IVCA Feature: New Member Profile of SSM Partners

IVCA Feature: New Member Profile of SSM Partners

October 25, 2017 

The core of the Illinois Venture Capital Association (IVCA) is its membership, and that network just keeps growing. This creates opportunities for the membership to interact, to learn from each other and to forge a singular voice for issues that concern the venture capital, private equity and support industries – and that voice gets stronger with each new addition. The newest member of the IVCA is SSM Partners, whose focus is on growth equity, investing is great businesses that have been around for awhile and that have a need for a partner or capital... or both.
 
The following is a Q&A profile with SSM Partners, which explores the firm’s background and their expectations for interacting with the IVCA.
 
New Member: SSM Partners
Representative: Hunter Witherington, Partner
 
IVCA: What is a brief history and background of the SSM Partners?
 
SSM Partners: SSM was founded in 1973 as a financial advisory and consulting firm, advising entrepreneurs and management teams on how to grow their businesses and create value for shareholders. We’ve worked with several household names including AutoZone, Federal Express (now FedEx) and Holiday Inn, as well as numerous family-owned businesses. 
 
In the early 1990s, SSM transitioned the firm to focus on principal investing, and raised its first venture capital fund in 1994. Since that time we have partnered with, and invested in, approximately 60 companies. We have sharpened our strategy over the years to focus on growth equity investing, which we define as high-growth companies with $5 million or greater in revenue, with a focus on B2B software and healthcare IT businesses.
 
IVCA: Why did the firm decide to join the Illinois Venture Capital Association?
 
SSM Partners: We have been actively investing in Illinois – Chicago and its surrounding areas specifically – for the last five to six years, and thought that joining the IVCA would be a great way to support the venture capital community, expand our network of relationships, and show our commitment to the Illinois market.
 
IVCA: Your concept of ‘team’ on your website is highlighted essentially. How does the philosophy of the ‘great team’ permeate the mission of SSM Partners?
 
SSM Partners: Looking back at our 20-plus year history of investing, the single most important factor for our success has been the quality of our team. This starts with the CEO and expands to the broader management side, and ultimately to every employee in the organization.  We look for leaders that cast a clear vision for the company and set goals that are shared across the organization, who also focus on hiring A-list players, hold their team accountable for those goals and create an irresistible workplace where employees are valued and empowered. 
 
Given our focus on the team, our core values and investment principles, which also can be found on our website [see below], those elements are centered around supporting our entrepreneurs and management teams by prioritizing their success and communicating transparently, in addition to being diligent, creative, and loyal.
 
IVCA: Vetting a company to invest in becomes more and more complex in this era of commerce. How do you think SSM Partners take that vetting down to the simplest and core characteristics, and how has that instinct paid off?
 
SSM Partners: We do focus on the CEO and the management team members to understand their experience and qualifications, but also how they lead and manage the organization. In addition, we focus on understanding a company’s unit economics... which is defined as the lifetime value of a customer, and the cost to acquire and deliver the product/service of the company to that customer. We also seek to understand the value proposition that a company offers to its customers. For example, how critical is the company’s product/service to its customers, how sticky is the solution, how differentiated is the company versus its competition, etc.? When these characteristics align, we enjoy tremendous success. 
 
And in terms of how that has paid off – we are grateful to the entrepreneurs and management teams that have made us successful for those over 20-plus years, and six investment funds.  We hope to build on that history of success for many years to come.
 
IVCA: With technology changing at a lightning pace currently, do you think there is more potential for fixing or improving current tech or investing with innovations that have potential for the future, and why?
 
SSM Partners: Technology is changing rapidly, and we believe that organizations must continue to innovate and improve their existing software, product, or service to stay ahead of the competition, and deliver more value to customers. However, just because a company utilizes the latest and greatest technology – for example currently, it’s perhaps Artificial Intelligence or machine learning – doesn’t mean it’s a great company or investment opportunity for us. We want to understand how that technology is being used to solve a critical business problem, and making the solution integral for their customers.
 
IVCA: What does SSM Partners hope to achieve in their interaction with the VC/PC community within the IVCA?
 
SSM Partners: Our hope is to build new relationships and strengthen our existing relationships within the Illinois investment community, so that SSM Partners becomes well-known as a “go-to” investment firm for high-growth B2B software and healthcare IT companies. Our goal is to partner with more companies and invest more capital in Illinois.
For more information on the SSM Partners, go to www.SSMPartners.com