Investment Philosophy

Our objective is to build leading businesses with great entrepreneurs. This requires that we partner with exceptional entrepreneurs on the one hand, and that we act as excellent investment partners on the other. Accepting private equity investment can be a big decision in an entrepreneur’s life. Often the decision to do so or not will depend on the stage of the business, the opportunity cost of not bringing more expertise and capital to the table, and the personal style and needs of the principal. Here are some things to know about the process; consider each carefully:

• We expect our entrepreneur partners to have the experience and maturity to understand our goals in working with them: we make money for our investors by investing in a company that grows in value and then seeks liquidity through a sale or initial public offering. This is a serious commitment and we communicate it clearly to our partners.
• We have a responsibility to support management through thick and thin, unless or until the decision is made to make a change in management. Changing management is always hard and considered carefully, but great management makes a great company. On the other hand, we support strong management teams through very hard situations.
• The most valuable assets we bring to a company are a strong rolodex, disciplined business practices, and broad experience. Capital is useful but dumb money is not.
• At any given time we play the role of advisor, devil’s advocate, cheerleader, or confidant; we are candid and supportive of management, but believe that performance counts, efforts less so.
• When an entrepreneur accepts private equity, from us or another firm, control of the company is afterwards dictated by performance.
• We seek to invest in companies with market-leading potential. Portfolio companies typically pursue large, yet well-defined, markets with emerging technologies and services. Winning companies usually have well-differentiated products and services that can address severe problems and capitalize on high barriers to entry.
• We will invest to help entrepreneurs attract the talent they need to grow their business: executives with successful track records, evolutionary vision, deep skills, tremendous energy, and who are adaptable to changing needs of the market. Some out-of-state executives will not move to Nevada to run a company that is not backed by a private equity fund, so we can often increase the quality of the team that the entrepreneur seeks.
• We demonstrate integrity in our business dealings and strive to develop deep, trusting relationships with our business partners. We welcome the opportunity to provide professional referrals to partners with whom we’ve worked.
• We invest most comfortably in those whom we know or get to know. Don’t be surprised if we want to spend time with you outside of the work environment.
• We believe that transactions should be structured to provide a solid long-term foundation for growth. Building valuable companies can take time, so we are committed to ensuring that partners have the support they need to grow in a sound business manner.
• Without excellent management teams, we will not succeed. We make sure that the managers and employees of portfolio companies are rewarded for their success with attractive profit-sharing and equity-based incentives.