On August 30, 2024, TDV Capital Partners finalized its acquisition of GrowFlow from Dama Technology. The acquisition was completed in partnership with GrowFlow’s management team - Rufus Casey, Carly Bodmer, Cory Shaw, and Tom Wilson.

On January 18, 2024, TDV portfolio company Peterson’s acquired RMC Learning Solutions. RMC is a leader in the project management professional (“PMP”) training space.

As our portfolio of companies slowly grows, we are increasingly focused on recruiting managers to lead these businesses post-acquisition. We’ve learned that the performance of a business is almost a direct function of the quality of the CEO who is leading it.

Private equity is mostly an asset management business. PE asset managers make money by charging a percentage of assets under management + a carried interest on gains after the return of capital.

In October, 2022 TDV acquired Syncplicity from Axway. Syncplicity is a file sharing and syncing solution for enterprises. The product is particularly well-suited to organizations in compliance-heavy environments (think: health care, government, finance) where security and access control are essential.

HubDialer is the leading provider of telephonic voter outreach software for political and social action organizations. These customers typically equip their volunteers or campaign staff with HubDialer to call whose votes are strategically critical to the success of a given campaign.

Scaling up. 

Managers obsess over it. Investors fetishize it. Engineers dream about it.

It’s the ambition of every tech company that seeks to arbitrage demand against the near infinite power of computer processors to reach Xanadu: 90%+ gross margins and growth capped only by market size. Yes! That’s what we’re all marching towards. Right?

Last month we closed on our evergreen “fund,” TDV Acquisitions (“TDVA”). TDVA isn’t a fund, per se. Initially, it’s actually a “blank check” company with permanent capital raised from private investors. TDVA will acquire software and digital media businesses. While in some ways it sounds a lot like a fund there are some meaningful differences.

The purpose of this long and somewhat meandering post is to try to distill some of the lessons we learned along our 4-year journey with the hope that it would be helpful (or at least entertaining) for others contemplating this path.

The first deal is the hardest. 

This is a common refrain in the independent sponsors/search fund community. In our experience, it’s true. In this post, I’ll discuss how our first deal, the acquisition of Peterson’s, came about, and the many challenges we faced on the path to close.

When Mo and I began talking about teaming up to buy a business, we had been friends for nearly ten years. We’d watched each other start businesses, change careers, get married, and in my case, have children. We knew our comparative strengths and weaknesses. Mo is a finance and analytics guy; my strengths are in product, sales, and marketing.

Triangle Digital Ventures has acquired the Peterson’s business from Nelnet Inc. The transaction closed on Dec. 31, 2017. The full terms of the deal were not disclosed.

 Triangle Digital Ventures (“TDV”) announces today that it has acquired Covideo, an Indianapolis-based software company, from APCO. The transaction is a partnership between TDV and Covideo’s founding team.

Meyer, the CEO/Founder of a SaaS business, was ready to sell the company.

But the offers on the table made no sense to him.

“The comps say that technology businesses like ours trade at 6-8x annual recurring revenue (ARR). I got an offer for 3x. Another for 4.5x. My business broker tells me it’s worth 6x. How can they be this far off?”

Karen was stuck.

She’d started her SaaS business over 4 years ago. Today, it has 3,000 customers and is doing a little over $2M ARR. She’d laid the first lines of code, hired a team, and raised about $1M through equity. The business is growing at about 5% a month, without a lot of churn.

Since forming Triangle Digital Ventures we’ve been busy talking with founders and investors. The goal of these conversations has been multi-fold, but primarily:

1) learn about as many businesses as possible; and

2) generate deal flow.

A VC once told me that “startups are bought, not sold.” Whatever the hell that means. 

If you believe what you read in TechCrunch, you’d be reasonable to assume that a burplap bag full of money will appear in reception exactly 36 months following launch. 

As entrepreneurs, we know the deal.

Success can mean a $500M+ exit, financial independence and the thrill of “making it” in the Valley. Others have done it - why not you or me?

Failure can be a swift shutdown and then a corporate job for a year or two. Sometimes the markets just don’t cooperate. 

But what happens when a business is somewhere in between success and failure?