Welcome to our Member Spotlight series where we give a profile overview of our many diverse members. For this deep dive, we spoke to Chris Ladd, Partner at NewRoad Capital Partners, to learn more about his firm.
Tell us about your firm. What makes it different?
When we launched NewRoad Capital Partners nine years ago, we developed a differentiated investment philosophy based on three key approaches.
Operator Focused: Our view of the world has been shaped by our own experiences operating businesses. As experienced entrepreneurs and operators, the NewRoad team prides itself on the high level of collaboration we bring to each of our investments. We have learned the journey is most fruitful when partnered with like-minded people that share an obsession to improve their business. We love to bring together people fueled by an entrepreneurial spirit, innovative thinking, and a drive for success.
Demand Driven: We are keenly focused on demand. We look to invest in proven and innovative technologies, products, and services that serve both existing and unmet needs in the marketplace. We believe demand, in the form of a product or service being pulled into the market, is a key validation point in a company’s business model. In addition to capital, we provide knowledge, expertise and industry connectivity that come from our experience as entrepreneurs and operators. We pride ourselves on our ability to help propel companies with proven and quantifiable demand into their next stage of growth.
Purpose: We also believe that companies built on a strong purpose with deep rooted core values outperform those that lack an understanding of what makes them special and the definitive difference they want to make in the world.
In addition, we are headquartered in Northwest Arkansas, which provides a few distinct advantages. First, we have an eye for, and an appreciation of, businesses that were built outside the small handful of highly capital-saturated markets in the U.S. Second, our location has influenced the sectors in which we invest (Supply Chain & Logistics and CPG/Retail). The region is the supply chain / logistics and CPG/retail cornerstone of the country and is the home to three Fortune 500 headquarters, #1 Walmart, #73 Tyson Foods and #315 JB Hunt. This in turn has also enabled us to attract the highest quality Operating Partners, including, Doug Degn, Chris Sultemeier, Tracy Black, Scott Huff, and Michele Meyer.
We believe the combination of all these elements gives us a differentiated approach to venture capital investing that makes us better investors but also better partners for the companies in which we choose to invest.
In short, we approach each investment as a partnership with the management team. We look for founder-owned businesses with strong management teams and enterprise level demand-driven business models where we can leverage our industry network and operational expertise to further accelerate growth.
What defines your portfolio?
Our most recent fund, NewRoad Fund III (2018 Vintage), has seen extraordinary growth across each of its investments. Managing that growth and scaling at the pace needed to meet the market demand is something that each of the portfolio companies is currently navigating. More generally, our portfolio of companies across our three funds is built around our ability to add value as an active investor. In practice, we are focused on finding and partnering with businesses at a “tipping point” at which we can inject capital and help to take them to the next level. This means investing where we can bring our deep industry expertise and understanding of enterprise to bear. Northwest Arkansas is the supply chain / logistics and CPG/retail cornerstone of the country. We have the depth of experience and understanding of these sectors needed to truly help accelerate the growth of our portfolio companies.
Tell us about the current VC landscape in your geography/region.
The VC landscape in Northwest Arkansas continues to grow. In recent years, accelerators like Plug & Play Supply Chain & Logistics and Endeavor have established a presence here in recognition of the growth we have seen in the broader region. Going forward, we expect continued investment from the key pillars of the region and the broader business community that will serve as a tailwind for future expansion. Importantly, NewRoad focuses its sourcing efforts across the U.S. with an emphasis on finding opportunities outside most highly saturated capital markets.
What are the benefits of being an NVCA member?
We have continuously been impressed and benefitted from the resources NVCA provides to its members and the VC community. We are fervent consumers of NVCA’s research and insights it provides through its publications, webinars, and blog. Perhaps most importantly, we laud NVCA for its policy work, helping to promote and facilitate entrepreneurship across the U.S.
What’s ahead for your firm in 2021?
In the second half of the year, we are focused on several strategic opportunities for our portfolio companies, including a few large capital raises and potential liquidity events. The markets remain highly active and we are ensuring that we work with our portfolio companies at this time to take advantage of these overall conditions. Simultaneously, we are continuing to see very good opportunities in our targeted investment areas and given the pacing of our investments we may possibly be nearly fully deployed in our most recent fund, NewRoad Fund III, by year end.
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