Blue Delta Capital Partners has a much larger pool of money to work with as it continues the hunt for strong management teams at government services companies.
Blue Delta Capital Partners has a new $215 million fund and it knows how it wants to spend it.
The playbook for Blue Delta Capital Fund III follows a familiar pattern: make noncontrolling ownership stakes in growth stage government services companies that are headquartered in Greater Washington, D.C.
Companies that fulfill Blue Delta’s criteria for investment will receive between $10 million and $50 million of equity backing from Fund III to support their next phases of growth.
That's a slightly higher amount for portfolio companies and Blue Delta will continue to look for strong management teams as item number one on wish list.
Kevin Robbins, a co-founder and general partner at Blue Delta, said that a CEO and their management team wanting help to chart the next phase of their company’s strategy is top of the agenda within that criteria.
“Folks that are passionate about the mission, customer-first, and want to get better, they want to grow and create enterprise value,” Robbins told me. “They know that they need a partner to coach and mentor them, that’s what we’re looking for.”
Blue Delta has plenty of experience in its brain trust for mentoring, or essentially growth coaching for those businesses. One recent example of that was Blue Delta’s addition of former Perspecta CEO Mac Curtis as a third venture fellow alongside his counterparts CNSI CEO Todd Stottlemyer and Dave Keffer, chief financial officer at Northrop Grumman.
Subsequent to Curtis joining that team, MicroStrategy co-founder Sanju Bansal became the sixth member of Blue Delta’s advisory board that includes several other government market veterans.
Robbins said that as part of Blue Delta’s search for companies to support, they spend as much time meeting with prospective managers as the CEOs in order to further develop relationships for potential future investments.
“We make an investment, grow the company, it gets acquired, the founder may not come back to be a CEO again, but their number two through four were there for the ride,” Robbins said. “If they’ve got good customer intimacy and good employee loyalty, they know what good looks like, they want to do it again we’re thrilled to back them.”
Two examples of CEOs that Robbins cited are Gunnison Consulting CEO Gil Dussek and Client Solution Architects CEO Amy Bleken, both companies which are backed by Blue Delta.
What topic dominates the conversations between many of Blue Delta’s partner companies and their coaches? Human capital issues dominate the discussions for businesses that were already talent-crunched before the current situation, Robbins said.
Where Blue Delta helps in that respect is to work with companies on investing in the second tier of management below the CEO and then the infrastructure below that including program management and business development, Robbins told me.
Blue Delta will also help make the calls for recruiting into many of those leadership positions and tell those candidates they can have real equity in the business.
“When there’s actually going to be value in those shares in an exit event, they can attract and retain that talent,” Robbins said.
Cooley LLP acting as fund counsel for Blue Delta Capital Fund III.