How to Be Attractive to Investors? Focus On Talent.

In our latest three-part series, we ask key private equity leaders how they consider an organization’s talent, mission and values when evaluating investment opportunities. In this installment, we focus on how talent at the leadership level and across the team communicates potential for success to investors.

How important is the executive/leadership talent when evaluating investment opportunities?

Wayne Wu, Managing Director, VMG
Wayne Wu is a managing director and partner at VMG. He and the VMG team are excited to partner with the next generation of innovative, consumer product entrepreneurs, helping them to fully realize their founding vision to build iconic brands.
“Great brands are built by great teams. I wouldn’t limit it to just executive talent. That goes from Founder and CEO to the most junior ranks. The organizations that are successful take pride in getting hardworking, enthusiastic A players across the organization. With our VP of Talent, Cassie Nielsen, on board to lead that area of talent, she has played a critical role in creating a more systematic process of ensure we have rock stars in all roles and are hiring right the first time. She is proactive in meeting great people that can help us in the future, so we can hit the ground running with a fully built-out team as soon as possible after an investment closes.”

Gregg Bagni, Partner, White Road Investments
Gregg Bagni is a brand, marketing, product geek with a street PHD and deep knowledge around what he likes to call “enthusiast brands.”
“The people are paramount. We may see an interesting product in a new category that may catch our attention, but if the people behind it aren’t the ones…we’ll respectfully decline. We might be evaluating a burgeoning brand that is only one or two folks, so the connection to the people is critical. We’ve worked with brands before where it’s a pretty bare bones crew, think the founder and a few others. It’s cases like these where we like to use our networks, colleagues and friends to fill out the team to get it to pro-status.”

Scott Donohue, Partner, NextWorld Evergreen
Scott Donohue is a partner with NextWorld Evergreen. Prior to joining NextWorld, Scott was COO of MVP Capital, an investment bank focused on the TMT and renewable energy sectors. His earlier experience was as the founder and CEO of five venture-backed companies in the wireless and media sectors. Additionally, Scott served on the senior leadership team at Year Up, a nationally recognized social enterprise focused on training young adults for jobs with leading companies in the U.S.
“Generally, we would prefer to have great management in the companies we work with, where our investment and their talent combine to unlock great value.  However, it’s fairly common that leadership transition is the reality in many investment opportunities, because the company has reached an inflection point in its growth or a founder is seeking an exit.  We need to be nimble in our assessment of the capabilities of the leaders in a company, and willing to engage with them and other stakeholders to be forthright and constructive in sharing our belief of what is best for long term value creation. We consider it a core competency of NextWorld to ensure that executives leading our companies can drive responsible growth and long-term strategy, and we also consider it critical that all of the stakeholders are engaged in the process appropriately when new leadership is needed. Whatever the circumstances, it is almost a cliché that the right leader for the company is critical, and clichés tend to develop because they reflect reality.”

About the firms

NextWorld Evergreen is a San Francisco-based investment firm focused on providing growth capital to the consumer sector, with a commitment to the natural products category particularly in the areas of beauty, food, and beverage. The firm operates from a unique structure with $400mm of evergreen growth equity. They are committed to building durable brands, and align with entrepreneurs who value a long-term strategic perspective. Examples of NextWorld’s current and past investments include Steven Smith Teamaker, Alter Eco Foods, Peet’s Coffee and Tea, and Credo Beauty.

VMG works intimately with founders and leaders of branded consumer product companies, providing the resources and guidance needed to propel them to their next level of growth and value. Beyond capital, VMG’s value-added investment philosophy commits our deep experience, strategic guidance and passionate focus to help their partners accelerate growth, brand awareness and achieve their own definition of success. VMG has worked closely and successfully with brands such as Ancient Nutrition, Babyganics, Drunk Elephant, Humm Kombucha, Justin’s, KIND, Nature’s Bakery, Perfect Bar, Pirate’s Booty, Pretzel Crisps, Quest, Spindrift, Stone, SunBum, and Vega to name a few.

White Road Investments funds brands with a mission, like The Honest Kitchen and Herb Pharm. With Clifbar as the mothership, they strive to identify and invest in the best emerging, values-driven businesses. Their focus is on partners that continue to innovate consumer products and promote the lifestyle of health and sustainability–for people and planet.

Check out part two of the series, Private Equity Firms Want to Know: What Are Your Values?, where we look how company mission and values enter the decision making process.