IVCA Feature: New Member Profile of Plymouth Growth Partners

IVCA Feature: New Member Profile of Plymouth Growth Partners

March 15, 2017

The Illinois Venture Capital Association (IVCA) just keeps on growing, which is providing both expansive networking opportunities and continued advantages for the membership. The latest new member is Plymouth Growth Partners (formerly Plymouth Ventures), a Venture Capital firm that is adding value to growth stage companies in the Great Lakes region.
 
The following is a Q&A profile with Plymouth Growth Partners, which explores the firm’s background and their expectations for interacting with the IVCA.
 
New Member: Plymouth Growth Partners
Representative: Jeff Barry, Partner
 
IVCA: What is the background and history of Plymouth Growth Partners?
 
Plymouth Growth Partners: Plymouth Growth Partners – formerly Plymouth Ventures – invests in growth stage businesses throughout the Great Lakes region.  With over 100 years of combined investing experience, we take a flexible approach to partnering with management teams, helping to drive growth, build value and realize full potential. We focus on B2B product and services companies that have scalable technology and proven growth. Our team is hands-on and provides deep operational, strategic and financial expertise. We invest exclusively minority [non-control] capital with $3 to $8 million allocated per company. We’re based in Ann Arbor, Michigan, and we have over $100 million under management.
 
IVCA: Plymouth Growth Partners focuses on growth stage companies in the Great Lakes region. How is that niche distinguish PGP from other venture capital firms, and how do your strengths make it ideal for investors?
 
Plymouth Growth Partners: We take a lead role on the boards of the companies we invest in, and invest regionally for a reason...we like to be within a five hour drive of any company that we invest in, so we can be on site quickly if there is, for example, a potential Sales VP to be interviewed or just to simply have strategy sessions. 
 
Additionally, we will invest in two forms of securities – preferred equity and subordinated debt with warrants. This second vehicle is ideal for more mature, slower growth technology companies that are sensitive to the dilution that may come with an equity round...this offering is typically one of our differentiators.

IVCA: Since Plymouth Growth Partners prides itself on direct ‘hands-on’ interaction with their portfolio company investments, what area of development do you find needs direct action initially, and why?
 
Plymouth Growth Partners: We really like to see companies hit the ground running after a funding round. So as part of due diligence we collaborate with management to develop a ‘100-Day Plan’ –  in which we identify and develop work plans for a handful of initiatives that we believe creates value quickly, and instills a task-oriented discipline for the management team to create value. 
 
Since we invest in companies typically with $2 to $10 million in revenue, their products are usually pretty effective, even if they are evolving. However, their sales structures typically are not –  a decent portion of our investment often goes into developing a strong sales function. This is easier said than done, but it is almost always an area of focus for our new investees.

IVCA: When larger financing is necessary for growth-stage investment, you mention on your website that you co-partner with other like-minded firms, and that those various perspectives are vital during the due diligence and post investment process. What strengths do you find in differing perspectives in those two categories and any other parts of the process when co-partnering?
 
Plymouth Growth Partners: Similar to our ‘100-Day Plan,’ strong firms have unconventional aspects of due diligence that they can bring to the table.  For example, we take pride in the rigor of our customer calls – we do many, and do them in depth – and it’s just such an important part of out process. On the flip side of that, we have been impressed with other firms’ stress testing methodologies.  
 
In the post-investment process  – which requires board involvement – everyone has their own style. What we appreciate in board members from like-minded firms are those who take ownership of certain functions...whether its in developing bonus plans, sourcing a new COO or interviewing an investment bank...as opposed to simply receiving reports. We also appreciate collaborative board members that are able to bring operational expertise to support the executive management of the portfolio company.

IVCA: The region you focus on is in and around the Great Lakes. What is the biggest potential for the region post its primarily industrial past, and because of it?
 
Plymouth Growth Partners: We have always thought that the intersection of advanced manufacturing and new technologies would be the driver for high potential investments – it hasn’t really turned out that way.  We have seen an outsized amount of high potential SaaS companies over the past handful of years, which is somewhat surprising.  This trend hasn’t slowed.
 
In relation to the region’s industrial past, the inclusion of sensors to improve efficiency and quality in the manufacturing sector is growing, and we expect it to continue to be a high potential area. We also could say the same high potential is around SaaS software in manufacturing applications, such as supply chain monitoring.   

IVCA: What does Plymouth Growth Partners hope to achieve in their interaction with the IVCA?
 
Plymouth Growth Partners: We have been involved in the Illinois venture community for a while, with three good sized investments in the state, and felt it was time to have more formal interaction with local firms and service providers. Illinois is an important market for us, and we hope our involvement with the IVCA will allow us to continue to be a strong player in the community. 
 
For more information on Plymouth Growth Partners, go to www.PlymouthVC.com