Are you holding too tight on your equity when looking for deals? Maybe you shouldn’t get too hung up on valuation as an entrepreneur because if you get to a good outcome with the right partner, you will have plenty of money. What you should be doing instead is focusing on getting a partner that’s going to help you optimize your eventual exit.

In this episode of The Capital Stack, we have Sheldon Lewis, co-founder and managing partner at Blueprint Equity. He focuses on growth-oriented investments in payment processing, SaaS, internet, franchising, and business services. He explains what it means to be an early growth equity – a hybrid between venture capital and growth equity.

Listen in to learn why historical growth and margins are some of the major factors investors look for when considering investing in a company. You will also learn the difference between Multiple on Invested Capital (MOIC) and Internal Rate of Return (IRR) and the advantages of each in investing.

What You Will Discover:

·       [00:00] Intro

·       [1:27] Why Blueprint Equity considers themselves early growth sitting between venture and growth.

·       [4:20] How they operate as a minority investor – helping without forcing their opinions.

·       [8:15] Why Sheldon would give MOIC a slight advantage over IRR when it comes to ROI.

·       [12:41] The factors they consider when valuing companies, which include historical growth and margins.

·       [17:00] The importance of focusing on a trustworthy partner that’s going to help you optimize your exit.

·       [19:57] The benefits of having a concentrated portfolio for both the entrepreneur and investor.

·       [23:35] Blueprint Equity’s investment focus plus their sourcing strategy.

·       [28:03] He explains why they focus more on a business’s recent growth than its age.

·       [29:50] What it looks like being a general SaaS investor not afraid to try new things.

·       [31:05] Sheldon’s excitement about building a team and making great investments in 2023.

Memorable Quote:

·       “We are probably less focused on how old the business is as a whole and more focused on what the growth has been lately.”- Sheldon [28:04]

Connect with Sheldon:

LinkedIn: https://www.linkedin.com/in/sheldon-lewis-28274512