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Our Strategy

The 1852 Advantage

There are tens of thousands of businesses in the United States seeking growth equity financing that are too small for traditional Private Equity and not early stage or sexy enough for Venture Capital. 

 

In 2021, the average PE fund size in the US approached $1 billion; the PE firms managing these funds need to deploy capital quickly and are not interested in managing a portfolio of hundreds of companies out of one fund. On the other side of the fence, VCs are looking for outsized returns to cover the other ~⅔ of their portfolio that they expect to go to zero. Thus, PEs and VCs pass on these middle-market businesses and the net effect is compressed valuations for this underserved market. ​

Our strategic objective is to identify and make growth equity investments in underserved small and medium-sized businesses (SMBs). We then create value by making strategic & operational improvements that drive growth of key metrics (typically revenue and EBITDA) and steer them upmarket towards higher valuation multiples, where we can attract interest from larger PE firms and/or strategics. This is a proven strategy yet most PE money remains upmarket.

 

Our strategy relies on a targeted approach that allows our LPs to evaluate specific small and medium sized businesses in markets underserved by traditional PE & VC and our ability to create value through strategic and operational improvements. 

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