Episode 69: Devon Kirk and Jonathan Metrick of Portage 
on How Investment and Ops Teams Can Work Together 

Episode Transcript  

Shiv: All right, Devon, Jonathan, welcome to the show. How's it going?

Devon: Great, thanks for having us on.

Jonathan: Doing well, Shiv. Good to see you.

Shiv: Yeah, excited to have you and why don't we start with introductions. So Devon, we'll start with you and then we'll go to Jonathan.

Devon: Perfect. So Devon Kirk, I co-head the later stage strategy at Portage, which we call Portage Capital Solutions. I've been an investor in FinTech and financials for coming on 20 years now and really happy to be on.

Shiv: Excellent, Jonathan.

Jonathan: Yeah, my name is Jonathan Metrick. I also work at Portage, of course. I head up our go-to-market practice on our value creation team. That's basically helping our FinTech and financial services portfolio companies with marketing, sales, growth, everything related to revenue acceleration. I've been at Portage for the last five years, but I'm an operator by craft and I spent my entire career kind of leading marketing teams across various different industries, most often in FinTech and scale-ups.

Shiv: That's awesome. And what's interesting here is normally we have one side or one type of role on the podcast at a time. So here we get to have the investment side and the operating side of a firm together. So Devon, why don't we start with you? Like, what are the types of investments that you're looking for at Portage as you're looking to deploy your capital?

Devon: So Portage does all FinTech and financial services investing and we've got two strategies. One is on the venture side where we focus on kind of seed through B investing. And then we have the later stage strategy that picks up where they leave off doing C and later. All minority investing, combination of kind of plain vanilla traditional growth equity and more bespoke less dilutive solutions for companies as well. You know in the later stage strategy we look for businesses that have proven product market fit. So typically revenues in the $20 million plus range. Clear path to profitability if they're not there already and really an important lens for us, which I'm sure we'll talk more about today, is that we really believe that we're the right partner and that we can add value as they look to scale their business.

Shiv: And how do you figure that out? Is it primarily in the FinTech space and it has to be growing at a certain rate? Like what are some of the characteristics that you filter companies through, whether it's on the seat side or the later stage side?

Devon: Yeah, absolutely. So we look for businesses that have healthy growth. The venture side is very focused on really top quartile growers. The later stage side, we're looking at a wider variety of metrics, but always looking to invest in healthy businesses, ideally with relatively kind of sticky revenues, high customer satisfaction, diversification in customers, products that are differentiated that gives us conviction on not just their ability to scale but really kind of the strong foundation that they're building on.

Shiv: Yeah, one of the things that, because we have so many investors on the podcast, we hear similar things, right? Like growing strong, strong growth year over year, good net revenue retention or CSAT ratings or NPS scores. And those kinds of assets tend to go at premiums and there's a ton of competition and a bunch of investors would want to deploy capital into those assets. So how do you differentiate yourself or stand out from other investors that are pursuing similar, similar targets?

Devon: So I do think that our sector specialization is massively helpful from that perspective. It clearly allows us to have deep expertise in the spaces that we're investing in. And I think, frankly, we've gone through a more challenging market environment over the last few years. And I think that reminds management teams and folks around the boardroom table that they really want people there who understand the business, both the opportunities and the threats. So I think that is really important. It also allows us to have more tailored resources for our portfolio companies. And so, you know, Jonathan is an example, you know, as you think about kind of our go to market support that we can provide, if we have, you know, a portfolio of more than 100 FinTech businesses, you know, a mix of D2C and B2B business models, there's a lot of insights that we can bring to bear around kind of what we've seen be successful over time in different geographies, in response to whatever's happening in the market at that particular moment in time. And so having a value creation team that are operators in the space, understand the space, or spending time with other companies in the space day in, day out, makes a big difference as well. And lastly, I would really say network. So that's something we really pride ourselves in as an organization. We have a whole team of people whose full-time job is to cultivate commercial opportunities for our portfolio companies. And again, when you're focused on a specific sector, it really allows them to be systematic in how they cultivate those relationships that are going to be relevant for our portcos and make more targeted, mutually beneficial introductions as opposed to being kind of more opportunistic or scattershot around it.

Shiv: And this is a good transition to the work you do, Jonathan. So talk about like, as these companies are being invested into, how are you looking at value creation, especially when there are some overlaps and strategies or markets that they're kind of focusing on or targeting?

Jonathan: Yeah, absolutely. I mean, as Devon kind of called out, we focus on FinTech and financial services. I used to be the CMO of a venture stage insurance marketplace. Many of the folks who are working at Portage have come from that industry and we've been working in that industry for many years and actually have been often operating in those sorts of companies. So the context is immediately linear. And I think the other component that's very useful as we look at our value creation efforts is, you know, we invest globally, right? And there are different trends that happen that you can port over if something's emerging in the United States. Well, you know, in six to 12 months that might hit Canada and Western Europe from a kind of macro trend perspective. How do we get in front of those sorts of trends and port those across that knowledge across our portfolio globally? Because, you know, we tend to see FinTech financial services firms with more geographic champions in one region as opposed to kind of a global dominant player.

Shiv: Can you give us an example of that? Something that might be one geography or market might be ahead of, and then you can kind of port that over, at least forecast how another company could benefit from that.

Jonathan: Yeah. I mean, a really great example that we saw in real time was during the peak of the pandemic, the rollout and kind of adoption of TikTok, right? So March, 2020, you everyone's locked at home, they're bored, they're on their phone and, know, everyone cut their marketing budgets back, especially in the B2C version, because they were like, my goodness, what's going to happen is the economy going to crater. And, you you saw basically starting in April, you know, there was an emergence of the very savvy B2C companies starting to test this new channel called TikTok. And there was a ton of volume on it, not a lot of advertisers because budgets were restricted. And you saw this adoption wave of first US based B2C businesses seeing efficiencies on TikTok that then cascaded over into Canada a couple of months later, Western Europe within six months and then actually around what, you know, kind of Mexico, but a year later. And we enabled our portfolio companies to ride that wave because obviously in our conversations with our US-based businesses, we're like, wow, this is a really great channel that's brand new, that's super cost efficient from a CAC perspective. And we're kind of tapping our Canadian and European and Mexican businesses to say, hey, by the way, you may want to take a look at this because this trend is emerging.

Shiv: What about the, and that's a great example. What about like overlaps in markets and customer bases? Like I'm looking at a couple of your portfolio companies like KOHO and Wealthsimple, I would imagine, have a ton of overlap in the types of customers they can kind of focus on given that you're investors in both. Do you try to encourage partnerships or cross-sell opportunities or integrations between platforms like that?

Devon: Yeah, we absolutely do try to encourage partnerships across our portfolio companies. We do that in kind of more formal ways, but also more informal ways. You know, just a couple of weeks ago, we got a bunch of our CEOs from our portcos together in Whistler, you know, as a fantastic opportunity for them to really get to understand each other's businesses. There's a lot of kind of peer mentorship that happens there, but also commercial opportunities that get discussed. So there's certainly opportunities there. And there's also situations where they're going after, you know, on the B2B side where they may be approaching similar enterprise customers and opportunities to partner from that perspective.

Shiv: Yeah, Jonathan, I want to give you a chance to jump in there too. I think you may have had something to add there.

Jonathan: Yeah, mean, think so building on what Devon said, we invest in B2C and B2B. So we have some portfolio companies that are the consumer facing entity of FinTech, but then we have the B2B company that's doing the piping in the back end. And so there's a lot of linkages we can actually have saying, hey, you're looking for this sort of solution. We've actually invested in this actual company on the back end and creating those linkages for kind of creating end-to-end FinTech solutions. And even in the Canadian marketplace, which you mentioned, two companies I've personally worked very closely with, Wealthsimple and KOHO, really they're going up against these incumbent banks. And so the competition truly is the kind of legacy, sleepy carriers that a lot of folks are using for their financial services. How should we be innovating that category? And by and large, it's better to kind of partner and share ideas and collab, because they're going up against well-funded incumbents.

Shiv: Are there situations and maybe it's a question for Devon, like are there situations where you look to certain companies in the portfolio where there's not just like a partnership opportunity, but also like an M&A opportunity where these companies can actually eventually become part of one core platform and have multiple products instead of being separate companies?

Devon: So we haven't had a lot of examples of that. There's certainly potential for M&A within the portfolio. Obviously, we'd be really mindful of our role in those transactions if we're on both sides. So we need to be a little bit cautious there. I think, frankly, there hasn't been as much consolidation in the FinTech sector as people might have expected over the last few years. I think there is a good chance that that accelerates over the next few years. So it may be something we start to see more of, but you can imagine, you know, we're conscious of not investing in businesses that are directly competitive. So sometimes the synergies associated with combining businesses within our portfolio would not be as high as the potential synergies of combining them with businesses outside of our portfolio.

Shiv: And I guess because you're a seed stage slash to series B type of investor and then also C and later, you kind of see companies at different stages of maturity and growth. So Jonathan, like on the operational side, how are you, you navigating that? I know you've written this article on CMO success stage by stage and some other content around those things. So I'm just curious, like when you think about growing these companies at different stages of maturity, what type of frameworks are you bringing? Or is it a very similar process as you're looking at these companies?

Jonathan: Yeah, I mean, it's an interesting vantage point for us to be able to take a look at FinTech companies as they scale. And I think, I'll take a look at the commercial function as an example, because that's where I work and go to market. The jobs to be done of a B2C or a B2B company are actually the same, right? You have a product, you have a target audience, you need to get that product in front of them cost efficiently. And that's what you're looking to do. How you do it though, changes by stage and the maturity curve of your business and kind of what you're looking to do in the macro environment at that stage. Often we find the core principles are unifying, but how you're operationalizing them changes by the size of company you are. And we can help them chart that next step forward is part of our work.

Shiv: Yeah. And what does that look like, Jonathan, in terms of figuring out the next step? Just a hypothetical example, let's say you have a series C business that's $20 million in ARR and there's a growth opportunity in front of it. It's more B2B versus a series A business that's maybe three to five million. But it's more B2C. Give us an example of how you would adjust your approach based on that.

Jonathan: Yeah, I mean, this is one of the great things why, you know, Devon and I are on this podcast is because we have the vantage point to see if your series B, where will you be going in two to three years? And if you're going to be migrating and, you know, elevating to a different asset class, well, you know, the venture team might be talking to Devon saying, Hey, what does good look like? And so Devon, think, you know, this is where having an early stage venture business and a later stage growth business is so useful, because we're taking best practices, but we're like, you in two to three years, you know, you need to be doing and solving for these things.

Devon: Yeah. And maybe just to really simplify it, I think at that venture stage, the thesis is so much around potential. And as you start to become more mature, investors are looking also for elements of resilience. And that's going to look different depending on your business model. In the go-to-market area, it might be an expectation that you've got multiple channels and that you're not just adding new logos, but you're also growing with existing customers. And so those kind of different drivers of growth become important and that can end up influencing org structure. Similarly, from a bunch of other dimensions, right? You're thinking about resilience from a technology perspective, scalability, security, all of those types of things as well. And that can create incremental organizational needs.

Jonathan: Ya and what's been really cool as well, is if you take a look at our earlier stage businesses, seed series, A series B, they're kind of more the speed boats. And so they have the smallest resources, but they're often the most innovative. And so we're able to actually take emergent technology trends, best practices, and kind of port that over to later stage businesses, which may be looking for the next kind of trend. But the benefit they're bringing back to the earlier stage businesses is this is where you need to go. This is the structure you might need to have. This is the kind of reporting and kind of financial metrics that you're going to need. So there is actually a virtuous cycle that we kind of connect. And, for example, we host a growth summit every year in New York where all the commercial and tech leaders across our global FinTech portfolio come and share best practices and ideas. And so early stage businesses can share, hey, this is the hottest new technology we're trying as a kind of growth hack and vice versa. The later stage businesses can share, well, this is best practices at scale. And that's a really useful information transfer that we kind of facilitate across our portfolio.

Shiv: Yeah, that's great. I think a lot of the PE firms that we talked to that are doing some of this cross- pollination work have a summit like that, maybe have an online community, maybe do ongoing webinars and learning sessions with all their leaders. So I think that's great. How do you both, given that you're on, kind of different sides of the house of these investments, how closely do you partner throughout the investment cycle and pre-LOI then LOI, then the deal closes, first 100 days, you know you're doing the value creation planning. In some PE firms, we find that the operating partners are not brought in even until close. Sometimes it's brought in at the LOI stage, but not before. And in some of the best ones, we've seen a pre-LOI. So I'm just curious, like how you guys end up partnering together. And maybe we'll start with you, Devon.

Devon: Yeah, so I would say it's pretty comprehensive. I can't think of any deal that we've done where Jonathan's team and other teams within our value creation group are not involved at the relatively early stages of diligence. They're certainly involved in helping us scope key questions, reviewing data around those areas, et cetera. And then of course, the mode of engagement post-closing differs a lot depending on the needs of the company. Sometimes we have companies where we say, there's not a lot of need for Jonathan's team, but there's a lot of need for maybe our M&A team or maybe our cybersecurity team or our technology team or AI team or other things that we're going to focus on. But as you say, it's very linked to that kind of risks and opportunities that we've identified. You know, also kind of what other resources are available. So, you know, is step one trying to upskill the management team, you know, augment the management team in this area? Is it something more tactical that we're going to, you know, connect them to some resources on? So it's very bespoke.

Shiv: And Jonathan, on your side, like in the investment cycle, like how are you making sure you're adding as much value as possible? And then how does that translate post close?

Jonathan: Yeah, I mean, we work incredibly closely, right? And I think, you know, what's really interesting for even us on the operating side, you know, I work very closely with Devon's team and, you know, what's helpful even on that vector is when we're doing due diligence in advance of taking a look at a business, you know, we're working closely with the investment team on, know, what does good look like, right? And there's been a lot of kind of macro shifting lately in terms of growth at all costs. And as long as you're growing your good, to actually know its profitability and efficiency. And my team's job is to kind of work with our portfolio companies to action kind of delivering the results. But where should we be going? What's the goalpost? And the investment teams are the ones that really know this best. So they're often working very closely with us to say, hey, these sort of metrics look really good for a business like this. And this is why because the cost of capital's changed and the benchmarks in the industry are different. So really, we're getting a ton of insight from Devon's team on the financial models that they're building. And then we're kind of feeding back, okay, well, how realistic do we think this model is to actually be executed? So it's a pretty seamless back and forth, but we really do kind of bring different lenses to the table on how do we think we can make this business grow?

Shiv: And Jonathan, on your side, how do you approach the operating function and how big is your team? Are you relying on the internal folks? Do you have external partners? You kind of, because I've also noticed that you mentioned Wealthsimple and KOHO, then you've been an interim leader inside those businesses. So how do you approach value creation with the portfolio companies or the investments that are being made?

Jonathan: Yeah, I mean, it's definitely, you know, we take a look at areas that are thematically relevant for multiple of our portfolio. So things like marketing attribution and measurement, evergreen topic, could be a seed company, you could be pre-IPO or later. You need to be able to think about measurement and attribution and do that properly. And so I have a small team below me that assists, but we partner with external agencies that we've vetted, to say, okay, if a portfolio company needs a little bit of help with attribution, this might be a great solution for them. And, or, you know, I've worked very closely with Devon's team on recruiting. So if we want to be bringing in a new CMO, that's B2B in North America, this would probably be the best recruiting agency versus if we're doing that placement in Germany, we might partner with someone else. So we definitely look to kind of third party agencies, partners, consultants, advisors, to kind of expand our reach because geographically it's different.

Devon: Yeah, I'm sure we have a large number of our portcos that would love to have Jonathan or others from our value creation team embedded full time with them. But they also know that they're not looking for a short term solution. They need something that's going to last and scale. And so we try to approach it in a scalable way from that perspective so that we're putting in place the infrastructure that will survive our investment in the business.

Shiv: Yeah, I was talking to one of our larger private equity partners and they had spent the last few years building a really large operations team. And then recently they actually shortened, reduced that team significantly and built like this hub and spoke model where they can rely more on external partners. And I was asking the person that leads that team, like, why did you do this? And they said, just at a global level, it requires too much internal hiring for them to staff out and support all the portfolio companies. It's better to have a Rolodex of experts to kind of call on based on the needs of the businesses. So that definitely resonates. Jonathan, when you're coming into investments that aren't made or it's in the diligence process, what kinds of things are you looking for on the go-to-market side to support the value creation planning or the investment thesis?

Jonathan: Yeah, mean, so it really starts again partnering very closely with the investment team like Devon's team, right? So we often have a meeting in advance to say, given this sort of business, what are some of the assumptions we're taking a look at that are really critical for our valuation model? And maybe some questions that, you know, obviously investment team has spoken to them first, but they may have some questions in the go to market area that they would like us to double click into. And so typically, you know, those areas might be things around, you know, LTV to CAC, you know, how are we thinking about the cost structures of marketing moving forward versus the ability to cross sell and upsell and expand LTV? So LTV to CAC is often an area we take a look at. And then also functional capabilities within the firm itself. So what is the data infrastructure MarTech stack look like? Is it up to snuff or is it kind of gaps in an area that we want to lean into if we invest? And then the talent of the team. Right? Do we feel confident, you know, the investment team is creating an underwriting thesis and what we think we're going to do from a value creation perspective. Do we think that team is the right team to be able to action it? But really a lot of that comes from guidance from like Devon and, you know, us bringing our go-to-market expertise into their kind of investment thesis.

Shiv: And then on your side, Devon, as you're kind of evaluating these investments, are there certain things that Jonathan and his team can kind of bring back that would change your mind? Because a lot of diligence that we see is almost like confirmatory, right? Once the LOIs send, are quite, or firms are kind of pot committed, if you will, to, or resigned to kind of making the deal happen. So what percentage of the time is like an insight from Jonathan and his team coming back and changing your decision on the investment and whether or not the deal will close?

Devon: So it's one of the reasons why we try to get them involved early before we put a term sheet forward, right? Because that's when you're looking for signals on how excited you are about this business. And if Jonathan's coming back saying, I don't think their go-to-market function is strong, I don't think they're gonna be able to sustain those tacks as they grow. And maybe we're getting some other data points on other areas of the business, you know, that definitely is going to impact A, whether we move forward with the opportunity and B, how if we do move forward, how we think about terms on that deal, right? It's going to impact our forecast and ultimately valuation. And so that is, that's, you know, where we really see it having the biggest impact. And frankly, you know, we see that being hugely valuable, not just for the companies that we engage in, that we can kind of have a more informed view earlier. But also like allocation of resources from our teams perspective because the worst outcome for anyone is you get into exclusivity under a term sheet and then you realize something is going to make you not want to do the deal as you say. So fortunately we haven't had that happen but we certainly as we're doing confirmatory diligence we're refining our assumptions and really building that like 100 day planning and view on where we can add the most value. And so that piece of the work is really, really helpful, both from our perspective. And so we're aligning with the management team, right? Because maybe the one thing that's worse than walking away after you've signed a term sheet is closing a deal and then concluding that you've got a completely different view on what needs to change or be augmented in the business and the management team. So again, bringing forward those discussions and figuring out if there's alignment there and openness to feedback on the part of the management team is really helpful.

Shiv: Yeah, I'm really glad you said that. There's some PE firms that I've seen that pre-LOI, it's almost like a financial exercise. So they will look at your historical numbers, your revenue growth, your EBITDA, and then they will make the decision to submit a term sheet, everything gets signed. And then during diligence, all this stuff comes out that they haven't had a chance to look at yet that changes the terms of the agreement and then deals kind of fall apart. Right? So I think that's a great practice. And even for the investors that'll be listening to this, think moving some of this work, even pre-LOI increases your odds of success or at least deploying resources in the right areas.

Devon: Yeah, exactly. And it's always a balance. Companies don't want you asking for tons of data when you don't have a high degree of conviction. So I do think investors need to balance that piece. But that is where having really experienced folks like Jonathan, who can pretty efficiently assess a team, focus on some key metrics, spot red flags, works well for all parties.

Shiv: Right. Yeah. And I think Jonathan, I guess a question for you is like, how are you doing that in such an earlier stage without full access? Like I can tell you, like we do a ton of marketing, do diligence work for private equity firms. Sometimes it's pre-LOI as well outside and we don't have access to the team or even a data room. So I'm just curious on your side, like how do you go about doing some of that analysis?

Jonathan: Yeah. I mean, again, this gets back to why it's so useful for us to have such an industry and sector focus. Right? So we have a sense of already, okay, what does good retention look like in insurance? Or what sort of LTV to CAC ratio is realistic in payments or in wealth management? And so we don't really have to be doing the first turns at that because we've often seen other businesses or have other businesses like that in our portfolio. So there's an element of that piece, even from a channel perspective, right? Like typically if you're a B2C business in FinTech, you're kind of on some of the same channels, right? Like, I don't know a lot of people who are using Pinterest to sell their banking solutions. And so that helps us speed up a little bit of the due diligence because we've seen a lot more of those pieces in other businesses that we've surveyed with Devon's team or within our current portfolio. Um, and then again, there's an element too of there is only so much, course you can get into until you get the data room or, you know, I got to talk to, you know, if we're going to cut a big check, like, yeah, I got to really talk to the team, right? Because you can kind of get a really good sense in five, 10, 15, 20 minutes of live IRL back and forth versus, know, just taking a look at the data room. So different stages, obviously, as you go through the different funnel of due diligence. But again, I think being industry focused really allows us to get there faster than I think others who are ramping up to both the company and the industry during due diligence.

Shiv: Yeah, yeah, I think that's a really interesting point. Because you have industry expertise, the benchmarks are more reliable than, let's say, a company that just invests in middle market companies. And Devon, I'll give you two minutes. I think you wanted to add something there.

Devon: Yeah, I was just going to say, you know, as I think about Jonathan's term, like the diligence funnel, part of it is, you know, at the initial stages, you're giving management more of the benefit of the doubt, right? It's a little bit kind of asking them the questions and then, you know, trusting what they are telling you on, you know, why CAC went from X to Y or those sorts of things. And then at the later stages, it's more about verifying that. And so that's a helpful way to limit the burden on companies is you sort of get the narrative, identify the risks, the opportunities, the things that you're going to have to kind of prove at a later stage, but you're not doing kind of all of that much more granular work upfront. And hopefully they know their business well, have high integrity, et cetera, and there's not going to be surprises down the line.

Shiv: That's great. And then the last area I wanted to touch on is because you are in FinTech and you are seeing so many common threads throughout these businesses. I'm just curious from an investment standpoint, Devon, like what are you seeing on the AI front and innovations happening in that space? And how are you also encouraging companies to look at AI as a growth lever or product lever for their businesses?

Devon: Yeah, so we have invested in some AI businesses, so companies whose core product is very much leveraging AI. And then we invest in a whole bunch of other businesses that are using AI to be more effective at various elements of their business. I think obviously there's different opportunities around both of those. I think there's incredible opportunity to be leveraging AI across pretty much every business model. But we're still seeing those use cases very much getting proven out. And I think in the FinTech space, which tends to have more regulation, often you're selling into counterparties that are maybe a little bit more conservative in how they think about these things. We're seeing that that journey is gonna take time, right? So things like using gen AI to improve your customer service or your cycle time on product dev work is more common. Using AI for credit decisioning, for example, in the US, we're probably a little ways away from, though some of the changes at the CFPB of late may expedite that.

Shiv: Yeah, right. And I'm sure there's also components that can be implemented versus, like, sweeping changes that are more global, I guess.

Devon: Yeah, that's right. I think there's a lot of experimentation, sandboxing stuff that's going on right now. And yeah, it's a sort of sense of how you start to build some skills and comfort amongst your team around AI in sort of low risk areas.

Shiv: Got it. And then I guess for you, Jonathan, on the operating side, because we talk about AI, even we were talking about the before this podcast started, the platform that we're working on, but just curious on as an operating leader, like how are you incorporating AI into your practice on the value creation side to make these businesses more efficient?

Jonathan: Yeah, on a few fronts. We've actually, have a head of AI that we've brought in. And so she's an expert and her team is an expert on basically what are the fundamental principles that one should be applying when you're thinking about AI testing, validation, experimentation. And then, you know, we'll partner and say, okay, how does that apply to go-to-market? Right. And so I'm working very closely with our portfolio companies on, as Devon teed up, okay can we automate or create an agent that could be a replacement SDR? What would that look like functionally within go-to-market? And the nice thing around that is, you know, a few of our companies are actually in the pilot stage of that. And we've connected them to share their early learnings and best practices. And so we're porting that knowledge over across for the folks who are testing those pieces. Other areas I see as it relates to go-to-market are things like lead scoring. How do we think about kind of validating lead information in a way that's a little bit more automated so that if we’ve got to funnel leads to a salesperson, we're getting the best lead, highest quality lead to that person first. So similar to Devon's tee up, I think it's in the early innings of seeing what will work, but we are working functionally on point solutions within our go-to-market teams that we're porting over knowledge globally to.

Shiv: That's great. And what about on the go-to-market side when you think about things like content or specific channels that, let's say Google search volume is down. This idea of generative engine optimization is emerging now versus SEO, right? So we have some clients that have experienced a significant drop in traffic because the vertical that they're in is searching more on tools like ChatGPT. So I'm just curious, are you seeing some of that and what adjustments are you making with the companies on that front?

Jonathan: Yeah. I mean, that topic of the go-to-market collapse, which I hadn't heard about in, you know, recently, but it's all over LinkedIn now of, you used to be generating volume according to, you know, Google and suddenly, you know, your consumer journey path has shifted to ChatGPT or the jobs to be done is now easier solved on ChatGPT than Google. What does that mean if you're a business that was generating a ton of traffic on Google? And so that is an area that we are watching very closely. And you know, this is the benefit of having a global platform. I mean, I'm based in New York. And you know, I work very closely with a firm that didn't exist nine months ago and they already have, you know, two to 3 million ARR because they're basically creating the SEMrush of generative search. And so, you know, what will that look like? How will that bake out? We're not sure, but you know, our portfolio companies in Europe are dialing into that startup because we're able to kind of connect those dots. So there's definitely emerging spaces like generative AI, but candidly, I'm always a glass half full person. That's why I think the growth space is so interesting. The market continues to move and it will reward the companies that are watching the trends, looking at the data, experimenting and finding the new path forward.

Shiv: What's the name of that startup? The gen AI?

Jonathan: Profound. Really cool. Yeah, I can connect to you after Shiv if you want to. They're great. James is the founder, ex Uber, great guy.

Shiv: Yeah. Awesome, yeah, that's a competitor for Inquisio, so we'll look into that. And then I guess my secondary question would be, Devon, for you on that, especially in FinTech or financial services, so many companies look at, it's like they're, like I'm thinking about a company like Nesto in your portfolio, their homepage is basically lead gen, right? You fill out a form, mortgage application, whatever it is, and then you enter into a sales process. So how is this type of a shift with search moving over or the risks associated with go-to-market there affecting your investment decisions as you're evaluating companies.

Devon: Yeah, it's a great question. It almost goes back to the point I was making earlier around resilience, right? That for, you know, at the later stage, we really want businesses that have because things do happen. And so a lot of that kind later stage underwriting is around stress testing, the potential impact of different realistic scenarios on both the upside and downside perspective. What I will say is really helpful on a lot of this stuff is understanding where the company you're looking at is different than their peers. So if everyone has been using Google, then yes, a pullback from Google might impact them, but as long as they can be faster to adapt than their peers, it's not going to hurt their market share, and it's probably not going to hurt their position long term. And so it is a bit about understanding relative positioning and strength of the team and data-driven orientation of the team in terms of spotting things and responding.

Shiv: Yeah, I think that's great. Especially this point about relative, because if the entire market is impacted by them, the entire market has to respond and find that customer base some other way. So I think that's a great point. I know we're coming up on time here. So before we close off, just any closing thoughts or what's the best way if people want to learn more about Portage, how should they find either of you?

Devon: So both of us are on LinkedIn, so that's always a great way to find us. We've got a website that talks a bit more about the strategies and importantly has our portcos up there. So if you want to get a better sense of where we've been investing, that's always a great way to do it as well.

Shiv: Excellent. And with that said, Jonathan, Devon, thanks for coming on and sharing your wisdom. I think it was especially helpful to hear the deal team and the operating team kind of talk about how they work together. We actually haven't done that type of an episode. And I think a lot of people that listen and have those respective teams will learn a lot from it. So I appreciate you doing this.

Devon: Thanks for having us.

Jonathan: Thank you for having us on to chat.