This week I am talking to my man crush Sheldon Lewis of Blueprint Equity. Sheldon runs an early growth equity Series A show that focuses on B2B recurring revenue businesses with great economics. He also had this thesis BEFORE it was cool. We talk valuations, Series A metrics, and how to find the right investment partner. You can watch/listen to the podcast on YouTube, Apple, or Spotify.
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:
