IVCA Membership Profile: Svoboda Capital Partners LLC

IVCA Membership Profile: Svoboda Capital Partners LLC

July 19, 2017

Welcome to a new feature for the IVCA newsletter. Between relevant stories, the association is beginning a series of membership profiles, designed to connect VC and PE associates with both more information and the personality of the firms within the IVCA. The first profile is Svoboda Capital Partners LLC, a Chicago-based private equity firm investing in leading middle market growth companies in the business services, distribution and consumer sectors. The firm, currently investing its Fourth Fund, was founded in 1998, and boasts over 70 years of collective PE experience and extensive industry contacts.
 
IVCA Member Profile: Svoboda Capital Partners LLC
Representative: Jeffrey S. Piper, Managing Director
 
WHICH INVESTMENTS OF THE LAST COUPLE YEARS ARE YOU MOST PROUD OF AND WHY?
 
Svoboda Capital Partners: Well, I would say we’re proud of all of them. One that stands out is our recent investment we made last September in a business called Bully Pulpit Interactive. It’s a media buying and marketing services agency based in Washington, D.C. We’re proud of this investment because we were referred to the company directly based on a previous investment in the space, and our reputation preceded us, so we were able to close the deal very smoothly and at an appropriate valuation. We also aligned with the management team without having to go through a normal process, and in this type of market, that’s a significant advantage.
 
The business has great growth potential leveraging the principals’ relationships and networks, as well as proprietary technology and in-house expertise regarding campaign execution. The Company continues to see opportunity as technology and digital marketing continue to converge. The investment will also allow us to play upon our previous experiences, which is part of the reason they came to us in the first place. Last but not least, we simultaneously recapped that business and completed an add-on acquisition of a smaller agency in D.C. which expanded the services portfolio of the combined businesses and enhanced the Company’s penetration of corporate and trade association advocacy work. It was a complex transaction, but we were able to get it done on a timely basis, and in an attractive fashion. We are excited to partner with such a deep management team that is committed to developing a world class agency.
 
WHICH INDUSTRIES OR CATEGORY OF BUSINESSES ARE YOU FOCUSING ON, AND WHY ARE THEY A GOOD FIT FOR THE FIRM?
 
Svoboda Capital Partners: We focus predominantly on outsourced business services, and value-added distribution, with a third pillar being consumer products and services.

Our principals have been investing in these industries since the firm’s inception. Despite an apparent broad scope, we have niche sector expertise in each category, such as professional services with our investment in Bully Pulpit Interactive. Among our portfolio investments, we
are able to apply core business principles and practices, enhanced infrastructure and rigor, along with a shared philosophy driven ultimately by client service. Furthermore, we prefer to be the first institutional investor in each new investment situation. It is then incumbent on us to establish a rapport with management, demonstrate our value proposition to the team, and to structure a deal with strong economic alignment with a focus on growing the enterprise.
 
WHAT NEWS STORIES – PUBLIC OR INTERNAL – EITHER ABOUT THE FIRM OR AN INDIVIDUAL IN THE FIRM, HAS BEEN MOST SIGNIFICANT IN THE LAST YEAR OR SO, AS FAR AS PROMOTING AND ENHANCING WHAT YOU DO AS A FIRM?
 
Svoboda Capital Partners: We’re very team oriented, so it isn’t about any individual. We’re focused on driving activity in the market, and letting people know what we’re up to as an organization. That ends up being press releases around acquisition activity, both platform and add-ons, plus divestiture activity. Many of us will participate on panels or contribute to market commentary, but we always have the SC reputation in mind.
 
WHAT IS YOUR FIRM’S FAVORITE TEAM-BUILDING EXERCISE OR BRAIN-STORMING TECHNIQUE, AND WHY DO YOU THINK IT WORKS?
 
Svoboda Capital Partners: We do what a lot of firms do…we get together as a group on Monday and go through the portfolio and pipeline of new investment opportunities. This activity allows all of us to keep one another up-to-date with what we are seeing in the market, relevant conversations or meetings that were recently had, etc. However, two things we do as a group that are particularly helpful outside of the normal course Monday staff meetings...
 
ONE, four times per year, we will have partner ops meetings to discuss the portfolio in detail. We will also spend time discussing and brainstorming market trends... what we see in the industry sectors, where we should be focusing our investment efforts, where we shouldn’t be focusing our investment efforts and who from a marketing perspective we should be calling and keeping in touch with. These sessions are helpful to reset our focus given the group’s perspective and is a good team-building opportunity.
 
TWO, we will also meet three times per year with our Advisory Board, in addition to discussing all nearly completed investment opportunities. Our Advisory Board is comprised of very successful entrepreneurs, capital markets experts, and material Fund LP’s, and so their input and assessment of new deals and existing portfolio companies is very beneficial.
 
IF YOUR FIRM WERE TO BE CHARACTERIZED BY A WELL-KNOWN MOVIE, WHICH ONE WOULD IT BE AND WHY?
 
Svoboda Capital Partners: ‘Good Will Hunting,’ because we’re always in search of the truth.
 
For more information on Svoboda Capital Partners LLC, go to www.SvoCo.com.