Q&A with Matt Malone of Aegis Texas Venture Fund
May 18, 2008
I ran into Matt Malone at an ACG meeting last week and after reviewing his company’s website I asked him a few questions via email he has given me permission to reprint here. Aegis from the outside (i.e from their website) appears to be a venture capital firm, but in reality as Matt describes, “we are more stretch debt/mezz lenders”.
The company’s website explains, Aegis is a specialty investment firm managing private equity and venture capital funds focused on U.S. small businesses. The Principals have served as advisors to and investors in small businesses for decades, generating significantly above market returns, often by adding value in a management or advisory capacity that goes well beyond the ancillary support services typically provided by investors. Aegis’ senior management team has over five decades of combined experience investing in, managing and operating, and providing investment banking and corporate law services to small businesses. Through sophisticated fund structures, Aegis seeks to provide superior risk-adjusted returns to its investors, often capitalizing on tax-advantaged opportunities for both its portfolio companies and directly for its investors.
Matt has experience growing small and medium-sized businesses. Prior to joining Aegis Matt was VP of Commercial Banking at the Bank of Texas. Prior to that he spent ten years with Citibank, Merrill Lynch and Bank of America. Matt graduated from Texas Tech University with a degree in finance.
Q: What is your roll at Aegis?
A: I am primarily responsible for generating new investment opportunities throughout Texas.
Q: How many deals do you see each month/year?
A: Probably 3-5 per week…no all actionable I might add.
Q: Tell me about a deal that you wouldn’t invest in and why.
A: We will not consider at retailers and real estate development deals. Other than those two industries, we are industry agnostic.
Q: Tell me about a deal that is perfect for your fund.
A: A perfect deal would be for a Texas based business looking for growth capital in the $1-5 million range. The ideal company is fast growing and needs more capital than a bank is comfortable providing. That is typically where we come in.
Q: Tell me about SoftLayer. Why did you invest? What is the future for this company?
A: Unfortunately I did not make this investment (my partner in Houston did). I know very little about the company, although I believe it is doing very well.
Q: Tell me about the poplabs investment. Seems a bit risky? An agency business is typically not a great place for investors, how did you get in this deal?
A: Again, I did not make this investment…ask me about Seda France (investment made in February) or Elevate (made in March). Sorry about that.
Q: Tell me about your favorite deal (something in Dallas preferably).
A: My favorite deal was made in a previous life. Instar Services Group was a roll-up of 5 regional companies who provided restoration and disaster response services. The company was ultimately bought by ServiceMaster. The management team and investor group were great to work with.
Q: How many additional deals will you fund between now and the end of the year?
A: I would hope we would fund another 5 deals this year. We have several term sheet out to prospective companies and the market seems to be very active.
What most impressed me about Aegis was their portfolio list. For a local group it was very impressive:
www.bynari.net, www.commerciant.com, www.elevate-group.com,
www.FiersteinInsurance.com, www.poplabs.com, www.sedafrance.com, www.slmbiz.com, www.smartimtech.com, www.SkyPortGlobal.com, www.teamchampionships.com, www.unwiredbuyer.com, www.VincentPartners.com, www.vuico.com
