NucleusGrowth (http://www.nucleusgrowth.com/), a new software company founded by Jim Dunham and Mike Smerklo previously of ServiceSource, has announced a partnership with growth capital firm Housatonic Partners as part of deploying NucleusGrowth’s ambitious business strategy. NucleusGrowth’s mission is to identify and invest in successful software companies that can be rapidly scaled, and provide the capital and expertise to make that happen.
“Our goal is to find good companies and help unlock their full potential through a combination of software industry knowledge, operating experience, and capital,” explains Jim Dunham, CEO and Co-Founder of NucleusGrowth.
Non-executive Chairman and Co-Founder Mike Smerklo says that “we have removed the barriers to success in the search process by securing capital and proven software operators up front.”
Several metrics will factor into the decision of whether a company makes a good investment opportunity. Chief among these is founder ownership. NucleusGrowth believes that founder ownership indicates a high level of business knowledge and a dedication to core values – many of today’s best organizations across all industries are founder owned and operated.
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On the finance side, the company seeks businesses with revenue of $5 to $30 million, a growth rate of at least 10%, and a profit margin for the last two years. Such data indicate a strong customer base and adherence to proven best practices. Finally, NucleusGrowth looks favorably on a repeatable sales model, which indicates a good product-to-market fit and a disciplined sales and marketing process.
NucleusGrowth intends to help its investments not just sustain, but also expand upon their success, beginning with the firm taking a majority position in the target company. Next, the NucleusGrowth team will bring its decades of experience to the table in the form of “playbooks” – six fundamental areas of business success. Finally, the company will position the right operators to execute the playbooks and build a rock-solid base for continued revenue growth.
“We are excited to be part of NucleusGrowth,” said Housatonic Partners’ Barry Reynolds. “Our approach is to build companies in cooperation with experienced and entrepreneurial executives like Mike and Jim.”