Currently ranked: 6
Previously ranked: 7
Let others get caught up in the fads, hype cycles, and volatility of technology investing. FTV Capital has been employing pretty much the same formula for nearly 20 years with remarkably steady results — better than steady, considering that it seeks out portfolio companies with at least 20 percent historical and near-term revenue growth. Managing partner Richard Garman, a former payments company executive who joined the San Francisco firm, then Financial Technology Ventures, in 1999, stresses “evolution, not revolution.” FTV makes growth equity investments, not long-shot bets on start-ups, yet has realized returns in excess of $2.5 billion since raising the first of its five funds (adding up to $2.7 billion in total capital). The firm says that within three years after it invests, its portfolio companies’ average compound annual revenue growth is a high-flying 85 percent.
The momentum results from “consistently executing and staying disciplined,” says Garman’s New York–based counterpart, Brad Bernstein, who joined FTV from Oak Hill Capital Management in 2003. Bernstein says that FTV’s Global Partner Network deserves much of the credit for steering the firm and its portfolio choices in the right direction. An FTV invention that predated the proliferation of accelerators and ecosystems, the network brings limited partners and financial and technology industry executives together with entrepreneurs.
“We come away from these meetings with ideas that we then synthesize into investment theses,” Garman said after FTV’s annual partner conference in September, which attracted 200 people. These interactions have led to hundreds of sales contracts for the portfolio companies. The pace of deals is as steady as everything else around FTV. Investments led by the firm this year include a $19 million series D round for fast-growing digital-identity company ID.me and a $56 million financing for India-based research firm MarketsandMarkets.
