflecting on her career, Romy shares lessons learned, such as the importance of starting in private investing earlier, the value of perseverance after failure, and the long-term benefit of networking and financial patience. The episode closes with an invitation to connect with Romy for those interested in learning more about Frances Anne Capital Partners.
Key Insights
- Customer Acquisition as a Primary Investment Focus: Romy asserts that knowing how to sell effectively and maintain relationships with customers is the single most important factor in building sustainable revenue streams. Unlike many VC firms focused on technology or feature moats, Frances Anne Capital prioritizes proven customer acquisition strategies to weather market changes and uncertainty.
- Development of Cam X Pro Enhances Due Diligence: Recognizing that many investor groups avoid deeply vetting the sales and customer traction elements, Romy and Natalie created Cam X Pro to rigorously assess these factors. This approach not only improves their investment decisions but also provides a valuable resource for companies to present validated sales data to co-investors, enhancing fundraising success.
- Minority Ownership with Active Support: Rather than seeking control, Frances Anne Capital takes smaller stakes to empower founders while providing strategic support that focuses on accelerating sales growth. Their model ensures founders maintain autonomy but benefit from committed investor engagement, including PR and market introductions.
- Preparation Over Manipulation in Sales: Romy highlights that success in customer acquisition stems not from psychological trickery but from thorough preparation—knowing the customer’s needs deeply and presenting value propositions specifically aligned with those needs. This preparation fosters authentic connections that drive sales and repeat business.
- AI as a Productivity Tool in Sales and Marketing: Romy’s insightful view treats AI as an essential tool to enhance customer data analysis and acquisition efficiency, rather than a standalone product or trend. This pragmatic stance underscores the need for companies to adopt AI to remain competitive by increasing speed and insight into customer behavior.
- Market Valuation Reset and Realistic Fundraising: The discussion acknowledges the overvaluation bubble of 2021 and the necessary adjustment period many startups face. Romy encourages founders to accept right-sized valuations, emphasizing that steady revenue growth is more critical than lofty valuations, and investors like Frances Anne Capital are ready to back such businesses patiently.
- Transparency and Regular Reporting Build Investor Trust: The importance of consistent communication to investors through quarterly updates, including bad news, cannot be overstated. Romy explains that true investor confidence arises when founders honestly share setbacks along with solutions, creating trust and opening the door for collaborative problem-solving.
- Broad Market Applicability: Their thesis works equally well for B2B and B2C companies, as all businesses have customers, and successful sales strategies apply across sectors. This flexibility in investment approach allows the fund to capitalize on customer-focused teams regardless of industry.
- Long-Term Networking and Patience Keys to Success: Reflecting on her career, Romy advises new investors and founders to recognize the value of patient networking and having sufficient cash reserves to weather initial challenges. This long view helps in building relationships and securing capital needed for sustainable growth.
- Founders Should Not Fear Failure: An important philosophical takeaway is that mistakes and setbacks are inevitable. Rather than dwelling on them, founders should quickly learn, adapt, and move forward. This resilience builds founder strength and investor confidence over time.
The conversation offers a grounded, practical perspective on venture capital investing that privileges customer engagement and ongoing relationship-building over hype or technological bravado. It also provides actionable guidance for founders seeking to improve business operations, investor relations, and fundraising outcomes in a dynamic market environment.
Stay up-to-date with Romy Kochan and her work with Frances Anne Capital Partners.
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