Most founders know the extremes: early-stage venture bets and late-stage buyouts. But what about the “middle”—where the product works, the market is real, and the challenge is disciplined scaling? That’s the world of growth equity. In this episode, Jim Ferry, Partner at Volition Capital, breaks down how founders can grow with focus, avoid valuation traps, and build durable companies in an AI-accelerated market.
Below is a full recap for anyone who won’t catch the audio—complete with frameworks, questions to ask your team, and actionable takeaways.
Why Growth Equity Is Different
Growth equity invests after product–market fit but before a company is fully optimized at scale. You still have execution risk—go-to-market, hiring, operations—but you’re not betting on whether the product should exist. It’s less about “zero to one,” more about “one to ten.”
What that means for founders:
You need evidence PMF is real (cohort retention, usage, expansion), not just a few big customers.
Dollars are aimed at repeatability—sales coverage, channel strategy, pricing, and ops.
Defining Real Product–Market Fit (Beyond Vanity Metrics)
Jim stresses PMF is a pattern in data and behavior, not a revenue milestone. Look for:
Consistent retention across cohorts
Expansion (upsell/cross-sell) without spiking churn
Sales efficiency that stays healthy as you add reps
Pipeline sources that are repeatable (not just founder-led or word of mouth)
Founder self-check: If you paused paid channels for 30–60 days, would new logos and expansion still happen? If the engine stalls, you might have traction—not PMF.
TAM vs. SAM: Right-Sizing Opportunity
Yes, the TAM slide matters, but Jim argues serviceable and attainable market (SAM) is where strategy gets real. A focused SAM helps you:
Prioritize ICPs you can win now
Design a go-to-market motion that compounds
Choose adjacencies deliberately (not as a distraction)
Try this exercise: Define your top three ICPs by pain, urgency, and willingness to pay. Map which channels predictably reach each one. Kill or pause everything else for two quarters.
Capital Efficiency in Practice
Capital efficiency isn’t austerity—it’s sequencing. Spend where the playbook is proven; protect burn where it’s not. Jim’s signals of efficient execution:
Payback periods within target (and not deteriorating as you scale)
Gross margin improving with volume or mix
Sales productivity consistent across tenured reps
GAAP discipline (not just adjusted metrics)
Rule of thumb: Before you hire the next 10–20 go-to-market seats, prove the current motion is repeatable outside founder heroics or special discounts.
Valuation Sanity: Start with Public Comps
In choppy markets, private headline multiples can mislead. Jim’s approach:
Anchor on public comps (growth, margins, rule of 40)
Adjust for scale and risk (earlier stage = wider discount)
Reality-check with unit economics (LTV/CAC, payback, net dollar retention)
Negotiation tip: If the bid–ask spread is wide, focus the conversation on business levers (pricing, mix, channel, margin) that—if improved—justify your target multiple.
Where AI Helps—and Where It Doesn’t
AI is accelerating adoption curves, but durability matters. What looks exciting today can be copied tomorrow. Jim looks for moats in:
Workflow integration (embedded in multi-step processes)
Proprietary data loops (improving model outcomes over time)
Distribution power (channels that competitors can’t match)
Ask yourself: If a well-funded competitor replicated your model, what would be hardest to copy—your data, your seat in the workflow, or your distribution?
Minority Investing, Major Impact
Volition typically invests as a minority partner. That means support is “pull, not push.” Expect:
Help building talent pipelines (execs, operators, board members)
Access to portfolio playbooks and founder communities
A sounding board for pricing, packaging, and channel experiments
Prep for banker processes and clean data rooms when it’s time to exit
Founder takeaway: If you want a partner, be clear on the 2–3 needles you want help moving in the next 12 months. Set that agenda early.
Founder Evolution: Builder → Scaler → Operator
Many companies stall because the role outgrows the original job description. Jim’s pattern:
Builder: Finds PMF, ships fast, sells vision
Scaler: Hires leaders, installs process, drives repeatability
Operator: Manages complexity, portfolio of bets, quality of earnings
Honest moment: If you’re spending 70% of your time on tasks someone else should own, you’re probably late to hire that leader.
Deal Structures 101 (Without the Jargon)
When markets wobble, structures appear. Used well, they bridge valuation gaps and align incentives. Used poorly, they create headaches.
Liquidation preferences and dividends: Can protect downside but must fit growth plans
Participating preferred: Understand how it impacts founder outcomes
Earnouts / performance kickers: Make sure metrics are under management’s control
Pro tip: Model the cap table under multiple exit scenarios. If the path to a great founder outcome requires a perfect landing, renegotiate.
Where Others Aren’t Looking
Some of Jim’s favorite hunting grounds are “unsexy” categories—supply chain, logistics, facilities, even parking. Why? Clear pain, willing buyers, and less noise. If your category isn’t hot on Tech Twitter, that might be your edge.
Common Pitfalls Jim Sees
Confusing traction with PMF (one big customer ≠ repeatability)
Over-hiring GTM before the motion is proven
Top-down TAM theater without a credible SAM plan
Arbitrage theses (cheap CAC channels that decay quickly)
AI features without durable moats
A Simple Blueprint to Apply This Week
PMF audit: Chart cohort retention, payback, and NDR by segment. Identify where the pattern is strongest.
Focus your SAM: Pick one ICP to win for the next two quarters. Write the “why us, why now” in one page.
Valuation reality check: Build a quick public comps table (growth, margins, rule of 40). Know your band.
Moat map: List your workflow integrations, data advantages, and distribution assets. Choose one to deepen.
Team design: Identify the next 1–2 leadership hires that unlock your builder → scaler transition.
Who Should Read This
Founders with working products who need to scale with discipline—not just money.
Operators tasked with turning early wins into a repeatable growth engine.
Finance leaders navigating valuation, structures, and board expectations in a volatile market.
Final Thought
Growth equity isn’t about spray-and-pray or financial engineering. It’s about evidence-backed scaling—picking the right customers, proving the motion, and compounding with discipline. If that’s the game you’re playing, Jim Ferry’s frameworks are a sharp place to start.
Enjoyed this summary? Share it with a founder who’s moving from builder to scaler—or drop your biggest question in the comments and we’ll tackle it in a follow-up.
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Chapters:
00:01 Welcome & episode setup
00:39 Jim’s origin story (Rhode Island → investing → Volition)
02:45 What growth equity really is—between early VC and buyout
06:17 Defining real product–market fit vs. vanity metrics
08:41 AI’s impact: speed, durability, and building moats
10:16 Anti-portfolio & misses: lessons from deals that got away
13:13 Volition’s check sizes, minority focus, and underwriting lens
16:47 TAM vs. SAM: why the attainable market (and share) matters
18:04 Capital efficiency in practice: burn multiple, alignment, pacing
19:25 Value-add after the check: talent, community, and playbooks
21:58 Minority investing approach: “pull, not push” support
23:40 Partnership model & Jim’s focus on internet business models
25:57 Team underwriting: founder traits that correlate with outperformance
29:00 Founder evolution: builder → scaler → operator (and when to hire)
31:16 Exit readiness: banks, data rooms, and a ButterflyMX example
33:42 Today’s valuation reality: wide bid–ask spreads; start with publics
36:50 Deal structures 101: prefs, dividends, participating preferred
39:44 Where others aren’t looking: logistics, supply chain, parking
40:59 Lessons from failed theses: why arbitrages and DTC CACs decay
42:20 Founder grit vs. market size; winning a disproportionate share
43:33 Underrated founders to watch (e.g., Kinetics, Rounds)
Transcript
Brian Bell (00:01:13): Hey, everyone. Welcome back to the Ignite podcast. Today, we’re thrilled to have Jim Ferry on the mic. He is the partner at Volition Capital. It’s a Boston-based growth equity firm that backs high growth founder on businesses across software, internet, and consumer sectors. He’s been at Volition for over a decade, leading investments in companies like Attitude. Did I say that right? Doing Things, Kinetics, Butterfly MX, and many others. We’re going to dive into his journey, what he’s seeing in the growth equity landscape. I’m pretty interested in this. And where he thinks the next wave of breakout companies will come from. Thanks for coming on.
Jim Ferry (00:01:42): Yeah. Thank you for having me, Brian. Appreciate it.
Brian Bell (00:01:44): Yeah. So I’d love to get your origin story. What’s your backstory?
Jim Ferry (00:01:47): My origin story from Rhode Island, small state, my backyard backed up to the Massachusetts border. So I was only like 45 minutes outside of Boston. That’s where I reside today. That’s where the entire team is here. And actually went to school in Providence, Rhode Island. Didn’t want to go there. It felt too close to home. If anyone knows it, it’s a small state. You can drive across one side to the other, like an hour and 10 minutes. So I was only like 30 minutes away from home. But, you know, what’s that? Pros and cons. Pros and cons, yeah. I acted like I was six hours away. I really loved my experience there. You know, got a finance degree from there. I had an internship at a private equity LDO shop that I really enjoyed. Kind of a smaller team there as well, caught like sub 20 people. So I thought that was really interesting. I think internships for college kids should be, you know, should vary, figure out what you like and don’t like. So my next internship was a subsidiary of Fidelity. It was in the Fidelity building. In Smithfield, Rhode Island, which is, they got a big campus there. Realized I didn’t like working for a big company. I didn’t like the public markets as much. I knew I wanted to get back into the private equity side. At that point, candidly, I didn’t really know what growth equity was. I just kind of thought the universe was early stage venture capital and later stage buyouts. But I kind of networked my way into just talking to a lot of people and talked to someone here who actually went to the same college as me. Kind of right place, right time. And learned a lot about growth equity. It tends to sit close. in the middle of those two bookends of the private equity world. And it felt like a really good fit for me. So I joined her as an analyst back in 2014 and been here ever since. So it’s been a good ride.
Brian Bell (00:03:22): Amazing. And so I’d love to get your definition of, you kind of did a little bit, but what is, how would you define growth equity?
Jim Ferry (00:03:29): Yeah. When I think about early stage venture, you think about high loss rates, really high alpha, so really big return. So there’s going to be a few companies that kind of carry the phone.
Brian Bell (00:03:38): And this would be like pre-seed and seed, and would you put A in early stage as well?
Jim Ferry (00:03:43): It depends. I don’t get too caught up in what you want to call Series A, Series B, because Series A could mean $5 million or $50 million. Depending on the stage of the company, I think about more of just like fun strategy in a way. Like venture, like I said, it’s going to have high loss rates, but you’re going to make up those losses on a big portfolio where hopefully you have a couple of winners that carry the fund. Growth equity.
Brian Bell (00:04:04): I like what you said there, right? Which is what I try to communicate to my LPs is why we have a large portfolio because we’re going to have a high loss ratio and we’re trying to, you know, we’re trying to maximize our shots on gold to hit outliers, right?
Jim Ferry (00:04:15): Yeah, no, that’s right. It’s a proven model. It works. And we get involved a little bit later when we kind of de-risk that product market fit stage. So on our website, I think we say like we look for business with 5 million plus run rate. Ultimately, we’re looking for companies of product market fit. For some companies, that’s 3 million, for some it’s 10, just depending on the dynamics and business model. So we feel like growth equity is kind of sitting at this point where you found product market fit and you’re now taking risk on the execution of kind of scaling in the go-to-market strategy for the most part. So we help a lot of portfolio companies there. And ideally we’re kind of scaling to you know, the point where we’re exiting at some point to a larger PE fund, which is kind of the other bookend of the market. It could be IPO as well.
Brian Bell (00:04:58): It could be like a Vista or something like that, like a really big PE.
Jim Ferry (00:05:01): Vista, Toma Bravo, like some of the names that I’m sure people think of about buying other companies. You know, could sell to a strategic as well, but just given the amount of dry powder in the private equity landscape right now and their ability and speed to do deals, the majority of our exits over the past few years, like most funds have been to other private equity firms, but I think that kind of adds and flows.
Brian Bell (00:05:22): That’s interesting. So you could come in at the A or B, it sounds like, and then you, like, what’s your holding period until you exit typically? What’s your target?
Jim Ferry (00:05:30): Yeah, like we do tend to be series A or series B. A lot of times we’re the first institutional capital. So we work with capital efficient businesses, you know, aren’t burning. It’s not a burn at all costs and figure out the economics later. They tend to have pretty sound business model. So the whole period, I don’t know, we think about it as five to seven years, but I think the fastest we’ve ever exited a business is three years and longest we’ve ever held a business is 11 years. Everybody’s got a number and ultimately it’s a lot based on the founders. We’re minority equity investors and we’re working with them to decide, hey, what are multiples in the market? What does timing look like? And kind of helping them think through that strategy as well.
Brian Bell (00:06:04): It’s really interesting, you know, the early stage versus the growth stage versus the late stage, right? Because in early stage, I’m looking at companies that have, you know, maybe a couple hundred thousand of ARR and they’re asking, you know, 10 or 20 caps or higher. And then it gets much more disciplined in the growth stage where now you have to think about the multiples, right? You mentioned something that I want to tug the string on, which is product market fit. How do you know a company has product market fit?
Jim Ferry (00:06:26): I’ll go back to the comment that I made earlier that like we look for product market fit. That could be 3 million or 10 million. Pick your number. Ultimately, I want to feel like there’s enough historical data in the company where I can sit down based on prior metrics of the business. I can build a financial model with some degree of confidence that, hey, if we continue to execute, this is what the business could look like in five to seven years over the whole period. So a business, for example, that has, call it 10 million in revenue, that has three customers. Maybe it’s in the healthcare space. That happens a lot. You sign a couple carriers and all of a sudden you have these huge contracts. Does that a product market fit? You could argue one way or the other. It’s difficult to say, hey, there’s a repeatable motion here. Flip side, if you go to maybe an SMB business that has a low price point that has hundreds if not thousands of customers and they’re at a 3 million run rate, I could probably say, hey, there’s enough data points here where we feel comfortable building a financial model to think about the future. All that being said, there’s exceptions to every rules. And I think in this environment where of AI, we’ve seen businesses that get to, you know, 20 million of revenue in the first nine months. So we are developing our thinking on that of, hey, maybe that’s product market fit as well. And even though there’s not a ton of data on renewals and retention history.
Brian Bell (00:07:40): Yeah. I mean, AI is, is, uh, it’s pretty crazy out there. You’re, you’re seeing, I’m seeing a lot of bootstrap founders get to one or 2 million of ARR before they raise around. I’m looking at one right now, actually.
Jim Ferry (00:07:49): I’ve seen a lot bigger than that. Like, it’s amazing. You know, they can have three people and we’ve seen, especially the consumer facing ones can just have a virality to them and scale to 10, 20 million run rate in a A time that was inconceivable AI.
Brian Bell (00:08:03): Yeah. Which is bad for me because, you know, I, you know, they go straight to growth equity. I don’t even get in at the pre-seed, you know? Yeah. They just, they bootstrap and now they, yeah, they get to 5 million or 10 million and they’re off to the races. What has changed? I mean, you’ve been in the game for a while. Like what has changed since 10 years ago, especially now in the kind of the age of AI in the last year or two with this, how’s that changing the game and in that kind of growth stage that you guys sit in?
Jim Ferry (00:08:27): Yeah. I mean, I talked about what one aspect of it where companies are just AI first companies, I think are scaling faster. I think we’re seeing a lot of them. I think where we worry a little bit is differentiation in long-term durability of some of the AI companies.
Brian Bell (00:08:43): Yeah, it’s like easy come, easy go almost, right? Like, oh, yeah, you scaled to 10 very fast. But is that durable, repeatable, scalable revenue to like 100 million or 50 million?
Jim Ferry (00:08:51): Exactly. A lot of AI first businesses can be easily replicated just on top of open AI or something. So I think we think a lot about like, all right, how can they capture this market without a ton of competitors coming in? success always brings competition so maybe you get to 10 million guess what someone else is going to realize that and do the same thing and if they can easily replicate your product then you’re probably going to have a turn problem at some point it’s going to be a race to the bottom on on pricing i think that some of the ways that you can differentiate in that space is through integrations and product workflows so if it’s just a standalone solution that that can be created pretty pretty easily today um There’s low barriers to entry on software development these days. If you, however, connect to whatever your tool is to 50 different APIs and you’re ingrained in someone’s workflow, I think that that can create some long-term durability.
Brian Bell (00:09:47): Right. Do you have any favorite deal stories over the last 11 or so years that you’ve been at Volition?
Jim Ferry (00:09:52): By deal stories? Like ones we missed, ones we made?
Brian Bell (00:09:54): Yeah, let’s do both.
Jim Ferry (00:09:55): Yeah. I mean, we always say that you have to have the term in the VC or private equity world. I’m sure you’re familiar with this anti portfolio. It’s like the companies that you didn’t invest in.
Brian Bell (00:10:05): If you had a chance to. Right.
Jim Ferry (00:10:07): Yes.
Brian Bell (00:10:08): If you literally passed on them. Yeah.
Jim Ferry (00:10:10): Correct. If you don’t have a long list of those, you’re not seeing a good deal flow. You should. You’re never going to be 100% right. So I don’t know. I got a laundry list of them. A couple that stick out would be Honey back in the day. That was a Google Chrome application. I think they were raising their Series A, and we thought it was a crazy price at the time. And they wound up, I think, three years later getting acquired by PayPal for $4 billion, where that would have returned the fund many times over. That’s one you’re like, oh, man, we missed that. There’s other ones that weren’t super obvious. Figs, for example, that’s kind of like a nursing scrubs business that went public. I think they’re trading at a billion now. But I know I’m going to miss some of those, and I feel okay with it. To be honest, Brian, the ones that bother me the most are the ones that I knew were really good companies and that didn’t break through. And then they wind up being awesome. A great example of that is Klaviyo. That was a Boston-based company. I think they’re trading at like 7 or 8 billion in the public markets today. And it was one that back in the day as like an analyst or associate, I used to pound with emails and I tried many ways to break through and didn’t get there. So those ones bother me more, to be honest, than the ones where I at least got to looking because I’m always comfortable with, okay, here’s why I passed. It made sense at the time. It’s the ones I didn’t get to look. I’m like, man, you know, that helps. Yeah.
Brian Bell (00:11:24): This is something that hurts a lot in pre-seed and seed as well. There’s 30,000 companies, 20,000 in pre-seed, 10,000 in seed. It’s almost impossible to see everything.
Jim Ferry (00:11:33): Yeah, but what I’d say where we play is we have a lot of data tools that help us decide what are the potentially interesting companies. So it’s a competitive market in the sense that I think most other growth equity funds use the same data tools that we do, ranging from... pitch book and source scrub and grata and all these tools that help track stuff like employee growth over time relative to their capital raise uh are they hiring a cfo which could be a good indicator that hey they’re ramping up to go raise capital or something we’ve actually created a tool in-house that aggregates a lot of that data we have a third-party developer that we try to get some proprietary data once you kind of marry it all together That’s been really useful for our analysts to source and find interesting companies. But yeah, it’s the ones you don’t get in touch with that drive me nuts.
Brian Bell (00:12:22): And then, so let’s talk about deal velocity, check size, all those kind of fund characteristics.
Jim Ferry (00:12:27): Yeah, our typical check size is anywhere in the range of 15 to 60 million, plus or minus. We tend to- One five to six zero.
Brian Bell (00:12:35): It’s a pretty big range.
Jim Ferry (00:12:36): Yeah, it’s a big range. You know, that’s going up a little bit over the years. Our fund, we’re in our fifth fund at 675 million. That’s up from a $400 million fund, which is up from a $250 million fund. So we’ve been methodical about how big our fund gets. What we don’t want to do is scale the fund size too big to the point where we’re changing the asset class that they’re in. And we’ve seen other funds go through that evolution where maybe they start in the growth world. There is such a big fund that all of a sudden they’re a buyout fund and they’ve kind of left behind what got them there, where they’ve had success in returns historically. Um,
Brian Bell (00:13:11): That’s a really interesting dance, you know, and something I’ve been warned against as I kind of scale into my next fund as well, you know, and trying to stay true to your roots and not become something that you’re not. It’s probably hard not to do, though, when, you know, LPs, you have good performance. They just want to throw more money at you. You’re like, all right, I guess I’ll do a billion dollar fund.
Jim Ferry (00:13:30): Yeah, it is hard to do, but at the same time, we’re methodical and saying, here’s how much we deploy. And we are very selective. You know, there’s five partners, including myself at Volition. I think in this $675 million fund, we’ll probably have five or six investments per partner. So if you think about a deployment cycle of, you know, three, three and a half years, something like that, you can kind of get to back of the envelope of like the velocity of deals that we’re doing. And it’s a select amount per year.
Brian Bell (00:13:58): That’s like one every six to nine months almost.
Jim Ferry (00:14:00): Yeah, I think that’s right. And that’s always been core to our strategy as well, is to have concentration in the fund, especially at this stage where we feel like we’re backing businesses where there is less of a chance to have a zero X return. I think our underwriting philosophy is really one X five X. I think if you ask a lot of other growth equity funds, they Tend to think about underwriting to a 3X. But if you go back and look at all the data that you can find on growth equity exits, 3Xs are pretty rare. They tend to be outlier returns where it’s kind of 4, 5X, 10X plus, or it’s kind of in that sub 2X zone. That’s because I think many times companies rarely kind of work. You either kind of take off and hit exit velocity or you get stuck in some type of plateau. And part of the reason that we invest in capital efficient businesses is we want to feel like, hey, we’re not risk betting the farm to have this huge outcome. You can have a huge outcome and do it responsibly without kind of risking all shareholder values. So I think as a fund, when you take concentration, you can’t have a lot of zeros. So we always want to feel like, hey, we’re aligned with management. We’re going to protect the downside of this business for whatever reason we feel like we can. We’ll recover our capital and then some for the management team. So no one’s walking away with zero. I think where we pass on a lot of deals is we feel like there isn’t 5X plus potential based on TAM or whatever it may be.
Brian Bell (00:15:25): What’s too small of a TAM when you’re coming into companies that have five or 10? How do you measure that? Do you do a top-down, bottoms-up, both? How does that look for you?
Jim Ferry (00:15:34): I think one thing that we’ve come to the conclusion of is we probably always overestimate TAM. I think everyone does, and we focus a lot on SAM or serviceable addressable market. We sometimes call it total attainable market opportunity. internally here. I don’t think there’s a right number of like one that’s too big or too small. It’s relative to the competition and how much of the market you can take. Like we’ve invested in businesses that have a probably like a $200 million sand. But for whatever reason, we feel like they’re backed by a leader who has a lot of industry knowledge. They have really high retention rates. And there’s been a lot of money made in vertical-specific software solutions that take a disproportionate share of the overall market. To the point where we’ve seen many exits where the exit valuation is many times larger than probably the total 10, just because someone is able to capture a disproportionate share of it.
Brian Bell (00:16:31): So you guys emphasize bootstrapped founder-owned companies. Will you look at companies that got a pre-seed and a seed?
Jim Ferry (00:16:38): For sure. The way we tend to think about it is we want companies that have raised less than 10 or 15 million of institutional capital. If it’s more than that, we tend to think about a one-to-one ratio of scale to capital raised from a burn rate multiple. Meaning that,
Brian Bell (00:16:52): hey, you raised 10, you should be pretty close to 10 million of ARR for us to get interested.
Jim Ferry (00:16:57): Yeah. Yes. And there are exceptions to every rule, as you know, like there’s been companies who have raised more than that, but maybe they pivoted and they’ve only actually allocated 5 million to this new business out of the 20 million that they raised or something. But part of it is capital efficiency. Part of it is... We want to be aligned with all of the other shareholders. I’m sure you’ve seen this where sometimes you get in situations where, you know, there’s another investor that’s at the end of their life and they want to get some liquidity so they can go fundraise. And all of a sudden they’re kind of trying to force a sale when the company’s not ready for it. So it’s a lot easier when we’re the only investor in the business or at least everyone’s in the same timeline. Yeah, ultimately that’s kind of the ceiling as we think about it.
Brian Bell (00:17:39): And then let’s talk about how you guys partner with the founders after you’ve invested. What’s different about how you guys approach that versus maybe some other shops out there?
Jim Ferry (00:17:48): Yeah, I think over the last seven or eight years, we’ve really built our ecosystem and back office of how we support our portfolio companies. There was a story where back in the day, one of our LPs asked, do you make money on the buy or the hold? And ultimately they’re saying, are you buying right or kind of helping them? And I think we said both. And as we stared ourselves in the mirror, it’s like, hey, we could probably do a lot more to help our portfolio companies. And we’ve done that. So I feel really proud about what we’ve accomplished over the last eight years or so. We actually brought in a former CEO of ours, Pete Lamson. He ran a business called Jazz HR that had a successful exit in the HR tech space as our I’m kind of COO. He helps Volition in internal ops, but also, you know, with our portfolio companies. And a lot of what he’s been doing is helping to build portfolio support. So that ranges anything from we have a talent team that helps hire world-class talent. We have a marketing team that helps a lot around PR, branding, et cetera. We try to do a lot of inter-portfolio stuff as well. As we’ve gotten bigger, the number of portfolio companies we’ve invested in has gotten bigger. There’s a lot of like-minded sectors and individuals who are going after the same targets. So we have a Slack group, for example, for all of our ad tech and media and publishing type businesses. And they can bounce ideas off each other. Hey, does anyone know someone at Publicis that I can talk to that does this? So that’s been really useful. We also do it by functional areas. All the CFOs are in a Slack all together. We get everybody together once a year for a leadership summit as well, where we have a lot of great guest speakers as well as you just have portfolio companies kind of presenting what they’re doing. But the best thing that comes out of that is the partnerships and people getting to know each other. And a lot of the portfolio companies wind up helping each other down the line. Other things we do, we have our own, uh, a proprietary portal that’s behind a login that has a lot of stuff around webinars, templates, best practices for, hey, how do I do annual planning? We also have a preferred vendor program as part of that where we have kind of mapped here all the vendors that our portfolio companies are using. And if we see one that’s being used over and over again, we’ll go try to negotiate preferred vendor pricing on their behalf. So I’m missing a lot of other things, but all that’s to say is We’ve really tried to be a value-add partner that’s founder-friendly. We’re minority equity investors. We’re not pushing that on anyone. It’s definitely a pull.
Brian Bell (00:19:58): What does that mean, a minority equity investor? I think I know what it means, but how do you define that?
Jim Ferry (00:20:02): We own a majority of the business. So we own less than 50%, so that means we don’t control it. So we can try to influence you and challenge you as a board member, but at the same time, we can’t force you to do anything, really. So all of that is there for our portfolio companies to use as a resource. I’d say all of them use the lower majority, if not all of those resources. And the ones that do have found it really helpful. And last thing I’ll say is like, at the end of the day, I just want to be a good partner. I don’t view this as a transaction. It’s not like buying public equities.
Brian Bell (00:20:33): I mean, you guys sound a lot like a VC firm, but you guys don’t call yourselves a VC firm.
Jim Ferry (00:20:36): Yeah, it’s funny. I mean, if you ask our LPs, some of them call us late stage venture. Some of them call us, think of us as early stage growth equity. So it depends who you talk to. We consider ourselves growth equity. Because I tend to think about venture as having a, as we talked about, a much larger portfolio. We’re going to have some zeros. And from a fun construct perspective, I view it as growth equity.
Brian Bell (00:20:57): I’ve had people on the program that do A and B, and they do 20 or 30 per fund. They’re pretty concentrated. Take a board seat, minority, 15, 20%. It’s pretty typical in venture. But I guess if your check size goes all the way up to 60, then that does kind of veer into the late stages of venture capitals.
Jim Ferry (00:21:17): Yeah. Yeah. It’s semantics in a way. Ultimately, we just want to be a good partner.
Brian Bell (00:21:21): Yeah. So you guys invest in a few areas. I’m guessing it’s kind of divided by partner lines. So different partners focus on different themes.
Jim Ferry (00:21:30): Yeah, that’s right. We have an interesting partner dynamic where I think out of the five partners, we all like different types of deals. So I think that creates a balanced fund and it prevents groupthink ultimately. And we place a lot of emphasis on conviction over consensus. that doesn’t mean that we don’t listen to each other and take feedback and everything, but we don’t, it’s not a situation where everyone needs to raise their hand to say, yes, like this, this makes it through.
Brian Bell (00:21:55): You have an allocation inside the fund. Like Jim can go invest in five or six companies over the next three, three and a half years. And then, yeah, your partners are going to challenge you, but ultimately, you know, you’re going to, you’re going to make the final call on the five or six. Is that how it works?
Jim Ferry (00:22:09): Yes. Like a partner in theory could, could veto someone else. especially at the manager partner level, but you know, that has yet to happen because, you know, ultimately we think like, Hey, if you’re doing the work to, we never invest in perfect companies. If you’re doing the work to identify all the risks, you diligence those risks appropriately. and are willing to stare those in the face, you have the support of the other partners. So anyways, there’s five partners, as I mentioned, three of them focus on more what I would consider SaaS businesses. And then me and another partner focus more on the internet side. I know that’s incredibly vague. The way that we tend to define internet is more high volume transactional, could be reoccurring type businesses. So think about marketplaces, whether B2B or B2C. Advertising technology falls underneath that for us. Supply chain logistics, mobile, digital insurance, et cetera, et cetera. A lot of other funds may just call that software, but I think about it as the SaaS and software team, they’ve pretty defined metrics in the types of businesses that they look at. We look at a lot of different business models from an internet perspective, and it’s more of a cohort maybe higher churn and you’re looking for stability in those cohorts, etc.
Brian Bell (00:23:16): How do you guys underwrite teams at that stage? Because the founders have now taken this thing into 10 or 20 million revenue kind of territory, maybe five. How much are you peering at the team versus the business and the market and the timing? Is there a weighted scorecard internally? How do you weight all these factors?
Jim Ferry (00:23:33): It’s funny you ask that. It’s something we’ve been thinking a lot about. And one of the projects that we had our interns do over the last year or so was go back and try to look at all the attributes of our founders. And was there any commonalities between our winners and some of the middling companies? There are some interesting things. Like if there’s two founders is the money is the, you know, it’s a lot better than one where you don’t have someone to bounce ideas off of more than that. Maybe there’s too many cooks in the kitchen. Education didn’t matter when we looked at it. Some people had no college education. Some had their MBA. Like there was no correlation. Granted, this is somewhat of a smaller data sample size, but we think about it a lot. As I think you go back and look at Pretty much every company we invest in, when we put out our investment debt, which is kind of like a diligence memo, almost every single one has management as part of the thesis. And so we try to spend a lot of time on it, but it’s hard to quantify what you’re actually looking for sometimes. Sometimes it’s just aspirations to build a big business, or sometimes just like you talk to someone, they’re gritty, it’s like, hey, I want to back this person whatever they’re going to do. But there’s kind of a joke that one of the managing partners here, Roger Hurwitz, has coined. I say joke, but it’s probably a half joke. But there’s five things that matter in investment. It’s product, market, management, management, management. A really good management team can get you out of any sticky situation or a topic.
Brian Bell (00:24:54): Yeah, that’s interesting. Yeah, I kind of go back and forth, you know, as an investor, you know, I think I’m really, really bullish on or really, really bullish on teams right now. I’ve noticed that, you know, I made 260 investments now over the years. I’ve seen a lot of stuff. And, you know, yeah, the ones that tend to pull through just have those really great two or three founders that are just dynamic and very capable and have a history together. It’s kind of like how YC selects, you know, all their companies.
Jim Ferry (00:25:21): But I agree with that. But if I were to ask you, like, what is the commonality? Is there one that you find or is it just a gut feeling at the end of the day?
Brian Bell (00:25:28): It’s, yeah, I was talking to, I was being interviewed actually on another podcast about this. And I was like, you know, it’s kind of a vibe you get, you know, it’s kind of a hunch you get when you just hang out with people and talk to them and, and, The way I think about it is what I want on my podcast. One, that’s a good filter. And then two, do I see them ringing the NASDAQ bell someday? Like being interviewed on CNBC? That quality of a person? Because you talk about going from a company with 100,000 revenue to 100 million. It’s a much different beast. Not that the company won’t survive that transition, but can the founder take it there? Yeah.
Jim Ferry (00:26:06): Yeah, it’s a great point. I always kind of tell the founders that we backed, there’s really three evolutions in their journey as they scale. They’re builders, scalers, and operators. And I think we tend to invest probably in that zone of when they’re transitioning from building to scaling. That’s kind of like 5, 10 million revenue, whatever, depending on the business. And I think over time, if you get to 50 million or something like that, sometimes the founder and CEO of a business becomes more of an operator. And they’re not getting their hands dirty like they used to in the product. They’re managing people at the end of the day. And I found that a lot of founders don’t like that as much as they did when they were kind of building and creating. Because it’s almost a different mindset. And, you know, the creative people that are more risk-taking don’t love the operator role as much as they love the kind of building process.
Brian Bell (00:26:54): Yeah. And sometimes they probably raise their hand and say, look, this isn’t for me. I don’t want to run, you know, a thousand person company. I want to go back to like, like builder mode again.
Jim Ferry (00:27:01): Yeah.
Brian Bell (00:27:02): It goes zero to one or one to 10. I don’t want, I don’t want to do this like a hundred to 150 thing, you know?
Jim Ferry (00:27:07): Totally. And I think most of the founders be back every day. It’s the biggest business they’ve ever run. So I think the best ones are the ones that recognize like, hey, I think I can scale this to 50 million or a hundred million, but there may be a point where it outgrows me. And sometimes those are the founders that actually wind up being able to transition to the operator and continue to scale. But there’s been many times where you’ve seen founders say, hey, I’ve got it here. I’m not sure I’m the right person to bring it You know, from 50 to 100 and they could be a president doesn’t mean they need to step down as CEO or maybe a really good COO and try to surround themselves with a good team. But there’s other scenarios where they step down to do what they love to do at a startup and be an individual creator or contributor and kind of bring in a professional CEO. But there’s many paths to take there.
Brian Bell (00:27:54): So we’ve covered the entry. We’ve covered the value add middle. Let’s talk about the exit. So when do you know it’s time to exit? And how do you support founders through that transition?
Jim Ferry (00:28:04): Yeah.
Brian Bell (00:28:05): It’s now time to get acquired or get a buyout firm to buy you. Like, yeah. How’s that? What’s that look like?
Jim Ferry (00:28:10): I think it’s different for every company. There’s a lot of companies I think it makes sense to hire an investment bank to maximize enterprise value as well as just manage the process because these founders have a day-to-day business they need to run. A lot of them don’t have time to deal with all the back and forth investors. The best companies I’ve seen at exiting are the ones that have the best data tracking capabilities. I have a portfolio company of mine that hasn’t exited yet, but they’ve raised a decent amount of money in some of it in liquidity. It’s called Butterfly MX. I’ll shout them out for having a really good data infrastructure. They went to the market, and I think that it was a pretty quick process because any chart or data point you could ever think of, they already have in a live dashboard. So that just became their data room. A lot of what I think hinders companies in these processes is getting the right data and having a data room ready to go for investors. Many times that is the problem. But to answer your question, like sometimes when we hire a bank, there’s a scenario right now where I’ve really helped a company that’s in market where we basically created the investment deck for them and are acting as a quasi banker for them because they feel like they didn’t really want to go that route. And I feel like they’re really good storytellers. I think at the end of the day, we listen to our founders. I think they know their business and market the best. If they’re telling us, hey, I think now’s the time to go to market for this reason, we’re going to back them regardless. But there’s also scenarios where we’re looking at the market and not pressuring them, but in a board meeting saying, hey, multiples are at an all-time high in this sector or some company went public at this multiple. We should maybe test the market and see what liquidity looks like. There’s a lot of times where we make the introduction to the next investor. Many times it’s not acquirer, but we could get some liquidity there as well. We’ve done that with some folks in our LP who direct investing on top of it. It changes with every company, but I just want to be a good partner to the founders and listen to them on the way that they think about timing.
Brian Bell (00:30:05): Let’s talk a little bit about current market and looking ahead. We’re in a strange moment with valuations. How are you approaching deals right now in this environment?
Jim Ferry (00:30:14): The bid-ass spread on valuations is wide right now.
Brian Bell (00:30:18): Tell us more about that.
Jim Ferry (00:30:19): You know, I brought a couple of companies to market and you can get in a bank process valuations that are a hundred percent apart.
Brian Bell (00:30:26): A hundred percent what?
Jim Ferry (00:30:27): Apart. Like literally one, one valuation is double.
Brian Bell (00:30:31): So they’re willing to invest at a, let’s just throw something out there, a hundred million, but somebody else like, no, 200 million.
Jim Ferry (00:30:37): Yeah.
Brian Bell (00:30:37): That’s not like now 200 million is our number. And the bank’s like, no, that’s really kind of a hundred million with this kind of growth rate and
Jim Ferry (00:30:46): Yeah. So from my perspective, I want to focus on companies that I think were aligned on valuation. So I ask a lot of people very transparently, like, how do you think about valuation dilution or multiples in this market? And I’m not trying to get them to negotiate against themselves on the first call, but if they’re a 5 million runner at business that wants a billion dollar valuation, I’m not like, I’m picking a big number, but even 500 million or a hundred million at this point. I mean, it’s crazy. Hey, that’s select to you. If you can get it, I go ahead and take it, but we’re not going to be the right partner for you. So that’s one way. And even when we do request data, we try to keep the initial data request pretty light, typically like revenue by customer over time. Many times that’s it. You can, you can, Learn a lot from a business just with that data and run a lot of analysis and we’ll kind of sanity check. Hey, here’s the ballpark that we might be in. Does it make sense for us to take the next step? Because I’m mindful. I don’t want to waste people’s time. They got a business to run. And we have a lot of opportunities as well. So I don’t want to waste our time. There’s a lot of dry powder in the market right there. So a lot of capital raised people are trying to deploy capital.
Brian Bell (00:32:01): How do you think about those multiples? Do you guys have your own proprietary kind of formula? Or you kind of look at like much more like an appraiser when marks to market and you kind of know what’s market. Like a company that went from 1 million to 5 million. So they just 5X revenue year over year. You’ll underwrite that differently from something that went from 3 to 5.
Jim Ferry (00:32:20): Definitely. The public market does as well. They value high growth businesses a lot better than slow growth businesses. And it’s more of an art than a science, as you know, Ryan.
Brian Bell (00:32:30): So you are kind of like looking out there at the public markets and saying, okay, in the public markets, they’re getting X forward sales for that kind of growth rate versus, hey, another company, here’s another comp, it’s more like 10X. So you kind of, because those markets are more liquid, you have a lot more examples out there, right?
Jim Ferry (00:32:46): Definitely. And I don’t like using private comps when it’s not a liquidity event. You can assign any valuation you want to a business. And there’s the old joke of you name the valuation, I’ll name the structure. And there are businesses that have big valuations with 2x lick prefs on them or... or some structure that’s pretty detrimental to the cap to a lot of the investors so headline valuation in a fundraising round in a private market is is difficult to comprehend so we always start with the public markets because it’s standardized
Brian Bell (00:33:19): they don’t have all that lick pref crazy stack stuff sitting there show me the valuation i’ll show you the structure i haven’t heard that but that’s that’s really
Jim Ferry (00:33:26): really wise yeah so yeah you can put that one in your back pocket if you want but
Brian Bell (00:33:30): yeah yeah
Jim Ferry (00:33:30): But yeah, so we start with public valuations. I think we look at private exit comps. I think that that’s, that’s relevant for sure. And then, you know, you adjust up or down in there based on growth rate market.
Brian Bell (00:33:41): So what kind of structures, if you’re advising me, imagine you’re my fund advisor and I’m sitting on a bunch of pre-seed deals and I’m starting to get into the B and C territory, right? What kind of structure would I look at and go, you know what? I probably should get out of this company. I should probably just sell. Is it the 2X LickPref? Like any other kind of structural things like that where it’s like, maybe I need to like, trim this position?
Jim Ferry (00:34:01): It’s so hard to answer that because I think it’s company dependent. And I’ll give an example. There was a company that we invested in a long time ago. I won’t name the company, but they wanted a big valuation. And we kind of said, hey, we’re too far apart in this valuation. And they’re like, we’re going to blow through it. Put some structure on it if you want. And we kind of said like, all right, what about a multiple liquidation preference structure? I think it was a 3X LickPref, which I’ve never heard of. The founder was so confident that they were going to blow through it and that their valuation was justified that he was fine taking it. And kudos to him, he did. So, you know, in that scenario, like if you’re on that cap table and you are such a believer, maybe that is the right path for the business. There’s even scenarios where we’ve talked to businesses and said, hey, we can’t get to that valuation unless there is some form of structure because we feel like we’re taking unnecessary risk for whatever reason. So maybe we have some type of dividend on the preference or even a participating preferred. Sometimes uncapped, sometimes with a cap. It really depends on what the company’s trying to optimize.
Brian Bell (00:35:04): Yeah, I like that. Are there any spaces that you guys are looking at now that feel kind of underappreciated maybe right before a breakout?
Jim Ferry (00:35:10): yeah i mean i think that we we don’t chase hype cycles for the most part so we’re struggling paying the crazy multiples on ai companies although i actually think those are coming back down to earth we’ve seen some transact at like very reasonable software multiples now so me personally i’ve been thinking about what are some of the unsexy industries that might get overlooked um That could be something like supply chain logistics or even parking is one. There’s been some unbelievable businesses built there that are super profitable, that are kind of under the radar. And I think that a lot of other investors might miss some of those unsexy industries when they’re chasing some of the sexy AI stuff. Don’t get me wrong. I’d love to do a sexy AI deal as well, but I think having a balanced portfolio is important.
Brian Bell (00:36:00): Yeah, you can’t tie everything into one category like that.
Jim Ferry (00:36:03): For sure.
Brian Bell (00:36:04): A high beta.
Jim Ferry (00:36:06): Yeah.
Brian Bell (00:36:07): Let’s wrap up with some rapid fire questions. What’s an investment thesis you held strongly that time proved wrong?
Jim Ferry (00:36:14): Yeah. There was a while where I was really into almost on the backs of WeWork, looking at models that were kind of arbitraging leases. So there was this whole segment of these branded... airbnbs for lack of a better term and they were trying to create consistency across short-term rentals i was like pretty bullish on that and then some other arbitrage plays and i think what i found over time is arbitrages exist in a short period of time there’s a reason arbitrages don’t last essentially because there’s no durable
Brian Bell (00:36:44): arbitrage they get arbitraged away yeah yeah
Jim Ferry (00:36:47): And then the arbitrage goes away. So I would even draw a parallel to that to like the D to C businesses that scaled. Like think about a Warby Parker back in the day. If they started today, they would not scale to the revenue scale that they would because just Google and meta ads are so efficient. The CAC doesn’t play out anymore. And that’s why they’re in every mall now. They kind of hit their ceiling probably on digital customer acquisition. So you need to start to look like a normal brick and mortar company.
Brian Bell (00:37:15): How do you evaluate founder grit versus market size when they’re in tension?
Jim Ferry (00:37:18): It’s a great question. I think I tend to ask myself, is this person well-known and an industry leader? Because I think those are the type of people... from a grit perspective that can get a disproportionate share of a smaller market that that we kind of discussed earlier and we’ve had businesses like that i’ll i’ll mention a portfolio company of mine is called automatic it’s in the live event ticketing space they kind of they basically offer all the software for ticket brokers on the secondary ticketing market that are kind of reselling tickets That’s not an infinite TAM, but the CEO there has done an amazing job of being a thought leader. And they’re definitely, you know, own a disproportionate of the market. It’s a great business that’s scaling well and super profitable. And it would be really hard for someone else to come in that market and try to displace them because of who he is in the team as kind of thought leaders in the space.
Brian Bell (00:38:14): Do you have any underrated founders that you’ve worked with over the years that you remember being like, wow, that really surprised me?
Jim Ferry (00:38:20): Yeah. I’ll mention two. One of them was the CEO or the two co-founders of a business, Kinetics, which was an ad tech business, video monetization solution for online publishers. And we invested in them when ad tech was out of favor.
Brian Bell (00:38:35): I used to work at Rocket Fuel, so I’m very familiar with that.
Jim Ferry (00:38:37): Okay.
Brian Bell (00:38:38): the rise and fall of ad tech companies.
Jim Ferry (00:38:40): As you know, ad tech goes in and out of favor. Like I think it was out of favor when we invested and then the trade desk went public and all of a sudden it was back in favor. So we kind of have ridden that wave multiple times, but yeah, the founder there, David Kashuk and the co-founder Oren Stern were Really good product people. And if you know ad tech, it’s super fast moving industry. You always need to be two steps ahead. And it’s hard to know that they’re going to be those people when you initially invest. But looking back, that was a really successful exit because they saw what was coming. They were like early to AI before people were talking about AI. And they were doing some contextual learning within the video way before anyone was talking about contextual. And they actually had a little bit of a pivot where they kind of started as a syndication model, realized people didn’t want to syndicate. So then they basically created video in a different manner. So I think they were really good at evolving and being two steps ahead, listening to customer feedback. And that turned out to be an awesome investment. Then I’ll shout another one, a business called Rounds, which is an aggregator of mobile apps. on the Google Play Store. There’s a founder there, Cal Avidar. He’s out of Tel Aviv, actually. I don’t know if he’s ever missed a number. Really good product guy. He does what he says he’s going to do and just keeps his head down. It’s a very under-the-radar business that’s performing really well, that acquires an incredible velocity of mobile apps on it. quarterly basis where it’s, they’ve exceeded my expectations there. We’re still invested in that business. So they’re doing a great job.
Brian Bell (00:40:05): How do you personally keep up with everything and keep learning?
Jim Ferry (00:40:07): I think intellectual curiosity is the most important attribute to be successful as an investor. As I talk about, like there’s a lot of markets that are fast moving, especially AI. Right now we’re in like an unprecedented time of innovation. We have an analyst team in a traditional growth equity model. We probably have 15 to 20 analysts that are talking to 20 or plus founders on a weekly basis. And they’re coming back on Monday with, here are the best companies for Volition’s mandate. And I try to take as many calls as I can because just having those calls, talking to smart, talented entrepreneurs, you’re going to learn a lot about an industry. It’s a good party trick to know a lot about a lot of different industries. I can talk to a lot of different people about what they’re doing.
Brian Bell (00:40:46): I can totally relate to that as a generalist, early stage investor. You know, it’s just very intellectually stimulating.
Jim Ferry (00:40:51): It is. I listen to a lot of podcasts, a lot of books on tape on my drive in to the off and try to just...
Brian Bell (00:40:59): What’s your favorite podcast besides the Ignite podcast, of course?
Jim Ferry (00:41:01): This podcast by far. I don’t know. Like, you know, I ebb and flow on podcasts. I love how I built this. I think like that’s a fun one just to hear. I know it’s a cliche. A lot of people listen to that one. If they were looking for kind of a hidden one that I listened to, that’s probably not it. But I’ve actually been transitioning more to audiobooks lately. I really like... I’ll go back and forth.
Brian Bell (00:41:21): I’ll go through like a podcast phase for a while. And I feel like it kind of gets stale after like a month or two or three. And I kind of go back to an audiobook to just dive deep on something.
Jim Ferry (00:41:30): Yeah, I love audiobooks. I’ll kind of go back and forth. I love biographies of really successful people. Like that’s the type of book I like to read or listen to, I guess.
Brian Bell (00:41:41): Yeah. So what’s a book that you recommend all your new analysts that come in to read?
Jim Ferry (00:41:47): I don’t recommend all the analysts at any book, so I’d be lying if I did. However, one that I think had a big impact on me was Walter Isaacson’s Steve Jobs biography. I just thought, you take a step back, the amount of innovation that Steve Jobs had in a short period of time is truly unbelievable. And even though I think about where Apple is today, they haven’t really had a super innovative product since he passed away. It’s just been iterations of their existing product.
Brian Bell (00:42:13): And a lot of the ones that were released after he passed were already on the roadmap. He already had them on the roadmap, like the Apple Watch.
Jim Ferry (00:42:21): So I think that’s a super interesting one that I’ve read multiple times and not just listened to on books on tape.
Brian Bell (00:42:28): What’s a counterintuitive lesson you’ve learned from a failed deal?
Jim Ferry (00:42:32): I think maybe this isn’t counterintuitive, but don’t chase the hype cycles. I mentioned that earlier. I think in a hype cycle environment, there’s too much funding for certain industries, which creates a lot of problems when it comes to customer acquisition and retention. And so for the most part, stay away from that. We’ve made an investment here or there where in hindsight, you’re like, that was a little hypey. And those are the ones that have tended not to work out, to be honest.
Brian Bell (00:42:58): So yeah, staying disciplined on your investing approach, investing in good companies with good founders.
Jim Ferry (00:43:03): Yeah, like we’ve made a lot of money on Sexy Industries, as I mentioned, like compliance has been a big one for Volition as a whole. I’ve done less there, but one of the other partners has made a lot of money on that. And like, it’s not very fun to talk about, but compliance and supply chain compliance is one where we’ve done really well.
Brian Bell (00:43:19): You weren’t doing growth equity. What would you be doing?
Jim Ferry (00:43:22): I’d probably be at a startup, to be honest. I think I’d probably be in the finance function. I just get a lot of energy working with startups. Some of my portfolio companies, I feel like almost an extension to their leadership team where I’m in Slack channels talking to them every single day. And that’s fun and energizing to me and feeling like I can make an impact. I think I would like that. But I do love my job now where I get to work on a lot of different types of companies. I think that’s part of the intellectual. It’s stimulating for me.
Brian Bell (00:43:51): How will you or Volition Capital look different in the next five or 10 years?
Jim Ferry (00:43:55): I talked a little bit about how we don’t want to scale the fund size too quick and get out of the asset class where we’ve had success from an investment perspective. So I think the fund is going to continue to kind of methodically get bigger. I sure will see us going, all right, next fund’s $2 billion, I think. Because we don’t have the infrastructure to deploy that without moving on market. So I think we’re going to look very similar to the way that we do today. There’s probably, as funds get bigger, because we don’t want check size to get really that much bigger than we are today. Probably means there’s more partners, which is a great opportunity for a lot of people at this firm today. But I think it looks pretty similar, to be honest.
Brian Bell (00:44:29): Well, I really enjoyed the conversation, Jim. Thanks for coming on.
Jim Ferry (00:44:32): Yeah, Brian, thank you so much. This was fun.
