We seek opportunities
in underserved markets.
Our partners bring deep investment experience as well as finance, capital markets and legal expertise. We actively partner with executive leadership and the board to drive growth and transformative change.
Investing Our Money
The Partners have committed 50% of the Fund’s capital. We believe that a structured equity discipline mitigates risk while providing equity participation. Our aim is to better align interests, to mitigate risk of capital loss and to disproportionately reward the Founder and key employees for successful execution.
We are not a typical private equity firm generating large fees and primarily managing other people’s money. The partners in a typical fund commit 1%-3% of total capital.
We believe that we are thoughtful and sophisticated with the asymmetrical structure of our investments.
We strive to better align interests with the Founder and key employees of our portfolio companies. Our mission is to partner with driven and competent leadership to grow innovative and disruptive businesses.
Structured Equity (Take out this section and Graph)
Asymmetrical Risk and Return
Consumer-Oriented Focus (take out this whole section)
Consumer spending accounts for 68% of the U.S. economy. Enabling technologies and shifting consumer preferences are disrupting large market categories. Also, entrepreneurial, small businesses are reliant on B2B services to accelerate growth, to improve unit economics and to enhance the customer experience.
We intend to invest with passionate and driven entrepreneurs to build brands, to strengthen customer engagement, to accelerate growth and to achieve sufficient scale for operating efficiencies, and marketing heft, as well as to attract institutional private capital and strategic corporate investors.
Passionate & driven founder
Capable management team
Strong near-term growth
Attractive unit economics
Path to attractive net margin
Cogent strategy to achieve speed to scale
Our categories of focus:
Business Process Outsourcing
Why Small and Lower Middle-Market Businesses? Why Private Equity?
According to U.S. Small Business Administration and U.S. Economic Census statistics, there are approximately 30.2 million small businesses employing approximately 48% of U.S. workers. Of these businesses, less than 300,000 or 1% have revenues greater than $5 million with approximately 260,000 businesses having revenues between $5 million and $50 million.
Across nearly all long-term time horizons, private equity has outperformed the public markets and generated strong returns on both an absolute and risk adjusted basis. And, the middle market and lower middle market have consistently outperformed larger private equity investments.
As private equity firms have raised larger funds, many have focused on larger and later stage investments. We believe, excluding technology, life science and media, small and lower middle market growth businesses are underserved by institutional venture capital and private equity.
We believe that the small and lower middle market strategy better aligns the incentives of the General Partner, the Limited Partner, the entrepreneur and the portfolio companies. Unlike larger private equity funds, the management fees are allocated to offset SG&A expense... wealth creation is derived from successful exits.
Passionate & driven leadership
Depth of management team
Seeking growth capital
No prior institutional capital
Revenue: $5–$50 million
Market validation & differentiated market position
Step function growth
Sustainable unit economics
Path to attractive net margin
Compelling Risk Adjusted Returns (Remove this section & Graph)
Historical return data suggests that it is optimal to source the market’s beta in the most fee and tax effective manner, while sourcing alpha from the private markets.
We invest in Markets that are underserved by institutional capital
We invest in the heartland, as well as abroad
According to data from Pitchbook, 80%+ of venture capital investments in 2017 were invested in the San Francisco Bay Area (44%), New York City (16%), Boston (12%) and Los Angeles (9%).
By contrast, dynamic growth regions which are outside the VC/PE-focal markets are underserved by institutional capital.