The Exchanges

Q So Mike, if you bring what Chad said together to build a firm that can partner with companies serving this community and their certain sectors, CPG, supply chain, how do you turn that into an investment strategy?

A Yeah, Ted, our investment strategy centers around our belief that the economy looks much more digital in the decades to come. We often say here at the firm that the opportunity is big, it's early, and it's urgent. To be clear, we're more focused on the B to B components of this digital transformation and the growth stage technologies that are enabling this future of commerce. We define commerce across four distinct investment pillars. The first is how things are made. The second is how things are marketed. The third is how things are sold. And the fourth, ultimately, how things are distributed. When we think of how things are made, we think the technologies driving advanced manufacturing or the sourcing and procurement processes inside of large companies. When we think marketed, we think how new mediums like video commerce platforms are driving consumer engagement and how data is driving measurable outcomes for brands and retailers. When we think sold, we think social commerce, B to B marketplaces, fintech, Brand and price protection online and several more. And when we think distributed, we think first, middle, and last mile supply chain and logistics technologies.

AI assessment note: “our investment strategy centers around our belief that the economy looks much more digital”

Q You mentioned 15 slots for portfolio companies. How do you think about the construction of your portfolios in each vintage?

A There's inherent diversification as we talk about our pillars. These business are all very different and play differently in different cycles. We love the diversification that's inherent in our strategy. We're middle of the fairway for us would be if we're playing the alphabet game, a B or a C round, and that'll be the core of our portfolio. And we could go a little earlier or a little later. That's a extension round all the way up to a D round, but the core of the portfolio is going to be That B or C round company. And we're reserving naturally about 20% for follow ons in the portfolio. So we monitor that very closely and talk about it a lot because every pillar is not going to be equally represented, but they will all be represented in the portfolio.

AI assessment note: “core of our portfolio... B or C round... reserving naturally about 20% for follow ons”

Q Well, Mike, I'm guessing that in that blend of operating and investing that Chad's the operator, so why don't you bring me back in your path on the investing side?

A Sure, Ted. Yeah, so I used to wear a uniform too, not in the military service, but eGateways populated with a lot of former athletes, as well as seasoned folks from the private equity space. My background after playing basketball at a small division two school in Florida was I always wanted to be an investor. But I wanted to live in Cincinnati, and there weren't many investment firms in Cincinnati in the early 2000. We talked about brands earlier. I turned to a big brand at the time, Merrill Lynch, thinking it was an investment job, and quickly found out it was the ultimate entrepreneurial experience. But I learned a lot about investing there. I learned a lot about how to build a business and build a firm and what a good partnership is and what a not so good partnership is. So I learned a lot that's helped shape What we're trying to build here at eGateway through that process. Along the way, oh, eight, oh, nine happened. I really had a chance to pick my head up, look around and see what clients, the private client world deserved, what they were asking for, listening to the customer. And they were asking for things that I couldn't provide at Maryland. So I ended up leaving to go to the fiduciary model, spent time at an independent firm, and then launched a multifamily office platform with some partners. And we did a lot of very unique investing into bonds and direct investments.…

AI assessment note: “I turned to a big brand at the time, Merrill Lynch, thinking it was an investment job”

Q Mike, you said two things at the onset. I want to double click in a little bit. One is that you knew you wanted to be involved in investing. Where did that passion come from?

A I can't think of a job that would be more fun and really aligned with how I'm wired. As a naturally curious person, I get to spend time with and learn from some very interesting and incredible entrepreneurs and leaders, as well as go deep on themes and trends that are shaping the future of the economy to identify patterns. It's also fun to be different and take a stand, which is a natural part of being a successful investor. I also have a passion to serve and partner with others, and we get to do that every day with our companies. Lastly, I'm not sure if it's the athlete or the middle child in me, but I do love to compete, and investing to me is the ultimate form of competition. As much as I do have a passion for investing, I'm even more passionate about building an investment business, and all that comes with starting, growing, and nurturing a culture and a firm here at eGateway.

AI assessment note: “I can't think of a job that would be more fun and really aligned”

Q Mike, the other one is, you said you wanted to be in Cincinnati. Now, that isn't always something that pops the top of people's heads in the investment world, so where'd that come about?

A I'm a middle child from a large middle-class Catholic family in Cincinnati that was raised in the Jesuit education system where the motto was meant for others. And there's just this community component, the Midwest values, however you want to say it, that was, I always take the long view. This is where I wanted to raise my kids and build a career. And so it's just a special place. And I think all the people that we engage with, a lot of our investors today are from the region. But those that aren't, I think they're getting appreciation for all that we have to offer here in the greater Cincinnati area. It's very important to us, and I think through our efforts, we're trying to raise the profile of what's going on here in this corridor of commerce.

AI assessment note: “I'm a middle child from a large middle-class Catholic family in Cincinnati”

Q Let's turn to the investment process. Why don't you take me through it?

A Any great investment process starts with a great sourcing engine. We're excited about both the quantity and the quality of our deal flow. As it relates to our diligence process, of course, it includes all the standard legal, technical, commercial, and general deal diligence items. But the core of our diligence process starts and ends with, can we be the most impactful investment partner to the company? We go deep on getting to know the management teams and their leadership styles along with the company cultures. We always look for talent magnets in our companies. Ensuring alignment on the cap table and good governance at the board level is also very important, along with understanding the competitive landscape and talking to a lot of customers and potential customers about the companies. Ultimately, the purpose of our diligence process is to determine if we Truly have an edge that can deliver the outcomes that our investors are expecting.

AI assessment note: “starts with a great sourcing engine. We're excited about both the quantity and the quality”