FTV VII: 7 Principles that Got Us Here and Guide Us Forward
We’re happy to announce FTV VII! Totaling $2.3 billion in LP commitments, this new fund allows us to carry forward the mission we’ve advanced for 24 years:
Partner with the most innovative, high-growth companies that are reshaping industries and help them accelerate growth.
Since 1998, our disciplined and focused growth equity model has enabled us to raise $6.2 billion, partner with 130 founders and generate over $6 billion in realizations for our investors. And since 2020 alone, it has fueled record momentum with liquidity events generating $3.2 billion in value and $1.5 billion deployed since activating our sixth fund.
With each new fund we make it an intentional practice to reflect on what drives our success. One of the things I love most about our team is that we constantly push ourselves to evolve and get better at our craft so we can drive exceptional results. Among the many lessons we’ve learned, we come back to seven fundamental principles that underpin our success, differentiate our approach and guide us moving forward.
1. Deepen domain expertise to establish a powerful competitive advantage
For our entire history we’ve focused on sectors where we have significant experience and a proven track record – financial services, payments and enterprise technology and services. Rather than becoming generalists or extending into new areas of focus, we’ve built success by leveraging what we know well.
Many of us have spent our entire careers dedicated to understanding the pain points and opportunities facing 21st century enterprises, using the lens of the financial services industry to deepen our knowledge and develop unique acumen. Portfolio company CEOs consistently tell us that they choose FTV for our deep understanding of their business in the context of their specific corner of the market, giving them a huge leg up in achieving market leadership. Furthermore, successful past investments inform future investments, building momentum in our focus areas and paving the way for subsequent successful investments.
2. Develop the best investors by involving them in the full deal lifecycle
Entrepreneurial. Scrappy. Industrious. These words define our culture and ethos. We are people who roll up our sleeves and get in the trenches right alongside management teams. It’s what makes this job both hard and exceedingly rewarding.
But what’s also unique about being an investor at FTV is that no matter seniority or tenure, all investment professionals participate in the complete lifecycle of a deal. This means that associates through partners build their own unique disciplines, developing perspectives on themes; building networks; diligencing and executing deals; and actively contributing to company building via board leadership and engaging with management teams.
3. Build relationships early with focus for the long-term
We make the biggest impact when we get to know management teams early. Most often we establish these relationships over the course of several years, well before the company needs financing. In our most recent fund, FTV VI, we knew our companies for at least three years on average before making an investment. During our courtship, we look for ways to align our interests and add value.
4. Cultivate commercial networks to unlock potential
Twenty-four years ago, our founders had the idea to tap into their industry networks of leaders, decision-makers and innovators within financial services as a means to understand the priorities of large enterprises and shape investment theses. Part of the original vision was also to access this network to help portfolio companies with strategic and commercial introductions into large financial services enterprises.
In 1998, this idea was actually pretty novel, and we invested in it from day one, institutionalizing every aspect to ensure that our Global Partner Network® (GPN) remained robust. Today, we count over 500 commercial relationships across more than 150 leading enterprises. Annually, we facilitate more than 400 commercial and strategic introductions between portfolio companies and GPN executives, and we’re accelerating these efforts each day.
5. Scrap playbooks for scaling growth
We take company building seriously and bring proven experts to the process across the most critical areas of high-growth company operations – talent, business development, sales, go-to-market, marketing and technology. Called FTV Propel, it’s a highly focused team of seasoned practitioners who assist portfolio companies daily.
But, every company is unique. While all of our portfolio companies share similar growth characteristics and potential for rapid scale, their opportunities, challenges, approaches and personalities differ. So, we take a customized approach. No playbooks. We assess each company individually and collaborate with management to determine the best way to partner and deliver value over time.
6. Harness data to identify the most compelling investments
The intersection of data and technology provides us with extraordinary access to all kinds of information that we can leverage to more efficiently surface and track prospects. We recognized this years ago, leading us to develop an in-house proprietary platform (ProSourcer®) that aggregates metrics and provides real-time tracking, signaling and prospect identification.
The goal isn’t to replace but rather to enhance an already successful and established sourcing workflow, giving us the ability to apply our investment expertise across more relevant opportunities with greater insight. Leveraging ProSourcer, we’ve developed intelligence on more than 150,000 target companies and are tracking over 21,000 companies today.
7. Bring limited partners into the flow of information
Ultimately our goal is to be the best stewards of capital. In addition to delivering superior returns, we believe in the power of transparent, approachable and respectful relationships with our limited partners. This means proactively sharing timely updates on plans and progress (and even tricky situations), explaining our rationale on decisions and soliciting feedback on a regular basis. It’s the way we believe partnerships should work, and while “limited” in name, there’s nothing “off-limits” for our limited partners.
The chance to wake up every day and work with driven entrepreneurs to build their businesses is both an enormous privilege and important responsibility. As we embark on our seventh fund, we continue to reflect, learn and evolve so we can be the best partner to management teams and generate exceptional outcomes.
We’re humbled by the 130 management teams who have chosen to partner with FTV over the course of the last 24 years. We thank the many entrepreneurs, limited partners, co-investors, and countless collaborators who have been our advocates along the way.
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