Raido Capital Partners

We congratulate AI trailblazers Trey Holterman and the founding team at Tennr, Diego Baugh and Tyler Johnson on their incredible execution since we invested in their seed round. You can read about their latest $37M Series B Raise led by Lightspeed, with follow ons from Andreessen Horowitz and Foundation Capital and their next chapter here 👉🏼https://lnkd.in/eyCptW79. Special shout out to Jennifer Kaehms (Key Ventures) and Foundation Capital for bringing us along initially.

While some may slow down on Day 2, we went even bigger! Together with FTI Consulting and White & Case LLP, we hosted a 3 hour cocktail extravaganza (YES, we said 3 hours!) and welcomed more than a hundred of our members, friends and colleagues (and even some regulators)! Special thanks to Elizabeth Glaser, Janet Hale, CRCM, CERP, Josh Drobnyk and Rachel Rodman for joining our own Rebecca O'Mara and Phil Goldfeder for a very busy and truly memorable evening in #LasVegas! Throughout the day we met with so many amazing partners and members but few who could match the energy and smarts of Maxime Seguineau and Vincent Toesca of Raido Capital Partners, Joe Maxwell of JAM FINTOP and of course Laura Kornhauser, CEO and Co-Founder of Stratyfy! Come find us on Day 3!

Key Takeaways From The McGuireWoods LLP Independent Sponsor Conference McGuireWoods LLP hosted its annual event this week in Dallas, TX, bringing together capital allocators and a wide variety of independent sponsors, with attendance at all time high. Below are key takeaways, highlighting a thriving independent sponsor community and the growing relevance of the model in a shifting allocation landscape. 💸 Fundless: the fundless model is increasingly relevant in lower middle market private equity. The trend is toward deal-by-deal investments, where each transaction is analyzed and funded individually rather than through a committed closed-end fund structure. This approach allows for greater flexibility across business cycles and often leads to better stakeholder alignment. 🤝 Aligned: independent sponsors typically commit more of their own resources upfront to bring vetted deals to allocators and ensure successful deal execution instead of relying on recurring management fees. They are primarily motivated by the equity upside embedded in each deal. In the deal-by-deal model, there is more reputational and brand equity at stake. Allocators and sponsors also actively collaborate on due diligence, forming deeper relationships and trust over time. 🎯 Specialized: while generalist sponsors still abound, most capital allocators are looking for focused sponsors that bring deep industry knowledge and strategic insight. There will be more specialized pools of capital in the lower middle market as investors demand unique and differentiated approach to increase alpha capture. 👩✈️ Operator-Led: historically, many lower middle market funds were led by professionals with a financial background. Increasingly, fundless sponsors are being founded or run by former operators. They also tend to leverage industry experts and partners to accelerate the value creation process at their companies. Operators bring a hands-on understanding of how businesses operate, which is vital for smaller companies that often need more than just financial engineering to grow and achieve operating efficiencies. 🌟 Value Creating: independent sponsors tend to find unique deal situations at a discount relative to larger peers, with incremental value created over time through operational improvements. These lower middle market deployments will combine both organic and inorganic (M&A) growth strategies to scale revenue and EBITDA from a low base. This helps support a more robust multiple expansion than is typically realized in larger deals, while delivering strong risk-adjusted returns.

Raido Capital Partners will be at the McGuireWoods LLP Independent Sponsor Conference in Dallas, TX the next few days. I am excited about all the upcoming meetings, and the largest turnout yet for the event. We are looking forward to discussing and sharing ideas with sponsors and investors in the growth equity and lower middle-market buyout space. We make growth-oriented equity technology investments in areas such as banking, CFO stack, compliance, data & analytics, insurance, payments, trading or wealth management. #MWISC24 Vincent Toesca

Raido Capital Partners will be at the McGuireWoods LLP Independent Sponsor Conference in Dallas, TX the next few days. I am excited about all the upcoming meetings, and the largest turnout yet for the event. We are looking forward to discussing and sharing ideas with sponsors and investors in the growth equity and lower middle-market buyout space. We make growth-oriented equity technology investments in areas such as banking, CFO stack, compliance, data & analytics, insurance, payments, trading or wealth management. #MWISC24 Vincent Toesca

7 Takeaways From The Spring Labs AI Native Banking & Fintech Conference American Fintech Council and Spring Labs hosted a fantastic event this week to discuss #AI at the University of Utah! Below are key takeaways, highlighting the opportunity for vendors to work closely with financial institutions. Special thanks to John Sun, Phil Goldfeder and all speakers. Congrats to Kalyani Ramadurgam (Kobalt Labs) and Eden Full Goh (Mobot) on showcasing winning use cases. ⛽️ Efficiency Paradigm: intelligent automation was highlighted as a critical tool for streamlining repetitive tasks, such as fraud detection and customer service, enabling faster and more accurate decision-making. This is especially relevant for fintechs, which are leveraging AI copilots to enhance operational efficiency. 📂 Compliance and Risk Management: AI's ability to monitor regulatory risks and consumer complaints in real-time was a central topic. Early warning systems powered by AI can detect potential violations before they escalate, helping banks and fintechs stay ahead of compliance issues. However, managing biases, counteracting third-party AI and understanding the nuances in data remain significant hurdles. 💳 Underwriting and Expanding Credit Access: panelists explored how AI can improve credit risk assessments by incorporating alternative data, allowing lenders to offer better rates and include underserved communities. They also discussed the potential bias risks in models and the need for industry-wide transparency standards to ensure fair lending. 🔎 Transparency Requirements: discussions centered on the emerging role of generative AI and the need for transparency in its deployment. Regulators emphasized that AI's usage must align with existing laws, and consumers should be informed when AI is being used in interactions like customer service. 🏦 Bank-Fintech Partnerships: intelligent augmentation plays a crucial role in making partnerships more efficient by improving complex onboarding and vetting processes, as well as vendor oversight and dispute resolution. These technologies are helping both banks and fintechs scale and manage relationships better. 👩🏻💻 Adoption Barriers and Long-Term Potential: while AI’s potential is significant, adoption remains slow due to regulatory complexities and legacy systems in many financial institutions. Discussions pointed toward targeted use cases in risk management and operational processes as the next frontier, with compliance automation as a long-term goal. 📊 Data Challenges: a side conversation with executives from a large Credit Union highlighted an often overlooked practical challenge: before embracing AI, many FIs need to modernize their data storage, modeling, and security capabilities. This overhaul can be a gargantuan task, particularly for organizations not originally built like technology firms. This prerequisite to harness AI's potential is often underestimated by those outside financial institutions.

Does strategic money win better? Strategic investors, such as Corporate Venture Capital (CVC) firms, can be attractive additions to a cap table for companies looking to demonstrate and validate industry adoption, while reducing downside risk. 🙌🏻 Domain Expertise According to the recent State of CVC 2024 report (Silicon Valley Bank, Counterpart Ventures), 28% of global venture deals involve CVC participation. CVCs bring capital coupled with industry expertise and potentially lucrative contracts. Involving established industry incumbents can bring a stronger sense of collaboration and strategic alignment which ultimately benefit a broader portfolio of companies. For example, in financial technology, these investors provide not only capital but also regulatory support, market access, commercial partnerships and operational expertise that help companies scale profitably. 🎯 Improved Odds  Strategic investors are often looking to solve their own pain points and stay ahead of the innovation curve. They understand that real use cases, customer references and production deployments matter for enterprise value creation. This means focusing on helping startups build initial enterprise customer relationships which can be parlayed into useful testimonials to win future business. According to the Silicon Valley Bank report, CVC-backed companies have a lower failure rate. CVC-backed startups are also twice as likely to progress to the next funding round, and ultimately exits. 🪨 GTM Efficiency This data highlights the positive benefits of partnering with domain experts, focusing on demonstrable product market fit rather than chasing hyper-growth through high burn. In fact, strategic partnerships or the prospect of an acquisition often provide more stability and allow companies to focus on profitable scaling. In short: startup executives and their boards should consider engaging corporate investors as an alternative way to leapfrog competition. The right CVC can provide tangible strategic augmentation through early commercial endorsement and referenceability, while creating implicit downside protection.

We’re excited that Maxime Seguineau from Raido Capital Partners will be attending the Spring Labs AI-Native Banking & Fintech Conference in Salt Lake City on October 7th. We look forward to meeting there! This conference will be a one-of-a-kind opportunity to dive into real-world generative AI use cases in financial services, with insights from regulators, technology innovators in the financial domain, and leading banks. Register here 👉🏼 https://lnkd.in/dpQAxX9n

Maxime Seguineau and Vincent Toesca will be attending Coolwater Capital's Demo Day in NYC on September 24th, 2024! Over the past 5 years Coolwater has helped launch over 256 funds which have invested in over 8,000 companies. Along with another 175 family offices, institutional investors, and C-suite executives who are actively backing emerging VC managers, we can’t wait to catch up with our friends in the Coolwater community! #CoolwaterCapital #DemoDay #NYC #LPs #GPs #CoolwaterCohort #BuildProgram Winter Mead Sean Chung David Teten Raphael Leopold