Private Equity Firms Want to Know: What are your values?

Welcome to part two of our three-part series, where we ask key private equity leaders how they consider an organization’s talent, mission and values when assessing investment opportunities. Today, we’ll focus on how consumer-focused private equity leaders evaluate an organization’s mission and values when considering an investment.

Where do the company mission and values fit within your consideration set?

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.”

“We are all about mission, vision and values. At Clifbar, our mothership, they are called the Five Aspirations. We look for companies that understand these already, or that are part of the way there and want to get all the way there. Research shows that organizations with clear mission, vision and values outperform ones that don’t have that dialed. It is what makes business meaningful, rewarding and profitable.”

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.

“We invest in companies and leaders when we believe an ownership mindset will be cultivated across all levels of the organization. Companies with a clear mission and strong values, and a pragmatic view of how those qualities drive growth, are very attractive to us. These companies frequently hold enduring values that are increasingly important to customers, community and investors. When a clear mission and strong values are in place, we use these touchstones as a way to evaluate leaders and we would not compromise on hiring someone who is not strongly aligned with company culture. When we see an opportunity to develop mission and values, we seek leaders with demonstrated capacity to build and inspire teams. This pretty much places mission and values among the most important criteria we evaluate in a leader.”

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.

“It is ultimately about authenticity. If the mission and values that the company stand for are part of the DNA of the brand, then that is tremendously important. Entrepreneurs often ask us if they should come up with a charitable cause. We think they should do what is natural and authentic for the brand, not just pick a charitable cause for charities’ sake. The main thing is that it needs to be real, something that the founder and the team truly believe in. It should be embedded in the DNA of the brand, not contrived to drive economics. It needs to be driven through a bigger meaning.”

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.

For more insight, read the first post in the series: How to be attractive to investors? Focus on talent. And stay tuned for our final installment to learn how these investors apply their own resources toward creating value in their portfolio companies.