Mainsail Partners Hires Cavanaugh

Mainsail Partners, a growth-equity firm that straddles venture capital and private equity, announced a new hire to help portfolio companies with recruiting, underscoring the growing importance private backers are assigning to talent acquisition in Silicon Valley’s tight job market.

Kathryn Cavanaugh, formerly of Sightline Partners and De Novo Ventures, has joined as vice president of talent to recruit senior-level executives, board members and advisors.

Increasingly, firms working with developing companies are formalizing and intensifying their operational roles, particularly in recruiting, where competition for key hires such as engineers is intense.

Mainsail, which raised its latest fund totalling $216 million in June, typically invests in companies that have been “bootstrapped” by their founders, meaning they have built revenue-generating businesses without accepting outside investments.

The firm’s sweet spot is a business generating $5-$15 million in revenue that could grow much faster with more capital, said Mainsail co-founder Jason Payne.

“They might not fit the venture capital paradigm,” he said. “They’re not growing 150 percent next year. They might be growing 25 percent.” He aims to make returns of three to five times his capital, he said.

Mainsail’s current investments include Bar Method, the San Francisco-based exercise chain; Togo’s, the San Jose-based sandwich shop Mainsail bought from Dunkin’ Brands; Steelwedge, the Pleasanton, Calif.-based business software company; and PayLease, the San Diego, Calif., property-management payment service.

The firm also said it had hired a new controller, Amy Corrieo, in part to allow chief financial officer Lars Ahlstrom more time to work with portfolio companies on financial reporting and budgeting.

It also promoted Chris Cassidy, who oversees marketing and digital strategy for portfolio companies, to operating partner.

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