As a holding company that starts, acquires, and builds businesses by investing capital, time, talent, and technology, we’re constantly exposed to the breathless headlines of venture rounds, soaring valuations, and the race to mint the next billion-dollar “unicorn.” The stories are intoxicating: two founders, one pitch deck, and—seemingly overnight—a market cap larger than the GDP of a small nation.
Yet behind the confetti and photo ops sits a sobering statistic: fewer than 1 percent of funded startups ever reach that fabled status, and an even smaller fraction generate durable, cash-flowing returns for long-term owners. We believe that outsized hype can distort decision-making, lure talent into the wrong battles, and misallocate precious capital. So we stepped off the carousel and chose a different ride—one with fewer flashing lights but a far sturdier track.
Unicorn chasers often elevate narrative over numbers. When sky-high valuations arrive before product-market fit, the company becomes a promise factory powered by spreadsheets of projected users rather than paying customers. The founders must raise bigger rounds at ever-steeper prices just to sustain momentum, while early employees pin their net-worth expectations to stock-option strike prices that may never intersect with reality.
Our filter is simpler: cash matters, margin matters, and profitable growth matters even more. If a business can’t trace a clear path to self-funded operations within a reasonable window, we politely pass—no matter how compelling the origin story.
The blitz-scale playbook teaches companies to “grow first, figure the economics out later.” That approach can work in winner-take-all markets with deep network effects, but it extracts a set of hidden costs that rarely show up on the Series B slide deck.
Rapid expansion forces head-count decisions at breakneck speed. Roles are filled for availability rather than mission fit, processes ossify before they’re tested, and a culture designed for twenty employees suddenly must serve two hundred.
The result is talent drift: brilliant individuals working at cross-purposes inside a company that can’t remember why it hired them. Cultural debt, like technical debt, compounds silently until a corrective rewrite becomes unavoidable—and expensive.
Each successive funding round dilutes existing ownership. Founders who began with controlling stakes often end up minority shareholders in their own creation, while early investors rely on a future exit multiple to justify the erosion.
And because equity is expensive, management teams layer on convertible notes, venture debt, or revenue-based financing to bridge the next milestone. Leverage piles high, optionality narrows, and strategic pivots that could have rescued the model become impossible under covenant constraints.
We aren’t anti-ambition; we’re pro-durability. Instead of betting everything on one shoot-the-moon venture, we assemble a portfolio of cash-flowing, defensible companies—some started from scratch, others acquired once they reach an inflection point. We set patient return goals, reinvest free cash into new opportunities, and allow each operating team to compound know-how across the portfolio.
A Portfolio Built for Long-Term Compounding:
We fund businesses to reach breakeven early. A disciplined cost structure lets them weather market cycles without emergency dilution.
We target niches where switching costs, brand trust, or regulatory hurdles protect margins. Even modest growth becomes valuable when churn is low and pricing power is real.
Finance, HR, legal, and data architecture live at the holding-company level. Portfolio CEOs can focus on customers and product while tapping best-in-class back-office support.
Founders roll significant equity into the holding company, receiving both liquidity and upside. Their personal wealth grows when the entire portfolio prospers, reducing pressure for hasty exits.
Public markets price perfection quarter by quarter. We can afford to nurse promising ideas through the messy middle, capturing upside that short-term investors overlook.
We track more than revenue curves and valuation marks. A healthy company should improve the lives of its employees, the resilience of its supply chain, and the satisfaction of its customers. When we exit—sometimes never—our yardstick is after-tax, after-inflation owner earnings, not the fireworks of a headline multiple.
Compounding may sound less glamorous than “blitz,” but the math is unforgiving: a stable enterprise growing at 15 percent annually will outpace a burn-heavy unicorn that flames out after five years. Patience lets margin expansion, brand loyalty, and operational efficiencies do their quiet work in the background.
In other words, we trade the adrenaline rush of unicorn hunting for the compounding serenity of durable businesses. The payoff may lack a confetti cannon, but it arrives predictably, quarter after quarter, decade after decade—and that’s the sort of magic we’re happy to pursue.
