Why we started ParkerGale

We formed ParkerGale in 2015 to create an accessible, helpful, transparent, and friendly (maybe not the first adjectives that pop into your mind when you think "private equity") firm. Here is some insight behind our founding from something we wrote back then.

We like founders

We started our firm for founders and management teams, building technology companies the hard way – with their own money. Not all technology companies raise venture capital. In fact, most don't. But you wouldn't know that from reading the popular press. How could you? It's so much more fun to write about college dropouts hitting it big with some disruptive new technology. When a startup raises $100 million, that's big news. And it should be. And these stories get more clicks and likes than ones about middle-aged founders bootstrapping their way to a dull, profitable business.

We buy companies from founders. We are your exit, but with a twist. When you decide it's time to sell, let us know. We buy a majority interest in your company, you keep a piece for yourself, and we help you and your team attack that next big push for growth. You get financial security and get to participate in the upside the future can bring. Your team gets equity in the business so that they can build wealth along the way, too. And we bring in a ton of resources to help you break through those sticky challenges all small companies face when trying to grow.

Why do we work with founder-owned companies? We like underdogs. Because when underdogs start to walk with a little more swagger, then the big guys need to watch out. That's the kind of challenge we like. We also like it because founder-owned companies are in tune with the market, the team, and the product. We can do many things with the business that you just haven't gotten around to yet, so we like the upside opportunity that it creates for us as investors.

Over our careers, the ParkerGale team has given founders over $500 million in liquidity. And that doesn't include the money they made alongside us after we invested. Which is a lot. We help underdogs win.

Small is good

We are a small team. We don't think private equity scales very well. When you have more money, you either need to invest in more companies or invest bigger dollars per investment. So that means you either need more people or you need to change what you did before by going up-market. For us, there is a high bar for adding more people. Everyone on our team started under someone else on the team at some point over the last 20 years and grew into our current roles over time. We like to grow our own, so the culture seeps into the DNA. Our investment philosophy and execution process becomes second nature.

We have a small fund. Big is the new black in private equity these days. While some big funds are doing great work for their investors, the race can come at the expense of culture, focus, and performance. Staying small helps us keep the bar high on investment decisions and allows us to be picky. As for doing bigger deals, none of us are interested in that. The small end of the market is what we know, it's what we are good at, and it's where we plan to stay. Staying small also makes sure we share our investors' same goals: turn small companies into big companies and small investments into bigger ones. When that happens, we all do well.

We buy small companies. Don't take that the wrong way. By small, we mean a few million in profits and growing fast. We like small companies because they all face similar problems – how to scale growth, keep up with technology changes, and build out a team with the same culture and ambitions as the early employees. We know how to help small companies navigate these issues. We are confident enough in our abilities to put up millions of dollars to do it. Over the years, we've had a lot of success after a lot of hard work, hopefully, some humility, and a healthy dose of good luck.

The market is coming our way

Let's start with what we are not. We are not venture capitalists, growth equity, or debt. Our money goes into owners' pockets, not the companies' balance sheet. The companies we buy don't need capital. Their owners want liquidity, and some help building the business. We fit in between the venture world and the public company space. We think there are about 60,000 private technology companies in that segment across North America, most of them pretty small and great fits for our business. We just need to find two or three of them a year for our investment model to keep pace.

You'll see tons of venture capital, growth equity, middle-market, and large buyout funds in the technology sector. A lot of these firms are becoming brand names. But there are very few firms solely focused on small technology buyouts. When we compete with some of these other funds for new investments, we think that's great. It's excellent for founders because they get more choices. It's great for limited partners because they get to see who the really good investors are. It's great for us because it makes us better when we have to compete for business and even better for us down the road because we have more, bigger funds to sell our companies to eventually.

We love Chicago

We have always known that Chicago gives us an advantage investing in technology. It's just taken twenty years for the rest of the country to figure it out. First, we are outside the vortex. San Francisco, Boston, and Austin are great places to visit, but trying to stay dispassionate while investing when you are deep in the tech fog isn't easy. Chicago has just enough heat to build a great network of techies, but we have just as many friends who've never used Airbnb or heard of SubStack. We think that's healthy and keeps us grounded.

And New York? The cost of living is so high and the dollars sloshing around the PE world are so big that I imagine it's tough to run a small fund strategy without feeling inadequate. Our fees just don't let you roll like the big boys do in NYC, so the pull to get big must be mighty powerful. I love the pizza there, though, and they eat it the right way: pizza is meant to be folded, not eaten with a knife and fork. Sorry, Chicago.

Second, we can get anywhere quickly, and anywhere can get to us. We live on planes, and Chicago gives us a short, direct flight to anywhere. And that adds up over time (especially for the older guys on the team), so when you are on your 95th segment of the year. You can make a day trip to Denver instead of another night at the Hyatt Place. It helps. It's the little things when it comes to travel. Believe me.

Third, people in Chicago root for each other. Over twenty years of doing this, our network of folks who believe in us and want to help is massive. Sure, it's a Midwest thing, but relationships matter here, and Chicago is still small enough that people know if you are one of the good guys or not. And over those years, we have built an unmatched network of advisors, service providers, consultants, executives, vendors, and friends that tap into for connections and work at portfolio companies. And this is the secret to us being able to punch above our weight as a small fund.

Fourth, have you been to Chicago lately? We are absolutely crushing it right now when it comes to the things that really matter – restaurants, art, theater, music, public parks. Man, is it a great time to be living in this city.

We are a team

I left this for last because I would have teared up and not been able to finish this post if I started with it. I'm the crier on the team (I cry just thinking about that scene from The Natural -- you know the one). There aren't more fun, smart, irreverent, hard-working, and passionate people in private equity than the team here at ParkerGale. We love what we do. We love doing it together. And we are pretty darn good at it, too. We know what each of us is good at and can anticipate each other's moves. 

We challenge each other, we cut each other slack, we know how to argue, and we know how to make up. We all like fixing things, and we want to win the right way, even if that means we might miss a few winners along the way. And we work to build and maintain our culture because it's not something that just happens. Culture is deliberate, and it requires constant vigilance from everyone on the team.

We picked a name that tells our story

I guess we should have expected this, but it's the first question we get – what's ParkerGale? Early in Frank Lloyd Wright's career, he designed two houses for the Parker and Gale families in Oak Park, Illinois. He used these successes as the catalyst to launch his own architecture firm in 1893, along with a few colleagues who shared his vision and ambition. At ParkerGale, we tap into that same spirit to use the lessons from our past to build a firm for the future. Ambitious? Yes. But those are our aspirations. And we intend to deliver in our own, small way. Come along and be part of it with us.