IVCA Feature: The Best Quotes and Perspectives in 2014

IVCA Feature: The Best Quotes and Perspectives in 2014

January 7, 2015

2014 was a very good year for innovation and perspective in the Venture Capital and Private Equity industries, and these viewpoints were featured every two weeks in the online IVCA Newsletter. From the Toolkits and Educational Luncheons presented by the IVCA – with topics ranging from Social Media to Building Careers  – to the cutting edge individual profiles, the IVCA Newsletter featured a wealth of information and industry leaders, and highlights the best quotes from 2014...
 
“One of the situations we see today, that we haven’t seen in the past, is one Private Equity firm buying a company from another Private Equity firm. That’s very different from one corporation buying another – in that situation, the CEO should get everything vested immediately, because lord knows if they’ll have a job going forward. Maybe the CEO would set up in the plan that distinguishes between those two types of exit strategies. With a Public Equity buyout, it would be set up another way, which would be different than a corporation buyout.
 
I think why Public Equity has had success in the last ten years, is because they have the right view why a certain acquisition makes sense fundamentally, whereas a corporate acquisition of another company often has pitfalls in regards to hopes and dreams that don’t work out.”
 
~ Chris Morgan, Partner and Founder of Lantern Partners, at the IVCA Education Luncheon, “Strategies for Incentive Compensation at Private Companies.”
 
 
“Traditional industries are constantly being revolutionized through technology, and there is not even a distinction made any more regarding how the new benefits the old. For example, how access to music is now through download or how movies can be ‘on-demand’ through cable providers, the technology went hand-in-hand in providing those new delivery systems. And when looking at manufacturing, the distinction in the word ‘digital’ will eventually fall away, because it will be inherent in all aspects of manufacturing. Whether in traditional or emerging manufacturing companies, all will be embracing new digital technologies.”
 
~ Caralynn Nowinski, Chief Operating Officer for UI LABS, on Facilitating Chicago’s New Digital Manufacturing and Design Innovation Institute
 
 
“Don’t let the things that you’re not permitted to do discourage you from starting. You can absolutely talk about your firm, you can absolutely talk about why you invest at the various stage you invest in, why you focus on the verticals, and you can start to comment on trends in the industry in which you yourself have expertise.
 
The internet is a call center. There is so much data out there, that people are searching for, that it’s best to use analytics, use evidence and use data to figure where the executives for your fund congregate, what is on their minds? Who are the leading bloggers? Maybe you can comment on their blogs. In other words, find where people are and be where they are, and say things that are of interest to them, and suddenly you become an expert. Because every entrepreneur is interested to someone with access to capital.”
 
~ Jeff Zilka, Executive Vice President and General Manager of Financial Communications of Edelman Chicago, at the IVCA Toolkit Event on Social Media, “Brand Building for VC & PE Professionals Including How Registered Investment Advisors Can Participate.”
 
 
“‘1871’ is an amazing experiment where the city, state, private sector, schools, non-profit organizations and many more have come together to create an environment of innovation, excitement and progress that is reflective of what we see outside the walls of 1871. The tech economy in Chicago is thriving. We are seeing growth across the board, in every sector of the technology economy. We are seeing massive success stories, like Braintree and Grubhub. Also large tech corporations like Motorola Mobility are moving back into the city and companies from around the nation are coming here. And we are seeing companies across Chicago and Illinois raising money, creating jobs, acquiring customers and looking to the future. We are very encouraged.
 
~ Tom Alexander, Chief Operating Officer at ‘1871.’
 
 
“The first myth is that you can’t make money in the Midwest. In association with that there was a study that looked at success through investments in companies rather than funds. It turned out that the Midwest tech companies had the highest rate of return of any region. We have the GDP, the customers and the success.
 
The second myth is that there is no tech talent in the Midwest. Hogwash. Most of these name tech successes began in the Midwest, and they moved them to Silicon Valley. And are there computer scientists here? 25% of all CS degrees in the U.S. are actually given in the Midwest. Carnegie-Mellon, University of Michigan and University of Chicago are top schools here, to name a few. And you have engineers in all these amazing organizations.”
 
~ Mark Kvamme of Drive Capital, Featured Speaker at the IVCA/NVCA Luncheon
 
 
“I think the IVCA deserves a lot of credit. They release a brochure entitled ‘How a Private Equity or Venture Capital Fund’ works. I’ve handed that out, it’s great and very helpful information for legislators. That matters. Plus, you need to let your legislative representative know who you are, and you want to become a resource for them. You don’t have to be a full time lobbyist, you don’t have to be a lawyer, but you do have to tell legislators what you are doing in the industry. Congress wants to have a better relationship with you, so I encourage you to tell your story. The best stories are from gatherings and groups like this.”
 
~ Brett Palmer of the Small Business Investor Alliance, at the IVCA/NVCA Annual Luncheon
 
 
“The two things I look at is one, the stage of the business, which is critical to the people you have. A person can rise as the company grows, but the odds of that person doing it successfully are slim. The person that is great at the 10-20 million level, might not be able to go beyond that, and you shouldn’t look at them as a failure.
 
The other thing that is critical is culture. As the CEO you drive the culture. You either have to adapt and like the culture you have, or you have to change it. There are certain things I look for that I want to see in terms of values, and the willingness to take risks. With those risks will come mistakes, but if you don’t take any risks, you will get lapped in competition. If my executive staff makes logical decisions, they’ll be right more than they’ll be wrong. That is what works for me.”
 
~ Michael Alter, CEO of The Tie Bar, at the IVCA Toolkit Event, “Developing Top C-Suite Talent.”
 
 
“Even at the pre-MBA level, we value folks who are very well rounded. We want individuals who can engage with CPOs, investment bankers, consultants and industry professionals. The reality is it’s easier to work with a pre-MBA that has high productivity and creates models and industry analysis, and gets it done. It’s no secret that folks that are better on the analytics – quantitative and otherwise – tend to do a little better at the associate level, although those skills can become less relevant over time.
 
As a person matures in a firm, the relationship building and the judgement skills – those intangibles involving people and investments – become a bigger factor than the analytics. It’s also about investing the time to make a deliberate effort to work through any shortcomings. If a person is willing to do that, and they are willing to own their professional value, they can be successful.”
 
~ Sean Cunningham, Managing Director at GTCR, at the IVCA Educational Luncheon, “Building a Career in Private Equity: Different Routes to Partnership”
 
 
“There is a lot of capital out there. Hedge funds are getting into the marketplace as well, investors are looking for things that are not corollated to the market. So because there is all this capital out there, firms like ours has to put all of this debt to work. There is better pricing and better deals for portfolio companies, and Venture Capital and Private Equity firms that are using that debt.
 
In terms of covenants, we are seeing pressure on pricing. We’ve started to do things that have attributes of Venture debt, even from a Private Equity perspective. So interest only, which I think was just a Venture Capital term, has now made its way a little bit into Private Equity, So we’re doing deals with those components as well. Bottom line, it’s a really good time to borrow money.”
 
~ Mark Solovy, Managing Director of Technology at Monroe Capital, at the IVCA Educational Luncheon, “Trends in Debt: Providers, Terms & Structure”
 
 
“GrubHub has always viewed investors as strategic business partners, and we were lucky enough to find some close to home with Origin Ventures. In terms of securing financing, we knew we first needed to solidify and prove out our business model. Once we had done that, and outlined a plan for scaling beyond Chicago, Origin was able to see the value we offer diners and restaurants.”
 
~ Adam DeWitt, CFO of GrubHub, 2014 Recipient of the Venture Capital Portfolio Company of the Year at the IVCA Awards Dinner
 
 
“It is obviously a tremendous honor for our team. We have seen so many good venture-backed companies come out of Illinois, and to be considered in those ranks makes us stop and want to soak it in for a moment. I have presented our story to many of the people in the association over the years, and many have became good friends and advisors. There was much less of a community when I started the firm 15 years ago, and I’ve enjoyed seeing the local ecosystem of investors, entrepreneurs and advisors emerge and grow together through the IVCA, in addition to finding each other right in our backyards instead of always looking outside the state.”
 
~ Jai Shekhawat, Founder and CEO of Fieldglass, 2014 Recipient of the Private Equity Portfolio Company of the Year at the IVCA Awards Dinner
 
 
“My contributions to our community don’t compare to the magnitude of Mayor Richard J. Daley. However, I invest time and financial resources to build companies in Chicago, as well as non-profits focused on education and the arts. So, there are some interesting parallels that make me feel very connected to the leaders that came before us.
 
I was very blessed to be able to grow up learning my family business. The deep respect I have for entrepreneurs was nurtured by my experiences at Quill Corporation. From the time I was very young, I’ve had appreciation and admiration for everything that entrepreneurs accomplish. My father and uncles set the standard by which I judge myself, and the founders with whom I have the privilege to collaborate.”
 
~ Steven Miller, Partner and Co-Founder of Origin Ventures, 2014 Recipient of The Richard J. Daley Award at the IVCA Awards Dinner
 
 
“The strategic guidance and governance at the boardroom level is probably the most rewarding aspect of what we do....We bring a valuable sense of perspective and broad experience of handling similar business problems across a number of companies. It is also the relationships that we bring to bear – both in recruiting well connected independent directors and providing resources for tackling specific challenges.
 
I believe that the most critical role of the IVCA is advocacy, speaking when appropriate with one clear voice to our Illinois legislature and the media. We are not an industry that needs much, so the IVCA has focused on fending off the unintended consequences of otherwise well meaning laws, and educating the legislators and the general public on exactly what we do, and how important it is to the Illinois economy.” 
 
~ Darren Snyder, Partner at Prairie Capital, 2014 Recipient of The Fellows Medal at the IVCA Awards Dinner