We started Arcadea as a unique, long-term partner for strongly growing, vertical and niche horizontal software businesses. Creatively structured, independently run and supported by an investor group that thinks in decades not quarters, Arcadea is purpose built for a lasting and supportive relationship with the right businesses. Our approach harkens back to the basics of business and investing, when success was measured over decades, incentives were simple and aligned, and a bespoke approach to each business went without saying.
We look around at the investment world today and think most have it backwards. The incentives are short-term. It’s all about carried interest, maintaining management fees, raising the next (larger) fund or rushing to the public market for a splashy IPO. But for the businesses taking investment or being acquired, this thinking often translates to arbitrarily short-time horizons and imbalanced risk exposure. Achieving full-potential, long-term outcomes for businesses, their people, customers and communities are prioritized behind—rather than in front of—the investor’s returns. It seems like the model serves one half of the equation at the expense of the other.
We go about things differently at Arcadea. At the core of our approach is long-termism—the belief that success should only be measured in the long run. Long-termism helps every aspect of a business, from its products to its customer relationships, employee satisfaction, strategic planning and execution, the legacy of its founders, and ultimately, its financial outcome.
This belief in long-termism extends to the investors we chose to partner with when creating Arcadea. We intentionally sought out those who have generational ambitions for their capital. This small, exceptional group of investors understand and embody long-termism. Many of them are among the world’s most accomplished operators and investors across a diverse cross-section of industries. In a world where the nature of your capital dictates your strategy, we can confidently say that we have the best investor base in the world for a long-term approach.
Our long-term perspective allows us to consider a wide variety of strategic, tactical and financial options for each business we partner with in pursuit of these goals. We steer away from common strategies employed by those with a short-term focus, such as maximum debt, unnecessary and inefficient spending for the sake of the next round’s valuation or growth-stifling, IRR-focused cost reductions to churn out the next acquisition. Those approaches can produce short-term returns for short-term investors but often lead to poor long-term outcomes for the companies themselves.
If you own, lead or know of an independent, vertical or niche horizontal software business with ~$2M to $20M of recurring revenue and growth anywhere up to ~100%, we’d love to hear from you.
For those businesses with the inherent quality, long-range potential, customer centricity and desire to see something that lasts, we think there’s no better partner or home in the world than Arcadea.
We look forward to supporting the next generation of enduring software businesses for many years to come.
—Daniel & Paul