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New! Illinois Dept. of Commerce & Economic Opportunity

Overview:
This role is at the Illinois Department of Commerce & Economic Opportunity (DCEO) and a part of the team implementing the $114 million Illinois Innovation Venture Fund (INVENT), a direct equity venture capital program funded through the federal State Small Business Credit Initiative (SSBCI). This is a supervisor-level position and will oversee 1-4 staff while managing the day-to-day operations of the program’s activities, such as deal sourcing, due diligence, coordinating approvals, deal closing, monitoring, reporting, compliance, etc. The Investment Manager will report to the Venture Capital Program Manager.

Applicants can apply here: https://illinois.jobs2web.com/job/Chicago-VCP-Investment-Manager-IL-60661/1173671200/

New! Sandbox Industries

Sandbox Industries

We are seeking passionate and self-motivated people to join our growing clinical innovation investment team. Within clinical innovation, our team seeks to invest in precision medicine, diagnostics, medical devices, and artificial intelligence for diagnosis, treatment, and trials. This role offers tremendous growth opportunities and exposure across the entire investment lifecycle. We are looking for a candidate who is self-motivated, detail oriented, and intellectually curious and is excited to contribute to our team’s growth.

Responsibilities:

  • Lead thoughtful and in-depth due diligence on companies of all stages and support investment committee presentations
  • Source potential investment opportunities
  • Perform financial modeling and analysis of growth and venture stage companies
  • Record all deal information for reporting and trend analysis
  • Research and report on industry trends and potential new business models
  • Cultivate and manage relationships with key industry contacts, including limited partners
  • Assist in all aspects of portfolio company management

Experience:

  • 6+ years’ experience in an investing role
  • Experience leading deal processes, building financial models and conducting financial analysis required
  • Demonstrated interest and understanding of medical technologies, digital health, and the broader hospital and payor ecosystem
  • In addition to a bachelor’s degree, an advanced degree or background in life sciences, biomedical engineering, or related medical field is highly preferred

Skills:

  • Excellent verbal and written communication skills, with the ability to articulate complex ideas clearly
  • Strong interpersonal skills with the ability to build relationships and network within the med-tech and venture capital communities
  • Strong analytical and quantitative skills with proficiency in financial modeling and valuation
  • Intellectual curiosity and ability to ask hard questions within complex domains, including comfort and familiarity with scientific technical due diligence
  • Track record of good judgment and ability to navigate ambiguity
  • Ability to prioritize and manage multiple initiatives in a fast-paced, entrepreneurial environment

General:

  • This role is based in Austin, TX, Chicago, IL, or Palo Alto, CA, with occasional travel
  • Sandbox Industries compensation has a long-term outlook and philosophy. Base pay range for this role is $150k - $200k, commensurate with experience. Position is eligible for discretionary bonuses based on individual, team and company performance.

About Sandbox

Sandbox Industries invest in innovation to drive lasting change across healthcare, insurance, and sustainability. In line with our mission, Sandbox Industries has served as the exclusive provider of investment management services to the Blue Venture Funds for over a decade.

The Blue Venture Fund, a unique collaboration among Blue Cross Blue Shield companies, the Blue Cross Blue Shield Association, and Sandbox Industries, is owned, governed and capitalized by participating Blue Plans and affiliates. The Blue Venture Fund invests in venture and growth opportunities within healthcare technology, healthcare services and clinical sciences. Within clinical innovation, our team seeks to invest in precision medicine, diagnostics, medical devices, and artificial intelligence for diagnosis, treatment, and trials.

Sandbox is an Equal Opportunity Employer and considers applicants for employment without regard to race, color, religion, sex, orientation, national origin, age, disability, genetics or any other basis forbidden under federal, state, or local law.

Please find link to the job portal here

Onward Capital

Onward Capital

Position Title: Vice President

Job Type: Full-Time

Job Description:

About the Firm:

Onward Capital is a Chicago-based private equity firm focused on investing in and growing lower middle-market industrial businesses. Onward targets manufacturing and value-added distribution companies, typically with revenues between $20 million and $125 million. The Onward Partners have completed 60 private equity transactions and invested $600 million dollars of capital in the sector. For more information on Onward Capital, please visit www.onwardcapllc.com.  More about Onward Capital HERE!

About the Role

The Vice President will have the unique opportunity to become the first employee of an established independent sponsor. They will help to shape the firm from the ground up, taking a leading role in sourcing, executing, and managing investments. The successful candidate will be comfortable working on a small team in a fast-paced and entrepreneurial environment. They will have constant interaction with senior members of the firm as well as the senior management of our portfolio companies.  The Vice President will be given significant responsibility including:

  • Evaluation of potential investments
  • Analysis and support for portfolio company management
  • Supporting senior investment team members in all aspects of transaction execution
  • Designing, structuring, and carrying out due diligence analyses, including industry research, market and competitive assessments, financial modeling and analysis
  • Composing deal related documents and presentation materials
  • Participating in meetings with management teams, intermediaries, and financing sources
  • Active board member or board observer roles
  • Involvement in a range of firm-building activities, including business development, lender management, recruiting, training, etc.

Qualifications:

  • Minimum of 4 years of work experience required
  • Prior investment banking experience required
  • Prior private equity experience preferred
  • Strong business analysis and financial modeling skills
  • Genuine interest in investing and high intellectual curiosity
  • Outstanding interpersonal, leadership, and communication skills
  • Self-starter

Work Authorization: US Work Authorization Required
Job Functions: Finance - Private Equity

Contact:

Laura Lester, llester@onwardcapllc.com

Pfingsten Partners

ASSOCIATE POSITION

Pfingsten is looking to add an Associate to our Corporate Finance team in Chicago.

Company Description:

Pfingsten is a Chicago-based, operationally-driven private equity firm that invests in manufacturing, distribution and business services companies with revenue between $20 to $150 million and EBITDA between $3 to $12 million.  Since 1989, Pfingsten has completed 55 platform transactions and 109 add-on acquisitions. For more information on Pfingsten, please visit www.pfingsten.com.

Position Description:

Associates interact directly with all members of the firm and our portfolio companies and they will have a high degree of freedom to make a meaningful contribution to our firm’s future.  There is no set duration for Pfingsten’s Associate position. The strongest performers will have the opportunity to grow into additional responsibility with the firm. 

Responsibilities will include, but are not limited to:

  • Participate in all functional areas of the transaction process (initial screening, due diligence, portfolio management, add-on acquisitions and divestitures)
  • Support the due diligence process on new investments (internal analysis and modeling plus direct interaction with third party professional service and financing providers)
  • Develop industry sector analysis to originate new, direct investments
  • Support portfolio companies (direct interaction with portfolio company executives and Pfingsten’s operations team)
  • Assist in business development and other marketing efforts
  • Other administrative support, as needed, including investor reporting activities

Desired Qualifications:

  • 2+ years of investment banking experience or 3+ years of transaction advisory or consulting experience
  • Demonstrated leadership ability and interpersonal skills
  • Strong written and oral communication skills
  • Excellent analytical and organization skills
  • Advanced proficiency in all Microsoft products (Excel, Word, PowerPoint, etc.)
  • Self-motivated individual with a strong work ethic and ability to work in a small team environment
  • Attention to detail
  • High integrity
  • Bachelor’s degree in Finance or Accounting

Start Date:

Immediate or Q1 2024

Contact: 

Phil Bronsteatter pbronsteatter@pfingsten.com

Sandbox Industries

Sandbox Industries invests in innovation to drive lasting change in human livelihood by fostering innovation across healthcare, insurance, and sustainability. We incorporate the best of traditional and corporate investing firms. Approximately 90% of the capital we manage is from strategic limited partners – large industry incumbents who are eager to embrace the innovations and technologies disrupting their businesses through a market-based approach. We partner with entrepreneurs who are seeking to make an impact on areas of high strategic value to corporate organizations, as well as with these organizations themselves. The primary medium for this work is venture capital.

In line with our mission, Sandbox Industries has served as the exclusive provider of investment management services to the Blue Venture Funds for over a decade. The Blue Venture Fund, a unique collaboration among Blue Cross Blue Shield companies, the Blue Cross Blue Shield Association, and Sandbox Industries, is owned, governed and capitalized by participating Blue Plans and affiliates. The Blue Venture Fund invests in venture and growth opportunities within healthcare technology, healthcare services and clinical sciences.

Associate Position

We are seeking passionate and self-motivated people to join our healthcare investment team to support all

aspects of the investment process. Our team is open, thoughtful, and collaborative.

Responsibilities:

  • Perform financial modeling and analysis of growth and venture stage companies
  • Conduct investment due diligence on companies of all stages, seed through growth
  • Record all deal information for reporting and trend analysis
  • Research and report on industry trends and potential new business models
  • Support Investment Committee presentations and manage relationships across the Blue plan ecosystem and broader healthcare industry
  • Assist in all aspects of portfolio company management
  • Source potential investment opportunities

Experience:

  • 2-5 years’ experience
  • Financial modeling and analysis experience required
  • Healthcare finance, strategy or operating experience strongly preferred

Skills:

  • Strong communication (oral and written) and presentation skills
  • Excellent financial modeling, valuation, and analytical skills
  • Intellectual curiosity and ability to ask hard questions
  • Demonstrated interpersonal and relationship-building skills
  • Track record of good judgment and ability to navigate ambiguity
  • Ability to prioritize and manage multiple initiatives in a fast-paced, entrepreneurial environment

Location:

  • Chicago, Illinois
  • Investment team members are expected to work in Sandbox’s office on Monday, Tuesday and Wednesday of each week

Please contact hctrecruiting@sandboxindustries.com if you are interested.

Sandbox is an Equal Opportunity Employer and considers applicants for employment without regard to race, color, religion, sex, orientation, national origin, age, disability, genetics or any other basis forbidden under federal, state, or local law.

Svoboda Capital Partners

Job Title:  Private Equity Associate

Company: 

Svoboda Capital Partners

1 N. Franklin Street, Suite 1105

Chicago, IL 60606

www.svoco.com

Company Description:

Svoboda Capital Partners, LLC (“SCP”) was founded in 1998 to invest in and help build business services and value-added distribution companies. SCP invests in leveraged buyouts, recapitalizations, and growth equity opportunities. SCP targets middle market growth companies which typically have between $10 million to $100 million in revenue and $3 million to $15 million in EBITDA.

Job Description:

Assist in identifying, evaluating, and executing potential acquisitions through due diligence, market research and financial modeling. Assist in the development and ongoing management of portfolio companies, including portfolio company and investor financial reporting. Assist in initiating and maintaining relationships with intermediaries and other investment sources.

The position requires direct interaction with the principals of SCP and top management of portfolio companies and offers a highly challenging and diverse experience. Position will be originally structured for a two-year term, but the opportunity for a third year may exist.

Desired Qualifications:

A self-starter who is looking to grow with the position.  Strong analytical and interpersonal skills. Minimum 2 years’ previous experience in investment banking, corporate finance, credit/lending, public accounting or private equity is preferred.

Date needed:

Spring 2023

Salary Range:

Competitive, based on experience

Contacts:

David Rubin

P: (312) 267-8756

E-Mail: drubin@svoco.com

Will King

P: (312) 267-8744

E-Mail: wking@svoco.com

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Private Investing in Private Companies

Venture Capital

 

Venture capital is money provided by outside investors for financing new, growing, or struggling businesses. Such investments are generally high risk, but offer the potential for above-average returns.

The influence of such investment extends beyond financial contribution. Many venture capitalists are highly active within their individual firms, aiding in the development of new products and services. By bringing experience, expertise, and business savvy to these enterprises, VCs can significantly influence corporate investment decisions and thus the area's economy.

Private Equity

 

Private equity serves a variety of purposes, and companies are frequently rejuvenated when acquired or funded by such a firm.

Buyouts fund an investor's purchase of full control of a business. This may involve (a) purchasing the majority of stock in a private division of a parent company when the parent divests it or (b) buying majority stock in a private company along with its management team in a management buyout. When buyout funding is supplemented by additional money borrowed from lenders, it is referred to as a leveraged buyout.

Acquisition financing involves the use of private equity capital for consolidating an industry segment through the purchase of other companies.

Turnaround financing refers to capital invested in a company that is bankrupt or otherwise non-performing. With turnaround financing, a party with capital and management expertise acquires the business to improve its operations.

Statistics and examples highlighting the value of other private equity are outlined below:

  • Since January 2002, Illinois companies have raised $4.2 billion in non-venture private equity. Illinois-based funds manage $57 billion of other private equity assets.
  • Willis Stein & Partners, a Chicago private equity firm, acquired Jay's Potato Chips out of bankruptcy in March 2004. By March 2005, revenue trends were positive, the company had introduced several new products, and 400 jobs were saved.

Private Equity Is a Major Industry in Its Own Right

 

Apart from the impact of their portfolio companies, private equity firms represent a major business sector of Illinois.

Illinois is the headquarters for more than 100 private equity firms that manage funds totaling $77 billion, of which $65 billion is directly invested in companies and $12 billion is managed by funds-of-funds, which invest directly in private equity firms. Of the directly invested funds, $8 billion is venture capital and $57 billion is other private equity.

Over the past twenty years, private equity investment generated average annual returns of 13.7%. According to that rate, Illinois-based funds produce an estimated $6 billion in average annual returns to investors. These investors are primarily pensions, universities, and foundations, which reveals the vital role private equity plays in providing income for retirement, higher education, research, and charitable giving.

Private equity firms are large supporters of Illinois' professional services sector, including legal, accounting, and consulting services. Based on an IVCA member survey, Illinois private equity firms pay service providers an annual average of about $1.7 million each, or $168 million in yearly total revenue.

The preceding numbers exclude private equity firms headquartered or with funds managed outside of Illinois. IVCA estimates that another 200 private equity firms operate in Illinois, including branches of out-of-state firms and firms that serve as advisors or brokers for funds that they do not manage.

FAQs About Venture Capital & Private Equity

Private equity is an investment asset class describing private investments in privately held (as opposed to publicly traded) companies. As an asset class, private equity investments are very illiquid; investment commitments have typical durations of 7 - 10 years.

Private equity firms receive their investment capital from Limited Partners (LPs). These LPs are frequently pension funds, foundations, and endowments which have large amounts of capital to invest. Private equity is generally part of an LP's overall investment strategy that may include real estate, bonds, and publicly traded company stock.

The goal of every private equity firm is to generate a higher-than-market rate of return for its investors. The S&P 500 is a typical benchmark against which returns are measured. The private equity industry generates returns by investing in the stock of private companies and subsequently generating a capital gain on that stock when the company is sold or becomes publicly traded.

A private equity firm typically has one or more funds that it manages. Each fund will have a stated investment strategy that describes aspects of investments it prefers. These preferences may include:

  • Industries
  • Geography
  • Stage of deals, e.g., pre-revenue or post-revenue, growing or mature
  • Size of total investment

Each fund has a General Partner (GP). The general partner is responsible for:

  • Selecting the best investments or portfolio companies for a fund
  • Working with the management of these portfolio companies to increase the value of the initial investment
  • Developing a strategy for the fund to exit the investment within a given time frame

Private Equity falls into two broad groups: venture capital and other private equity.

Venture capital describes investments in companies that are in the early life-cycle stages. Typically, venture capital finances new, rapidly growing businesses. Venture capital investments are generally high-risk investments but offer the potential for returns well above the S&P 500. Venture capital is an important source of equity for start-up companies.

Most other private equity is invested in more mature or later-stage companies. Frequently, other private equity is a source of liquidity for owners of privately held companies. Often, other private equity is referred to as leveraged buyouts (LBOs) or management buyouts (MBOs).

Buyout financing, or acquisition financing, funds the purchase by an investor of full control of a business, or it finances the purchase by other new owners. Buyout firms-another form of private equity-may buy the majority of the stock of a private division of a parent company when the parent divests it. Or they may buy the majority of the stock of a company, along with its management team, when the company's owner is ready to sell. A leveraged buyout is when buyout funding is supplemented by additional money borrowed from lenders.

The IVCA references Thomson Venture Economics' terminology, which defines the following stages:

  • Venture Capital
    • Seed stage: Product development, market research
    • Start-up financing: Key mgmt. in place, initial marketing, pre-sales
    • Other early stage: Product in development or available, first institutional financing
    • Expansion/growth stage: Product shipping, funds needed for working capital or plant expansion
    • Later Stage: Stable growth rate, likely to be profitable, cash flow positive
    • Bridge financing: Company to go public in 6 - 12 months
  • Other Private Equity
    • Open market: Company is publicly traded
    • Acquisitions: LBOs, acquisitions, recapitalizations
    • Mgmt/leveraged buyout: Management acquiring a product line or business at any stage of development
    • Turnaround: Operationally or financially troubled

Private equity is a favored asset class for professional managers because it has historically produced superior returns. Annual returns over the past twenty years have averaged 13.7%, beating stocks, bonds, real estate, and most other forms of investment. Its risk is a reference to the importance of spreading investments over long time periods, in multiple industry sectors, and in a large number of investments. Professional money managers know how to do so, which is why private equity has a prominent place in large investment portfolios, even in conservative ones like those of pension funds and universities.

By law, private equity investments are open mainly to accredited investors, which are basically institutional investors and experienced individuals with resources appropriate for the long-term, illiquid nature of private equity. Exceptions include small numbers of friends and family, who often participate in seed financing. However, as indicated above, it is ordinary citizens like pensioners who ultimately benefit from the returns generated by venture capital, and the general public benefits immensely from the economic impact of the investments made.

In Illinois, The Illinois Teachers Retirement System, the Illinois State Employees' Retirement System, Northwestern University, University of Chicago, and the MacArthur Foundation are just a few. The goal of every private equity investor is to receive a higher-than-market rate of return for their investors.

These firms generate money in annual fee income which goes directly into the state's economy in the form of payroll for the firms' employees, rent, and a large variety of service fees paid to the lawyers, accountants, and other professionals who support these firms. In addition, the managers of these firms will pay the state taxes on capital gains generated.

Venture capital investments create jobs-great jobs.

On average, 75% of venture capital investment is spent on payroll, and venture capitalists generally estimate compensation per-employee at their portfolio companies to be $100,000 per year. Consequently, each $1 million of venture capital directly creates or sustains seven and one-half skilled, high-paying jobs.

  • For every job directly created, another 2.2 jobs are indirectly created through the multiplier effect.
  • Over time, companies that are originally financed with venture capital grow to become major employers.

Beyond jobs, venture capital drives sales, taxes, exports, and R&D.

  • Per $1,000, companies backed by venture capital have approximately twice the sales, pay almost three times the federal taxes, generate almost twice the exports, and invest almost three times as much in R&D as the average company that is not backed by venture capital.

Other private equity firms have been responsible for reinvigorating failing or mature businesses/industries. These firms generate annual fee income which goes directly into the state's economy in the form of payroll for the firms' employees, rent, and a large variety of service fees paid to the lawyers, accountants and other professionals who support these firms. In addition, the managers of these firms will pay state taxes on the capital gains generated.

For all of the economic reasons we discussed above. In addition, private equity returns historically exceed those of the S&P. Prudent investments in the asset class have returned, on average, 15.7% annually versus 15.2% for the S&P. Annuitants in the public pension funds would benefit from an appropriate allocation to this asset class. Moreover, returns being equal, investments in Illinois funds drive employment and a strong tax base. 

Venture Capital Definitions

Early Stage Financing
Seed Stage Financing

At this stage, a relatively small amount of capital is made available in order to support an investor or entrepreneur in proving a concept and qualifying for start-up capital. This may involve product development and market research as well as building a management team and developing a business plan if the initial steps are successful. Seed stage financing is pre-marketing stage.

Start-up Financing

This stage involves financing companies that are completing development, and may include initial marketing efforts. Companies may be in the process of organizing or may have been in business for one year or less, but have not sold their products commercially. Usually, such firms will have conducted market studies, assembled key management, developed a business plan, and prepared to begin conducting business.

Other Early Stage Financing

Other early stage financing includes an increase in valuation, total size, and per-share price for companies whose products are either in development or commercially unavailable. This stage involves the first round of financing following a company's start-up phase and involves an institutional venture capital fund. Seed and start-up financing tend to involve angel investors more than institutional investors. The networking capabilities of the venture capitalist are used more here than in advanced stages.

Expansion/Growth Stage
Expansion/Growth Stage Financing

This stage involves working capital for the initial expansion of a company that is producing, shipping, and has growing accounts receivable and inventories. It may or may not be showing a profit. Some of the uses of capital may include further plant expansion, marketing, working capital, or development of an improved product. More institutional investors are likely to be included along with investors from previous rounds. The venture capitalist's role in this stage evolves from a supportive role to a more strategic role.

Later Stage

Capital in this stage is provided for companies that have reached a fairly stable growth rate, that is, they are no longer growing as fast as the rates attained in the expansion stages. Again, these companies may or may not be profitable, but are more likely to be than in previous stages, and their financial characteristics include positive cash flow.

Bridge Financing

This stage applies to a company that plans to go public within six months to a year. Often, bridge financing is structured so that it can be repaid from the proceeds of a public underwriting. It can also involve restructuring of major stockholder positions through secondary transactions. Restructuring is undertaken if there are early investors who want to reduce or liquidate their positions, or if management has changed and the stockholdings of the former management, their relatives, and associates are bought out to relieve a potential oversupply when public.

Acquisition/Buyout
Acquisition Financing

This stage provides funds to finance acquiring another company. Included in this category would be mezzanine financing using subordinated debt and bridge loans used to finance LBOs, acquisitions, and recapitalizations.

Management/Leveraged Buyout

These funds enable an operating management group to acquire a product line of a public or private company at any stage of development. Often, these companies are closely held and family owned. Management/leveraged buyouts usually involve revitalizing an operation, with entrepreneurial management acquiring a significant equity interest.

Turnaround

This stage involves financing provided to a company with the intention of improving performance at a time of operational or financial difficulty. This stage includes financing that involves restructuring equity.

Source: Thomson Venture Economics

Case Studies

The IVCA Private Equity Profiles is a continuing series of portraits of Illinois venture capital and private equity investments, spotlights companies that are emerging or proven successes. Each account furnishes information about the company and the private equity firm or firms that invested in it, illuminating the important role they play in nurturing the companies. To submit a case study for a Midwest company backed by an IVCA member firm download this form.