Entreda founder Sid Yenamandra launches Surge Ventures

A fintech founder whose cybersecurity firm sold to Smarsh three years ago has launched a new venture capital business to invest in wealth management and other financial services software.

Surge Ventures has secured $10 million in initial seed capital from private equity firm Virgo Capital and attracted an advisory board with a strong industry track record at firms including LPL Financial, Advisor Group and Cetera Financial Group, founder Sid Yenamandra said in an interview. Yenamandra stepped down as chief customer officer at communications compliance firm Smarsh in October after leading his prior startup, Entreda, through its transition under a new parent. 

Surge Ventures

His new venture firm, Surge, will focus on software addressing the industry’s “data hygiene challenge,” with an approach aimed at helping innovators get over the humps that come from questions such as raising capital, creating sales and marketing plans and working with the right developers, Yenamandra said last month.

“As an entrepreneur, I know some of the challenges of building a company from the ground up,” said Yenamandra, whose career spans two other startup exits and a tenure leading a semiconductor manufacturer’s data project under a contract with the National Security Agency. “There’s all this stuff you’re doing while you’re trying to build your market. There are so many different things that could go wrong in the early days,” he added. “We really need to rethink this problem.”

Data architecture and management came in second only to digital client and advisor experience on a recent survey of wealth firms’ 2023 tech investment priorities, and other startup founders often point out the steep barriers to success in a competitive and fragmented industry. Consultative services from experts would provide critical aid to the founders navigating those difficulties, said Mac Gardner of financial literacy and tech firm FinLit Tech.

“That would be a solution that would resonate with a lot of business owners,” Gardner said. “You don’t think about all the other ancillary things that need to be done from a tax perspective, a legal perspective or business perspective.”

Surge’s advisory board includes Larry Roth, the former CEO of Advisor Group and Cetera; Matthew Martin, LPL’s deputy chief information security officer; and Geoff Moore, chief information officer of insurance and wealth management brokerage Valmark Financial Group. Surge is “bringing together investment capital, deep industry knowledge, a strong industry advisory network and a smart operations team,” fellow board member Jason Lish, a former chief security, privacy and data officer at Advisor Group and current chief security officer with Lumen Technologies, said in a statement. 

“The financial services and wealth management industry needs innovative, yet usable, data governance and compliance solutions, and Surge is positioned to bring multiple innovative companies to market that address various facets of the data compliance conundrum,” he said.

After spending roughly the past decade with Entreda working on protecting firms like Advisor Group and about 300 of the largest brokerages and registered investment advisors from cybersecurity breaches, Yenamandra aims to invest in software that gives the industry the data tools it needs in areas such as compliance, storage and business applications. The Menlo Park, California-based firm views data governance as a “growing problem” that’s “only going to get worse over the next decade” as the industry’s legacy tech catches up with other fields while shielding the increasing reams of clients’ information and investments from risk, he said.

Surge can work with startups as an acquirer, co-founder or simply a provider of shared services assisting founders with issues like identifying the best market for their products, locating a capital provider and naming a board. Yenamandra compared the firm’s consultative services to those provided to financial advisors by brokerages and RIAs for compliance and operations.

“We want the entrepreneur out there focused on customers and products,” he said. “How do we solve the customer’s pain? Don’t worry about how do I incorporate the company in the right way and how do I do accounts payable and receivable.”