You were a great find out here very

certain that you were going through
being over forty five years.

Welcome to the seat back at your life from
your capitol with us this morning for

those of you that are of any of the first
time he could be seen here is on you to do

the last year really the interviews of
the year that he's the young her and

all the outside and inside on
the Capitol in the in the goal there

was the bridge connection you
believe as well certainly ready

to go after here in the On one
visit event I was looking for

although not really personally but
when he goes out on the season and

he sees moving up here is your
land when you are in town and so

this is the group introduction
on the program is for us today.

Program but it's very warm and
cool happen and

it's very very five minutes meeting or
even more that all of us first and

then think you are there this formal
is the Power Point is it seems

that you're with your oldest and
your audience.

We're going to keep this interactive
also you have a small group already so

I just I'm going to go ahead and
ask and then love will make that said

well it's going to get in the middle
of it to a level that you'll thank you.

Also we go to because you know as you
did before but ended up in my life.

It was very right.

But it is all about where
the Congress without a background and

I got a little shirt.

Can you hear me.

I have mikes on but
I'm not holding anything.

Can I can't hear it.

So I guess I guess the best thing.

Career started when I was younger
I got interested just in that

basically investing probably in high
school I grew up in the Midwest.

I was a little bit of a Warren Buffett fan
and so I sort of caught this little bug.

When I was younger and I really at that
time didn't know that private equity or

venture capital investing really
existed or was accessible.

I didn't really know a whole lot about it
when I went to college I started to learn

a little bit more about it.

I had some classmates and friends
whose parents were in the business and

and so I started to see it as
a real alternative but but

you know I was I was on the East Coast and
I was in the Southeast and I never really

never saw a ton of activity there when
I got out of school I went to work for

an investment banking firm started to
build kind of my finance background and

happened to be in the right place at
the right time when Frontier Capital was

looking to add to its staff and joined on
and really for me the the catalyst was

that you know being a banker you know
lends itself to a lot of transactions and

sales processes but you're not really
engaged in building and creating and

being in it for the long term.

And so I was really missing that
opportunity like have an influence and

be around and be a part of something
that was growing and active.

So that's what really drew me
into the private equity world and

ultimately I left front here for
a while and

ended up working at one of our portfolio
companies for about two years so I spent

two years at one of our companies help
grow it as part of the management team and

and ultimately sold that or merged into
another company here in Atlanta as part

of that experience before coming back to
they got together about two years ago and

and I think if you were to ask
Mike Cody the C.E.O. over there.

It's one of the best mergers.

He's ever been a part of in and

that company has really taken off and
done great things.

Subsequently I.

As a V.P. of Finance and
strategy was my role.

So we have these two was your you

or yours and mine.

And yeah man.

He's just a simple guy you know I don't
know that I've got a claim to fame yet

there are probably some people in the room
here that do you know from a deal

perspective Lerch was was certainly one of
the things that I'm most proud of because

it was an opportunity that
a lot of people knew about and

maybe didn't see the potential and
we did up front here and

then to be able to be a part of it from
an investor as well as a management team

member was just a really neat
experience to go full circle with that.

So I'd say that's my favorite
deal claim to fame and

probably not not something
I'd ever say out loud so

you know below the that's right.

You know so I

guess that you're so
a frontier we're really looking for

we're looking for stablish companies that
are trying to accelerate their growth.

So we're looking for companies that
have already generating are already

generating four or
five million dollars of revenue or more.

And they've gotten to that stage and have
the opportunity of probably accelerate

that growth by investing in sales and
marketing maybe an acquisition or

you know expanding their
product offering and so

it's it's a little bit of a later stage
strategy we're not an early stage

investor we're pretty much focused on
services and software as a service.

So it's a little bit last technical
then then some other investors but

we find that at that gross stage there
can still be an exciting opportunity

to put capital to work to
help grow those businesses.

And really help them
scale versus get started.

So that's sort of us in a nutshell

typically looking to make kind of five
to ten million dollar investments

in the part of the view that with
what you're seeing then you're

going to be in your line is in
the piece running Yes So we.

I mean we're seeing good
activity in our marketplace.

I think that uncertainty has caused some
people to consider looking for capital

that would have been looking for capital
before so if you think about our profile

a lot of the companies are actually
profitable and they're established so

they're not necessarily in a position
where they have to raise capital.

So I think the uncertainty has
led some of those people to think

more about it in terms of
giving them some cushion.

You know strengthening their balance sheet
but also I think there's been a lot of

pull back and
you know the debt markets pull back.

You know people that we're going to
access that can't do that anymore.

I think some of the sale processes that
were going on have been pulled back on.

So some people that we're going to sell
have thought about hey maybe I can buckle

down and grow for another couple years so
I think the uncertainty and some of

the economic pullback has has created more
opportunity for some people like ourselves

for sure.

So we're that we're

you're ready for capital.

You know that's that's a stumper.

I mean that's a that's a hard question and
I think you know one.

The comments I hear regularly is you know
is there enough early stage capital in

Atlanta and and so I think you know you've

got to look at nontraditional friends and
family angels.

You know I always say you
go look at your customers.

You know there's a there's been a big
trend over the last five years for

people to want to raise
institutional capital right away.

Whereas I think historically
there's been more

interest in people you know getting their
customers to fund their business and so

I think you know you always got to
think about your customers and and

how can you get your customers
to fund your business.

So so I think in the early stage.

You got to be opportunistic and

scrap and claw until you can start to
build up some some success and at that

point I think your options start to open
up for you that answer your question.

Yeah those Yeah yeah.

I want to mark everybody's mind and
you can do that.

Yeah.
So I think in the short term

I think a lot of investors
have gotten more cautious.

So I think people are going to
pull back in the short term

you know I was starting to call
people before we sat down and

I think in the long term the the limited
partners that give money to

funds like myself I think are going to
pull back because they found themselves

over allocated to an asset class that
they're not as confident anymore so

I actually think this could create
a long term short a shorter or

smaller amount of capital long term but

in the short term I think it's more
of just a general pull back but

long term it could create
a systematic shortage of capital.

It's my buzzing.

I only have two mikes on is it.

Yes the shut off.

I don't want to ring during
during the questioning.

Yeah so.

So when we talk about
technology enabled services.

You know I'll go back to secure its local

Secure Works develop technology platform
to monitor security infrastructure for

at the end of the day I don't sell
that they deliver a solution.

It's twenty four by seven
monitoring solution.

So they've taken a piece of technology and

they use it to deliver a high value
service with a recurring revenue model.

We've got another company here in town
that provides physician billing and

business intelligence solutions
to physician practices similar

concept a combination of technology and
services of the liberal solution.

You know we've just found over time
that a lot of customers want a solution.

They don't want a widget.

And so you know the the portion of
the market we've decided to focus on

are finding those companies that are
providing that solution or they're taking

some technology using it to differentiate
themselves using it to drive margins and

and allow them to scale and building a
business around it versus going out trying

to sell the widget here

we're relatively regionally focused.

So we can't necessarily go out and.

For like the best you know best health
care practice management solution.

So what we typically do is have
some buckets that we like and

that we look at but because of our
regional focus we can't you know we're

looking at some things around wellness
right now health care wellness and

there's a big trend for
health care spending to increase and

we're looking at ways that companies
take control of the health care costs

we look at a lot of like nice
software tools where you can

go into an industry that's maybe not you
know a ten billion dollar opportunity but

you can you can get kind
of dominant market share.

You know capital with
a relative capital efficiency.

So we've got some opportunities in
the nonprofit sector that we're looking at

sort of under service sector where you
know software as a service is now late

enabling people to get in with cost
points that matter and makes sense.

So we're looking at the nonprofit
sector and then just continual

cost cutting services you know where you
can outsource better cheaper faster and

and save yourself money

is that what we know is
that this was the beginning

but I better check my notes
see number number seven.

That's that's not on my list.

No I you know I think
there's a couple things here.

I mean one is I do think that
venture capital raising venture

capital became kind of a buzzword and
everyone wanted to do it and

I don't know that everybody wants
to do it for the right reason.

So I think that's one is just you know ask
yourself Is this really the right thing

for me and my company and to is it just
that you know as a as an investor.

You know we have a stated strategy and
we're trying to follow that

state a strategy that's different than
some of the other investors in the room

different than some of the other investors
in town and so at the end of the day

I mean even if you've got the greatest
opportunity in the world.

You know it may not be appropriate for
me because I live in a box.

You know just like every entrepreneur
creates a focus on strategy and

I live in that box and I have to stay
in it and sometimes I think that

that entrepreneurs are so excited and
passionate about what they're doing

and they forget that other
people have restrictions too.

And so
that may be one thing that I've noticed

or yeah I wish I knew that we
might have to get up here and

ask him because he's you know he's got
he's got a lot more experience than I do

you know I think for us it's a combination
of the team and the business.

You know it's it's it's not one or
the other but

it's a combination of things come together
to allow good opportunity to scale.

So you know we don't just bet
on the management team and

we don't just bet on the business.

It takes a combination of people and
and solutions.

So I think it's just a combination of
factors I don't think you can boil it down

to one or two things if you see

this is when you see you.

You see the.

This is so you know I think you.

I think you got to know your audience

you know every investor is
a little bit different.

Some people are technical
some people are so

knowing that I think you have to
have a clear story with a hook.

I mean when we raised our foreign you know
we kind of came back and we said geez

you know the institutional piece can
really only remember one thing and

it was sort of an eye opener for us.

You know we thought you know tell that all
these great things that we're doing and

all these nuances about our business but
but at the end of the day you know after

an hour they really could only
remember one thing as for us it for

us it was it was stage it was the stage
that we were investing in it was somewhat

unique at the time and we raise
a fund a little over a year ago when

we closed out on it and you know I think
we're very glad that it was a year ago and

not now but but that and
then I think you know just you

know haven't had a clear focus on that
with the company three days ago and

they didn't have a million dollars
in revenue yet and they were Explain

to me how they were going to expand from
their current marketplace into four or

five others and provide additional
services to all of them and and

it just seem like man you've got this big
market in front of you want you want to

start dominating that you know first and
once you get that sort of Underbelly.

Let's start talking about moving out.

I think it's easy to to maybe try and
go broad too soon.

This is on

the

user.

Yes So
I think the one common thread across

our customers is that all their customers
are slowing down the buying process.

They're not stop.

But everyone's kind of slowing it down.

Maybe an extra level of
scrutiny on the expenditure.

So they're all seeing kind of
a slowdown in new new sales

the pipeline isn't you know disappearing
it's just kind of stretching out and

that's one common theme.

You know from an investor
side well what we've

seen is that the you know our best
companies are doing even better.

And they're using this as an opportunity
to gain share and gain position and

our companies that were doing as well.

Are doing worse.

So it's created.

You know separation of The Good The Bad
and then it's been interesting.

Some companies and
I think this is it is interesting for

us all to think about
is how do we use this.

How do we use this market
turmoil in our favor.

So is there something about you
know things that are going on in

the marketplace that
you can turn around and

use as a sales tool to help you
know help people with these

in terms of the like
they're being tactically.

Well I mean I think there

are some very basic blocking and tackling
things that we're trying to get more

prevalent in our in our
portfolio good planning and

reporting and I just think having a good
financial budget forecast that you run

the run the business off the numbers
versus off of your gut is key.

I was talking to another one of our
C.E.O.'s yesterday about creating

alignment between all the employees and
the kind of quarter two goals of

the company and he had found a new tool
that he wanted to use to do that and

so I think you know when you're
building a high growth company.

You've got you've got a lot of

dynamic things going on and it creates
some structure around that to focus

the energy as closely as you
can to the to the core goal.

The two or three core goals.

We've just seen that that really
can create a lot more momentum.

If you put some structure around that and
get everybody focused on the same few

things versus just kind of assuming that
everyone knows where you're going and

what's going to happen and
how they can contribute.

Yeah.

So we had one company or
two looking for exits.

I think there are some opportunities for
exits.

You know where we've seen the best
opportunities today are things that

are perceived to be countercyclical So

we've got some health care companies
companies where people are are interested.

I think there's a little bit of a flight
to quality so if there's you know

if you've got a recurring revenue solution
that's profitable and in the marketplace.

There's a lot of financial buyers for
those assets right now but

I think that there should be
fewer exits in the near term.

You know public exits are probably
going to go away again for a while and

I think when they all come back they're
not going to be as attractive and

I think we definitely had a little bit of
a window there were some people were able

to get out probably bigger
than they deserved but but

I think that's going to disappear for
a while you.

Thing with

without

the so I think some of the keys are in
a services business you have to be

differentiated enough where you
can have a nice for us margin.

So I think you know a low
margin service business

doesn't it just takes way too long.

So you've got to have something unique
about it where you can get your margins up

to you know we look for things that
are more recurring in nature than

project based so that you don't have
to refill the pipe every year so

that you know when you
finish the year at ten and

you sell another five you get fifteen and
so you go on from ten to five.

So I think you got a you had a look
at that and then we look for

things where it's not about
delivery is not necessarily

about a specific person because you have
to be able to replicate and scale it.

And so if you can use the technology
that's driving it or if you have something

where you know you can train a lot
of people to do it works and

you know tied up into like a specific
person you know those are things

where you look at you say well better
margins that helps make it profitable.

You know technology helps
at scale recurring revenue.

You know makes a big difference.

So we you know as an example
we invested in a call center.

I guess two years ago and
it's gone from fifteen million

to hopefully will do sixty million in
revenue next year but it's got some

of those characteristics it's got repeat
customers they come back year over year.

So when they add a new customer it goes.

They can scale because you know
it's easy to bring on new.

New people to deliver the service and

they're a little bit unique in
their market they've they found

a niche that they can play and where
they're unique enough that that they think

they can win business they can
differentiate themselves to win business.

So I think that it can be harder but
but it's definitely doable.

That answer your question.

Get off easy.

If there's no other questions like

this technology community and
some new markets readers.

Sure.

So we sourced things from I'd say
like Virginia down through Texas and

you know we we really
like the Atlanta market.

I mean I think what we're looking for

companies that have established business
and they're looking to scale and

I think Atlanta is a really good
market to scale a business and

because there's a lot of people
there's a pretty good economic base.

You can get talent.

So you can bring a lot of pieces together
that you need to scale a business you

know we compare like to Dallas Dallas and
Atlanta are very similar in that respect.

You know some of the other markets
we look at have more of that early

stage feel like Raleigh you

know we don't we don't feel like it's as
easy to take a business from five million

in revenue to thirty million in revenue
in Raleigh because there's not as much.

There's not much talent and

you know economic environment but
they do really good at sort of

that early stage capital get the ideas
going get them off up off the ground.

So I think it's it's different than
the other markets that we're in.

But we think it's a great market for
growing a big business and

and relatively big for this room I think.

And and we've we've made about twenty five
percent of our investments in Atlanta.

So we really like it was

probably a question about the early stage
you know what's that environment like so

you know in talking to people I think
that there's a couple things early stage

you know I hear a lot there's not enough
capital and I can't argue with that

I don't know there is a ton of early stage
capital and then the other thing that

you know somebody brought up that I
thought was interesting in addition to

the capital is there's there's plenty
of ideas and plenty of people.

There's not a lot of capital and

there are a lot of like
innovative anchor corporations.

So it seems like when Atlanta fosters
a big success it ultimately gets sold and

moves away.

And so we don't have you know this person
was saying we don't have the Googles

we don't have like the corporate tech
innovative companies that like continue to

foster and and build that environment
here in Atlanta and so you know

it's like you got half the ingredients but
not the fuel like we've got kindling but

maybe not maybe not all the fuel that you
need in terms of some of those corporate

resources as well as in the capital but
that's just you know what I hear

this word on the street is it accurate and
had not

yet more

than you

know it's really.

There's a perception in
the sort of community you

were you see some sort of
abuse on your time this was

our angels.

So I'm wondering why anyone would

see you in person.

There are two sources you know that's
going to be the numbers you're

going to get that next minute.

Yeah yeah I think it's true.

I mean if I sat here two years
ago we were looking to put two or

three million dollars in a company and
I think you know the more successful firms

have and
use that success to raise more capital and

make bigger investments in order to
generate more fees and and more returns.

So I think there's been kind of
a self-serving you know spot were

you know the people that can raise
the capital of raise more and

that void faster than people
have been able to fill it.

I think that that we're
seeing more we're seeing more

resurgence of like little groups
of of angels that get together.

Not necessarily like the technology
Angels where it's a formal open group but

more small private plasters
where you see four five people.

Together and do something and
we've also recently talked to a couple

people who want to start new sort of
thirty forty million dollars venture funds

where they can make those one or
two million dollar investments and

so I think that that gap has has widened
enough now where there are people that

are starting to look at can I fill that
because I think it's very obvious that it

exists now but I think you know
given the access to capital.

You know I don't know if those people
are going to be able to come to market.

So I it is it's a tough spot market
place that addressed the questions of

so we we've traditionally

Yes so are the debt players that are
providing working capital funding for our

companies are they starting to pull back
and what's going on in that marketplace.

So they are I think a lot of them
are we have traditionally done

a lot with the R B C R B C.

Right right here in this building has a
knowledge based industries group which you

know if anybody doesn't
know a great get to know

because they're focused on tech
tech enabled companies and

and they will lend to an early
stage company that's you know not

necessarily making a lot of money similar
to like a Silicon Valley or square one.

But the Canadian balance sheets Canadian
bank balance sheets have held up

a lot better.

So R.B.C. is really active in the
marketplace and they still provide a lot

of that to our companies you know
I think S.B. B. is still active.

You know I'm not sure about square one.

But there has generally been a pullback in
terms of what they're willing to lend and

we've had to do some guarantees.

We've had to put some
guarantees beyond some of those

some of those lines as well which
we weren't doing a year ago.

Is there anybody.

Execute go with that makes it easier for
you when you're there

you see with a company like
the company that makes it difficult.

I mean the only There's a couple
things that you know make it hard.

I mean that's where you've got some
really unique preference or structure or

something where you know it makes
it hard for us to come in and

have the access and control.

We would like to have but I mean I think
too is just remembering that you're in

you know if it's a it's a for any battle
you know when you're in anyone you've got

to keep thinking about ending to I mean I
think some companies got raise money and

some get really lucky and
raise it a really high valuation and

I think that's a you know perceived
as a huge positive initially but

over time that can become
a negative in that I can't paddle

on to something that's been out priced or
over priced if it was done.

You know substantially.

If you if you get too successful and
raise money at too high valuation and

you need to go out and raise more
I mean it could get in your way.

Ultimately So
I think you've got to keep in mind that.

What I'm doing now has to fit with
what I want to do later and and

making sure that each
time you take that money.

You show the value creation because
you know once you've taken capital.

If you don't create value for

your first set of investors your second
set of investors are going to have

a harder time you know believing
that's going to create value for them.

So you know creating value and keeping
in mind that that there's another round.

I think is important

about the reasoning we get
nothing wrong with that.

So I think it's a combination
of their their business itself.

So I think some of the project
oriented stuff is being hit harder.

You know you don't have
the same predictability.

But it also management.

So the better management teams
have made the moves early and

right and the teams that weren't as good.

You know maybe missed a few things and you
know put themselves in a worse position.

So you know comes down to business and
team again with

with the with the with with

with the with

the with yeah.

So so we get to know companies well before
they're ready for us so we believe in and

relationship relationship orientation I've
actually met with some of the companies.

So the people that are in here a for
you know I think when you're approaching

investors first thing you need to do
is try to get a warm introduction.

So find somebody that will vouch for you.

So that the investors are willing to spend
time because of that credibility and

then to just kind of knowing what you're.

Looking for.

So you know someone like myself who maybe
isn't a current target for an investor.

I'm happy to hear the story
hear what you're doing and

you know share some advice.

Maybe spend a half hour or have lunch and

con talk about what's going on and
provide options as possible.

More than happy to do that but
I don't have the time to dig in and

do a lot of work.

So it's a it's a matter of you know
getting that sort of introduction and

having a set of expectations around what
could this person help me with maybe

it's an introduction.

Maybe it's a referral.

Or maybe it's just some feedback on
my strategy and trying to go in and

get one of those things and and maybe
you know follow up every few months and

that kind of light touch model is easy for
somebody like myself and

I think it's helpful for
people for people in the room

so

we do a lot alone.

We make a lot of investments on our own
we don't have a lot of syndicates we have

found that some of our worst performing
investments had big syndicates and

it created sort of a lack of clarity and
so.

So we don't do a lot of syndicate
investing so I'm not I don't know all

the we typically invest behind
a lot of times it's personally.

Sometimes it's behind angels or
small institutions but but

we're not we're not syndicating out fifty
percent of every deal we do three or

four other people on lots of times we're
we're leading around by ourselves and

doing it on our own and

because the stage those companies are out
a lot of times they don't have a subset.

That would raise so.

So we don't do a lot of CO investing
with other kind of similar sized funds

as you know back to sort of strategy and
yeah.

So I mean.

So we in North Carolina we refer
things to Southern Capital Ventures

who I think is pretty plugged in here and
see I.D.F.

on up there you know down here

we refer stuff to us with capital.

It's more of a was an angel fund.

It's more of of an angel fun now for
ventures is a group that

has a similar strategy to us but wants
to write a slightly smaller check and

so you know we try and
you know referred out to people like that

but hopefully not too much the yeah it's

it's joyful J O E L at
Frontier Capital dot com

and I brought a stack of cards.

I probably don't have enough but
if anybody wants to email me or

my stuff on the website contact
me she knows where to find me.

Thank you.