Selecting a capital partner can be one of the most significant and impactful decisions an entrepreneur makes. In most cases a growth investor will be an active voice in company decisions and, for better or for worse, can guide the direction of a business over the course of multiple years.
Add to this the fact that the universe of growth stage investors--from venture capital and traditional growth equity to more esoteric alternatives--has exploded over the last ten years and many entrepreneurs are left scratching their heads on how to approach the process.
The good news is that the market for growth capital is large, diverse, and presents multiple options. However, a successful entrepreneur needs to ask the right questions when approaching the process of choosing a partner.
GrowthCap recently published its 2017 list of 40 Under 40 Growth Investors that features investment professionals that have differentiated themselves from their broader peer set and represent the most exceptional professionals in the field of growth investing.
The following 5 growth investors are exemplary of those featured in GrowthCap's 2017 ranking and have differentiated themselves in their approach..
1. Nehal Raj, Partner, TPG
Nehal joined TPG in 2006 and currently runs the firm's Technology investment practice globally. Nehal's responsibility covers large check technology private equity, traditional growth equity, and social impact investing deals.
Over the course of his career at TPG, Nehal has completed 15 investments across the firm's Capital, Growth and Rise funds. Nehal is currently a Director of C3 IoT, Domo, EverFi, Mediware, Noodle Analytics (Chairman), Sutherland Global Services, and Zscaler. In addition to significant investment activity, Nehal has successfully exited several investments with impressive returns on invested capital.
He previously served as Director of Aptina Imaging (acquired by ON Semiconductor), CCC Information Services (acquired by Advent International), Decision Insight Information Group (acquired by CoreLogic), IMS Health (public), Intergraph (acquired by Hexagon AB), and Symbility Solutions (public).
Nehal's success can be attributed not only to his deep understanding of the software space -- particularly in the areas of healthcare IT, security, big data, AI, and IoT -- but also to his distinct hands-on partnership approach with portfolio companies.
Investment focus: Traditional private equity buyout and growth equity opportunities within the technology sector.
2. Bob Nye, General Partner, JMI Equity
Bob joined the JMI team in 2005. With deep expertise in software across a variety of segments, Bob has completed 10 deals representing in excess of $330m of invested capital throughout his career.
Bob has also successfully exited 6 deals -- where he played a critical role in providing strategic guidance to management teams to help drive value -- for returns topping industry averages. For example, Bob helped a prior portfolio company recruit an experienced management team, quadruple revenue, transition to a recurring revenue model, and eventually sell to a publicly traded buyer at an attractive valuation.
Bob currently sits on the boards of Adknowledge, Benevity, Higher Logic, Level Access, and the Mid-Atlantic Venture Association.
Investment Focus: Growth equity opportunities in software.
3. Han Sikkens, Managing Director, Summit Partners
Han joined Summit Partners in 2004 and today leads the firm's European investment efforts as the head of Summit's London office. Since 2004, Han has invested nearly $1 billion in capital in 11 companies.
He works with companies across the technology sector with specific focus on identifying category-leading, high-growth businesses in enterprise software, cybersecurity, Internet and financial technology.
Han's investment experience includes companies such as Avast, Darktrace and 360T, and he has developed a deep understanding of supporting growth stage businesses as they aim to expand beyond their domestic markets and establish a global presence.
This thesis was executed in Summit's investment in Flow Traders, which established 24-hour global trading capabilities prior to completing its IPO on the Euronext at a market capitalization of more than €1.6 billion in 2015.
Investment focus: Growth equity opportunities in financial technology, cybersecurity, and enterprise software.
4. Jenny Baxter Moser, Partner, TSG Consumer
Jenny joined TSG Consumer in 2007 following completion of her MBA at Harvard Business School. She previously worked at Bain & Company in a strategy-consulting role.
While Jenny works across a range of consumer categories at TSG, she has developed deep experience in the areas of beauty, apparel, and e-commerce. She has taken an active role in building out TSG's digital advisory network, strengthening the firm's existing sourcing efforts, and serving as a mentor to junior level employees.
Over the course of Jenny's time at TSG, the firm has successfully raised three funds including its current fund, TSG7, with roughly $2.5 billion of committed capital.
Jenny has been personally involved in TSG's investments in Smashbox Cosmetics, Dogswell, Kenra Professional, e.l.f. cosmetics, Paige, Alexis Bittar, REVOLVE, and Backcountry.
Investment focus: Growth equity opportunities across a range of consumer categories.
5. Dominic Ang, Founder, Turn/River Capital
Dominic founded Turn/River Capital in 2012 following roles at Vector Capital and Advent International. Turn/River was founded with a distinct focus on investing in high-growth SaaS companies and helping them drive additional scale through optimizing marketing, pricing, sales, and renewals.
Over the course of his career, Dominic has completed more than 15 deals representing over $500 million of invested capital. Since inception, Turn/River has generated returns that position it at the top of the growth equity asset class.
With significant traction in terms of new investments and exits, the fund will likely continue to outperform peers while providing impressive outcomes for growth stage companies.
Investment focus: Growth equity opportunities with SaaS businesses who could use assistance with sales and marketing.