Jason Snider: How AI and Technology Are Transforming Private Equity Investment Strategies

Anthony Codispoti : Welcome to another edition of the Inspired Stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codispoti and today’s guest is Jason Snider, partner and Chief Financial Officer at Gauge Capital. They are a private equity firm that specializes in investing in growth companies, helping them scale and achieve sustainable success. They’ve built a reputation for strategic partnerships and long-term value creation. Now, Jason himself has led numerous financial transformations throughout his career, including roles at Leslie Rudd Investment Company and TPG Capital, where he focused on organizational development and operational excellence. He previously served as senior manager at Ernst & Young, which shaped his focus on process efficiency. His background also spans media, entertainment, and oil and gas, giving him a broad perspective on how to navigate financial challenges.

Now today’s episode will be a little bit different. We will be exploring the private equity industry as a whole and how it works. So we’re going to use this as an opportunity to provide our listeners a venture capital, private equity, 101 introduction, where we explore the basics, discuss trends, and get an understanding of where Gauge Capital fits into the big picture. Now before we get into all that good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company and some organizations may not be eligible.

To find out if your company qualifies, contact us today at addbackbenefits.com. Alright back to our guest today, the partner of Gauge Capital, Jason Snider. Thanks for making the time to share your story today.

Jason Snider : It’s great to be here. Thanks for having me. So, another way I’m not the partner, I’m a partner.

Anthony Codispoti : Okay, thank you for correcting my articles there. That is an important distinction. So before we get into sort of the 101 lesson, let’s hear a little bit about your background. You started at Arthur Anderson. Can you tell me what drew you into accounting initially and then what happened when the firm went through its significant challenges?

Jason Snider : Yeah, so first of all, when I was in college, probably like a lot of kids, I didn’t really know what I wanted to do. I was in the business school, you know, was a very curious mind, was interested in political philosophy, interested in politics, but I was trying to find my way through the business school. What I heard from a lot of my counselors and from some of my professors was accounting is the language of business. So I thought, oh okay, I’ll go into accounting. So I went through the accounting track, I was good at it, got really good grades, got a chance for an internship. Doing a little bit of my internship and audit, I found out pretty quickly that I did not want to do audit.

That was pretty clear pretty early on. I knew I didn’t want to do audit. I knew I didn’t want to do tax. So that led me down the consulting route. So somehow I kind of finagled my way into Arthur Anderson into their business consulting practice and started there in 1999, which as we all know is right before the whole in Ron DeBockel with Arthur Anderson, which you alluded to. And yeah, it was an interesting time. I could tell you, we could do a whole podcast and all the interesting stories about that time. I mean, the bottom line is, luckily I was able to find another opportunity outside of Arthur Anderson.

It’s a travesty in my opinion, what happened to that firm is a great culture. We were doing a lot of good work. I could have seen myself growing up through Arthur Anderson. But I learned a lot from that time in my career.

And I also learned a lot about just not taking certain things way too seriously because whoever would have thought that Arthur Anderson would have gone under and would have been indicted by the federal government.

Anthony Codispoti : I mean, they were younger folks who don’t recognize the name. They were one of the big stalwarts.

Jason Snider : They were a pillar. Absolutely. And when that happened, I was three years into my career. And so I’m thinking, gosh, what am I going to do? What’s my next job going to be? But everything turned out for a good reason. And here I am today.

Anthony Codispoti : So I’m going to walk into you. Yeah. And so you did some IPO readiness work and got your first exposure to private equity in 2007 while you were at Ernst and Young. What was it about private equity that really intrigued you and made you think, oh, I like this. This is pretty fascinating. Yeah.

Jason Snider : That’s a good question. So my dad, first of all, he was always an entrepreneur, which is how I ended up in business school. And because I was interested in business, I was interested in companies and the products that companies make and just how they go to market and attract customers. And so I’ve always been interested in business from that perspective.

I mean, the United States was built on a capitalist society. When I was at Arthur Anderson and even Ernst and Young, I always felt like I was on the outside looking in. You’re a consultant. You’re helping businesses.

And you see a very small piece of a business. But I always felt like I never had ownership and accountability for a business. And then, and I knew that when at some point I always wanted to own my own company, I was always talking about and thinking about what do I do kind of on my own. And so when I was at Ernst and Young and I had an opportunity to work with TPG, and I’m sure you’ll have some questions about my time at TPG. When I had a chance to work with TPG and learned about private equity, I mean, it’s like the world came together for me. I was like, wow, this is a really interesting business. Here is a firm that participates in the capital markets, you know, gets capital from investors and invest it directly into companies and then gets to improve those companies and make them better and return capital to those investors. So I was just enamored by the business model, did a good job at Ernst and Young serving my client TPG and luckily got an offer to go to work at TPG and kind of really start my career in private investing. So, yes.

Anthony Codispoti : And you were at TPG for six and a half years before an opportunity came up to move to of all places, which is talk Kansas. That’s right. Yep. Yep. What happened there?

Jason Snider : Yeah. So, TPG was awesome six years there. I knew that if I wanted to further my career, you know, be a CFO, be a COO, etc., it wasn’t going to happen at TPG, most likely big firm, a lot of competition for that role. And so I got an opportunity, I got a call one day from a headhunter and they, you know, in most of the time, you know, unless it’s really something compelling, I just say, thank you, you know, I’m happy with where I’m at.

Anthony Codispoti : But you were learning a lot at TPG,

Jason Snider : very farm-brawled years from here. It was an awesome role. I was seeing the whole firm, you know, traveling all over the world is great. But this SPAC that came across from the headhunter, it was for a family office in Wichita, Kansas. They owned winery assets, beer wine spirit distributorship, a bunch of real estate, you know, roughly a billion of assets under management. It would give me, it would utilize a lot of my skills from TPG, but it would also give me business responsibility, like business operations responsibility. And yeah, it was, it was, it was one of those where it’s like, oh yeah, it’s in Wichita, Kansas, who cares? This is a great business, great opportunity. Talk to my wife about it. And we were off. We were, you know, we were all in Wichita.

Anthony Codispoti : Okay, so you were there for several years. And then I think right around the time of the pandemic, maybe a little bit before you met the founders at Gage Capital. What happened there?

Jason Snider : Yep. So I’ll try to make this short because it is a bit of a long story. One of my buddies from TPG that I worked with at TPG was the tax partner on the Gage account. And he called me up one day and he said, Hey, you know, are you ever looking to get back to Texas? I was like, heck yeah, I’m looking to get back to Texas someday. He’s like, well, I may have the perfect opportunity if you’re interested. And I was like, I don’t know.

I’m really happy, blah, blah, blah. And he’s like, well, just, why don’t you just talk to him? And so I met, you know, one of the founders of the phone late 2019 really hit it off.

Just such a great guy. And then he introduced me to his partner, came into the office, talked to both of them. And it was a different flavor of private equity than what I was used to. I mean, just great, two great founders, humble individuals, mega smart. And it was an opportunity to really, I think, help scale the firm.

I think they were on the second fund at that time. And again, it’s one of those, when opportunities come your way that are obvious, you don’t say no to them. It’s kind of funny. I did, one of the founders would give me crap because I did say no to them a couple of times just because it’s hard to leave where you are. But you know, at the end of the day, it was, you know, right for me and my family. So and a great firm, different breed of firm from my, I think most private equity firms.

Anthony Codispoti : So, you know, different breed in that, I mean, you mentioned, obviously the founders are very bright, I think, which you’re going to find at most firms. But the one thing you said that stuck out to me was very humble. Is that sort of the element of, you know, part of what makes it different there? Absolutely.

Jason Snider : I think, you know, I don’t want to generalize. I think that I have a personal belief that you can be really successful and, you know, really intense on the one hand and really humble and, you know, for lack of a better term, nice on the other hand. And those, those can mix because not all conversations, business conversations and negotiations have to be a conflict.

You know, they can be working together. And I think that our firm, and specifically, you know, because the firm is really kind of a reflection of the founders, I think our firm does that very well. And it starts, it starts with the two founders, but it does permeate throughout the culture. And, and, and when I joined, there were 20 people, roughly 20 people here.

Now we have 70. And I think, I think we’ve done a really good job over the past five years of just growth, kind of keeping that culture intact while, you know, while growing as rapidly as we have. So that’s what I mean by a different breed, because those are the things that, as I’ve gotten older in life, you know, mean more to me as the people you work with, the culture that you work in, because the type of work you do can be a lot of the same from firm to firm or from place to place. And so it really does come down to some of those intangibles.

Anthony Codispoti : And I like what you said about how, you know, negotiations don’t have to be a conflict. There has to be friction there. It’s, hey, how can we find middle ground that works for everybody here? Yeah, absolutely. A much, much better place to operate from.

Okay, so we got some good background now. Let’s kind of move into the, you know, venture capital, private equity 101 lesson here. So whether we’re talking about angel investing, venture capital, private equity, other terms I’m not remembering here. What’s the overall purpose of this?

Jason Snider : Yeah, so I think about venture capital and private equity is it’s another set of markets. So you have your public markets that get capital to public companies that Like the stock market.

Anthony Codispoti : Yeah, on an exchange. NASDAQ, New York Stock Exchange. Exactly. So this, I think about venture capital and private equity is just another set of markets to get capital from private investors to private companies. And those private companies are, you know, they span from your startup, your person in the garage that has an idea and needs some capital to make that idea happen. That’s kind of more the venture capital side of things to private equity, which is, hey, I’ve got a business. It’s got revenue.

It’s got profit. I’ve built this business and now I’m looking to get some liquidity for myself and for my family because I’ve worked the past 20 years trying to grow this business. And so now there’s a set of markets, you know, firms, etc. that will raise capital from investors and invest in these businesses. Take either minority or majority state positions in these businesses with the intent of growing those businesses, getting your return and returning that back to investors.

And we can get into, you know, all the new, there’s a lot of nuance there, but just trying to simplify simplify it. In my mind, BC and PE is really just a set of markets to get capital from those who have it to those who need it to grow or build their business. So a possible chronology could be angel investing, which is sort of more like a friends and family kind of a thing, just trying to get this thing off the ground. Then venture capital, maybe a little bit something here, a little bit momentum.

And then private equity is for companies that have been around a bit longer, they’re a bit more established. And so those would kind of be the different stages of this to think about.

Jason Snider : Yep. That’s that’s how I think about it. And, you know, each of those, each of those stages, if you will, have interim stages. So like you mentioned, angel investing, well, you know, you have some venture capital firms that will only invest at the very beginning of a company, you know, pre revenue or just, you know, barely any revenue at all, you know, kind of a, call it a series A, not to get too technical. You have other venture capital firms that consider themselves more growth equity or growth investors, and they’re investing in kind of series C or a series D. And then you’ve got private equity, which I think about, I mean, VC in my mind is kind of a version of private equity, but kind of core private equity being, hey, you know, here’s a group of founders or other firms that are now looking to get liquidity. They’ve scaled this company to a certain size, a certain amount of profit, and they’re looking to get some liquidity. And we think we can take it even higher with some of our expertise and knowledge and background. And so I really do think about it kind of in those stages.

Anthony Codispoti : And when you talk about getting liquidity, you just mean like being able to take some cash and put it in your pocket. Hey, I put a lot into building this business. I want to take some cash from this, and that cash would come from the investors who come and, you know, take some equity, though.

Jason Snider : That’s right. Again, I know this is simplification, but for your audience, for those who are not well-versed, I think about your mom-paw business, whatever it is, a couple that created a business together. They’ve grown it. They’ve held it for 20, 30 years. It’s been a great source of income for them. It’s really helped to build their own personal wealth, the wealth of their family.

But, you know, they’ve got a lot of their own equity in that business, just like you’d have equity in a house. And at some point, that mom-paw, they want to retire, right? They’re in their 60s, 70s.

They’re ready to spend more time with their grandchildren, whatever. And they’re ready to retire, and they need liquidity to do that. Private equity is a great source for that kind of capital.

Anthony Codispoti : And this is going to lead into my next question, which is, what kinds of companies, whether it’s VC or PE, are they looking to invest in? They’re particular industries, sizes, profitability levels?

Jason Snider : We could probably be here all day listing every single type. I mean, it really spans everything. You talk about hospitals owned by private equity, doctors’ offices are owned by private equity. Your local veterinarian may be owned by private equity. The food that you have in your fridge, your protein powders that you put in to your drinks may be owned by private equity.

Any kind of business. Yeah, your apartment complex could be owned by private equity. The office that you’re in right now could be owned by private equity. And it really spans, I mean, even the toll road that you’re driving on could be owned by private equity. It really, I’ve not looked at the number recently, but I think private equity owns, or controls roughly 7% to 10% of GDP. So it’s pretty ubiquitous.

Anthony Codispoti : And what are some of the, let’s take the dark turn for just a second. What are some of the misconceptions that people have about this space? Sometimes you just kind of see a villain narrative being portrayed in the media. What’s that about? Where does that come from?

Jason Snider : Yeah, well, it may have originated with Pretty Woman, with Richard Gere. If you ever saw that movie, I don’t know the age of your listeners, but I love it.

Anthony Codispoti : It’ll go over the heads of some folks for sure, but that’s all right. Yeah, well, so people should go watch it. It’s a good movie. I’m sure they’ll do a remake at some point. But I mean, if you think back to that character, it’s kind of the image I have in my head, that I think a lot of people have about private equity, which is this cold-hearted, doesn’t care about anybody around them. All he cares about money, you know, goes and invest in companies.

And his intention is to just go break the company up and sell off the pieces and take everything for himself and then move on and do that to the next company. I think that there’s a general stigma in a lot of its fueled by articles. You know, there’s the Toys R Us Debacle several years ago, but just like anything in life, it’s probably, you know, there’s a lot of noise fueled by a few cases that drown out, you know, the good.

And so I do think that PE to some degree has been vilified in media and in movies, et cetera, to some degree. But at the end of the day, private equity investors, and by the way, those investors are pensioners that have firefighters as their recipients and teachers, doctors, policemen, et cetera, as their recipients who are ultimately the investors, these private equity firms are investing in companies that we use their products every day and serve a really important, like I said, very important kind of part of the economy of the world and capital markets of the world. So the vast majority of private equity is not learning, not yearning to do the Richard Geer thing where they, you know, break it down into parts, sell it off.

And, you know, there’s nothing sort of left of what they started with. They’re trying to add value. What is that process of adding value look like? How does a private equity firm or venture capital money add value to a company?

Jason Snider : Yeah, that’s a great question. It’s multifaceted. I’d say the first place, obviously, is, you know, capital. Capital is helpful for companies in terms of growth. You know, you got to have capital to grow. And if you don’t have that capital, it’s hard to grow.

So that’s the first place I’d start. But once a private equity firm is involved, there’s a lot of places that it can add value typically, especially whenever you talk about different, the different kind of market steps in the market. So I’m talking about lower middle market or middle market, which is smaller companies versus really large companies. These smaller companies perhaps may not have a lot of infrastructure.

So private equity firms lend a lot of know-how. You know, how do you scale up? How do you build a management team? How do you select the right kind of talent to take this from a X revenue company to a Y revenue company? We can do that because we have a lot of reps doing it with other companies. We can do that because we have networks of what we call, what the industry may call operating partners, or really what these are, just experts in specific fields like marketing or finance or data and analytics, you know, whatever it may be. But bringing that kind of knowledge to bear with firms that have never, or companies that have never had that kind of expertise is really where a lot of value gets added.

Anthony Codispoti : So a lot of the operational experience that you have, the network partners that you can sort of bring in, it’s not just the cash, it’s how to do things at the next level that maybe the company doesn’t have sort of the infrastructure in place or the experience to kind of do themselves.

Jason Snider : Yeah, I liken it to, you know, a good marriage, right? And I’m sure we’ll come back to it and you’ll hear a theme. For me, it’s all about partnership. And I think, you know, especially for my firm Gage, it’s really about, it’s about partnership. And that is, you know, like in a good marriage, you’ve got a good, you’ve got skills and you’ve got a personality, etc.

And you want to marry someone who just makes you better, because they have a different outlook on life or a different perspective on things and you collaborate. I look at it the same way as is that, you know, private equity is just a partner that comes to the table, it works with you and the intent is to make you better by giving you new skills, new perspectives on how to grow your business.

Anthony Codispoti : So I’m sure that there’s tons of ways to do this, lots of nuances, but what’s the typical structure of a fund look like?

Jason Snider : Yeah, so I’ll try not to get into the weeds. I’ll start at the highest level. So first of all, at a private equity firm, you have a general partner, you’ll hear the term GP a lot or sponsor or manager. There’s the general partner. The general partner is the firm, so Gage is general partner. We make the decisions, we decide what, you know, we want to invest in.

We well, we raise capital, we decide what we want to invest in, we decide, you know, when’s the right time to exit, what kind of services needs to be brought to bear to improve this business. But as a general partner, we have kind of unlimited risk, right? You know, if there’s lawsuits, whatever, you know, God forbid, you know, you have kind of unlimited risk or unlimited at risk. Then you’ve got the limited partner or LP, you know, you’ll hear that people hear that term a lot. You have the limited partner, which is saying, here’s my capital, I want to put it into a fund. And then I expect some level of return over time. But I’m giving you this capital, now it’s drawn down over a period of time, but I’m giving you this capital so you can make good decisions with it, buy businesses, fix them up, and then sell them, and then I’ll get a return from that. So that’s where it starts with the general partner and the limited partner. At that point, it can get quite complicated. But generally speaking, the limited partner is going to pay a management fee to the general partner, that’s typically 2%.

That can vary. And then if the GP, the general partner does their job well, and actually has good returns, then they’re going to get a cut of the profits of the fund. And that’s called carried interest, which I’m sure a lot of people have heard about in the media. And that typically is 20%.

So you make $100 of profit, the GP would take 20, and then the limited partner would take 80. So that’s the very basics. We could do a whole podcast on structuring funds and all that. It’s a real fun conversation, but that’s the basics.

Anthony Codispoti : And so when you’re raising money for a fund, and somebody says, hey, I want to put money in that, I like what you’re doing, are they giving you the money all at once? Or is it a commitment to give you money as you need it?

Jason Snider : Yeah, that’s a great question. I probably wasn’t clear. Typically, these are what we call drawdown structures, which means they make a commitment, the LP will commit. So they may commit, I’m making this up a million dollars. And they say, I’m going to commit this to you for 10 years, right? And typically, we can get into it because things are changing.

But typically a fun life may be 10 years. And the investment period is the first five years, and then the quote unquote, harvest period, the selling period is the last five years of that 10 years. And so the LP will say, I’ll commit a million bucks.

And then what you’ll do is as you make investments as the GP, you will call that capital from the LP and then invest that capital into the businesses that you’re investing in.

Anthony Codispoti : And how often do you have trouble actually getting the cash?

Jason Snider : Well, I can’t speak for every private equity firm. I can speak for Gage, and it’s not often, if ever. So because these are firm commitments, the LP is signing what’s called a subscription agreement. When they sign on and they make a commitment, they’re signing a legal document that says, here’s the terms of the partnership. And we are making a commitment of a million dollars. And we have an obligation to fund that whenever you call it.

Anthony Codispoti : So can anyone become an investor?

Jason Snider : Yeah, it’s a big question. And it’s a varied question. I’d say generally, yes. But, you know, for example, and I can only speak for the firm that I work for, Gage here, we only allow what’s called qualified purchasers into our funds, which means you have to have a certain level of net worth. Now, there are a lot of firms that are starting to, for lack of a better term, kind of democratize their investment base.

And they’re going more for the high net worth individual that does not meet that qualified purchaser level. And so these could be individuals that are clients of a private bank and, you know, they are interested in private equity and that bank may pull together a bunch of those kind of investors and invest in private equity. So there’s a lot more individuals that are coming to the table to invest in private equity.

It’s becoming a lot more common than even five years ago, which was very much so. The large, large institutions are very ultra-wealthy individuals in this country or in the world.

Anthony Codispoti : So once you invest in a company, what is the dynamic like between you and them? them.

Jason Snider : And the portfolio company. Oh, and the portfolio company. Yeah, it’s a good question. I think the ultimate answer is it depends. It depends on if the portfolio company needs a lot of assistance. If it needs a lot of assistance, then I think the dynamic is very frequent touch points. It could be more time on the ground. It could be a lot more operational calls with the CEO, just making sure that things are staying on track. If it also could depend on, you know, there are cases where the management team is in flux, right? You know, new management team members are coming in.

Some are exiting. You know, it all depends. There could be on the other end of the spectrum, those perfect situations where you have a portfolio company, you invest in it. The management team is in place from day one.

Everybody knows what they need to do. And then it becomes just a quarterly cadence with the board. And so, or somewhere in between those two ends of the spectrum.

It’s a spectrum like everything else in my shirt. And then what is the involvement, if any, from the limited partner? Are you just kind of giving them updates or do they ever get involved in sort of looking under the hood? What’s going on?

Jason Snider : You know, that is a really, really good and a really interesting question because there are some LPs, some limited partners that have specific expertise that you may call occasionally and say, hey, this is an issue we’re dealing with, with this portfolio company, et cetera, et cetera. You may pick their brain. I’d say that occasionally happens. It doesn’t happen a ton. Generally speaking, we will do what’s called an annual general meeting or an LP conference or a limited partner conference. And that’s, that typically happens once a year.

And it is, it is a, you know, it’s a production. You typically, it’s typically four to six, maybe even eight hours. And you sit down with your LPs in a big room and you go through every single company. You go through the performance of the funds. You tell them how, how much capital they’ve put in, how much have they gotten back? How is the fund performing? What’s the outlook look like for each of the portfolio companies? So it is a deep dive into kind of what’s going on with their investment. And then they get quarterly reporting as well, you know, financial statements and update on what’s going on in the portfolio companies, perhaps like even a note from the founders about just general market commentary, that kind of thing.

Anthony Codispoti : How long do private equity firms typically hold on to their equity in a company? Is there a traditional sort of turnaround cycle? Yeah.

Jason Snider : I’d say on average is probably four or five, six years. I think I’ve looked at this data before. I, it changes, right? So I think the actual average across all private equity across the world is around five, five and a half years, honestly. But you’re going to have situations where you have a three year hold, probably on the shorter end, two or three years. On the longer end, you could hold a company for, you know, years and years and years. There are some funds and we can get into it. There are some funds, private equity funds that don’t have a 10 year life, but may have a 30 year life or maybe even evergreen. And their intention is to hold on to a business as long as they can, as long as it’s cash flowing.

Anthony Codispoti : And would there be an example of that kind of affirm that folks might be familiar with?

Jason Snider : So the one that comes to mind that I’m always like kind of following, I don’t know them, but permanent equity out of Missouri, I think their fund lives are around 29 or 30 years, if I’m not mistaken. And I don’t know if they’ve ever sold a portfolio company. Their mindset is much more kind of the Warren Buffett mindset, which is make an investment and hold it as long as you can. And doing evergreen structures, again, not to get too technical or complicated, doing an evergreen structure, which is essentially no fun life, does get a little complicated because you got to figure out how to get LPs in and LPs out and all that.

Anthony Codispoti : When it comes to actually raising the funds, marketing it, for lack of a better word, how do you go about doing that? And are there any restrictions on what you’re allowed to do or say?

Jason Snider : Yeah. Yeah. Another great question. So how we go about it, there’s a couple ways. I’ll go down kind of two paths. Some firms will use what’s called placement agents, and these are firms that have very good connection points to limited partners, and they know what the market is, and they know what limited partners are looking for, and they will go market to a group of limited partners to get them into the fund for fundraising purposes. Some firms have an investor relations, or maybe not even investor relations, they do it themselves, but they’ve got their own network of LPs, whether they’re LPs in one of their funds, or LPs that have just expressed interest.

So whenever fundraising commences, if you will, they’ll reach out to that group, and hopefully they’re actually keeping in touch with that group even before they get into the marketing period, but they’ll reach out to those potential LPs and LPs and just say, hey, we’re raising a fund, here’s the terms of the fund, are you interested, how much do you want to commit, and then they’ll go about getting the commitments, the subscription agreements all signed up, etc. So that’s generally how it happens. Now, you asked about rules, and yeah, there’s a lot of rules. The Securities and Exchange Commission likes to put rules, and rightfully so.

Anthony Codispoti : Even though this isn’t a publicly traded entity that we’re talking about, they still have jurisdiction over this. Okay.

Jason Snider : Yeah, that’s right. So the SEC does have jurisdiction over private equity. I think about it as there’s a lot of regulations around public, publicly traded businesses. Timeline by which they can report information. There’s the management of material, non-public information, and how that gets disclosed out to the masses.

There’s analyst calls. There’s a lot of process around that. On the private equity side, there’s a lot less process. And so you can think about the regulation on private funds as being to making sure that the investors in private funds have the information that they need to make a good educated decision. And so there’s a lot of rules around how information is disclosed, how you calculate track record. And so that you want to make sure you always have support for your track record. Because ultimately, that’s what investors are buying as a good track record. But it’s really about making sure that what you’re telling an investor or an LP is actually what you’re doing.

So just as an example, it may be a lame example, but I think it’s fairly, I think it’d resonate with a lot of your listeners. If I tell our LPs, hey, we’ve discovered the secret of using artificial intelligence. And it helps us make better investment decisions. And we think we have an edge in the market. And then it come to find out, well, hey, we’re just using chat GPT and asking what investments we should be investing in. That’s a real problem, right? Because that’s like a lie, if you will, or misinformation out to your LP base. That it’s those kind of things that the SEC wants to prevent from happening.

Anthony Codispoti : Let’s talk about maybe some trends that you’re seeing. What do you see kind of shaping the world of private capital today?

Jason Snider : Yeah, good question. So there’s a couple of things, maybe three things that I would lay out. One is we touched on it, and that is just there’s a, the aperture is opening for more participation in private equity. So you’re seeing funds that are raising capital for, quote unquote, retail investors, not your ultra high net worth individuals or institutions, but the aperture is opening for other investors to come into private equity. So that’s changing the game a bit. It’s just a different source of capital, which we can talk about.

So that’s number one. I think number two is private equity has been known to be an illiquid asset. So whenever you sign up, you’re committing for 10 to 13 to 15 years. And like the case we talked about 30 years, the secondary is market is really coming on board. There are funds that are raising capital to buy LP’s out of private equity funds and venture capital funds. And so there’s a very robust set of capital markets for already existing LP interest. And so that’s generating another layer of liquidity, if you will, in the market.

So there’s, so there’s more liquidity there for investors. So that’s number two. And then I’d say number three, which you can’t get around anymore. And that’s just technology. Technology, I think we’re on the cusp of seeing some major shifts happen, happening for investors in how you process information using data analytics, which already existed, but also putting on top of that artificial intelligence.

Anthony Codispoti : Can you say more about that? What is, I mean, you sort of made the joke about using chat GPT when you sort of had boasted about having a much more sophisticated thing. But I could see feeding some spreadsheets or some data into chat GPT and saying, hey, what do you think of this deal? But I don’t think that’s what you’re talking about.

Jason Snider : Well, so that actually, you know, that’s a good example. I think that I wish I could sit here and I could tell you this is how AI is going to change the game. All I can tell you is like, you know, when the internet came online, like we all sat there and we’re like, wow, this is really cool. I can buy a book and it gets delivered in two days on my doorstep. That’s really cool. But we couldn’t sit there at the time and say, this is going to change the world, right?

It was just kind of a cool thing. I think the same thing is happening with AI. What you just described is, you know, what a lot of firms and including Gage, we’re doing a little bit of, and that is we’re using some of these, like, perplexity and chat GPT. And we are putting information in to try to just get another perspective around a market, around perhaps, you know, just another perspective on a deal that we may be looking at. It’s just, again, it’s just another avenue into the world that we can kind of draw from to help inform our own decision process.

But I think it’s going to be even more fundamental than that. I think over time, you’ll have, so whenever you do a deal, you have what’s called a SIM or a confidential information memorandum come in that you review on a particular investment opportunity. Artificial intelligence can already take that, summarize it, you can build in filters for, you know, what is a deal that we want to look at. It’ll run those filters against it and say, this is a yes, this is a no, or this is a maybe. And then right there, you’re already being more productive on the number of memos that you can review in a given year or a given day or a given month.

Anthony Codispoti : You can just process a lot more data, look at a lot more deals, get to an answer more quickly.

Jason Snider : And that’s kind of, you know, that’s kind of table stakes, kind of the obvious. The question is, is what’s not so obvious? Like what is still yet to be discovered using these technologies? Because it is going to change the game.

It’s already changed the game. ChadGPT came online a couple years ago, almost three years ago. And now you’ve got all kinds of LLMs out there. We’ve started experimenting with them here a couple of months ago.

We’re actively engaging with a variety of vendors to help us get better and think more holistically about how to consolidate our data and better use technology to help us process that data faster, better, you know, more efficiently. So, and it’s not a person reduction game. It’s a, how do you repurpose people to make them even more value-add?

Anthony Codispoti : Do the stuff that the large language models can’t do. Jason, you talked about opening the aperture, basically, you know, giving access to more people who now have the opportunity to invest. Is this good? Is this bad? Is there a risk to this? What do you think?

Jason Snider : Yeah, anytime you ask me a good bad question, you’re not going to get a good bad answer because I don’t operate very well on binary. But I’ll give you the Jason Snyder perspective. I don’t know if it’s good or bad. I think it’s great for investors that have never had access to private equity. I think private equity is a great asset to own.

And I think that there’s more individuals that have not had access that should have access. So that’s number one, I’d say. So I think it’s great. I think as a private equity firm, I think it can be really good because it gives you another source of capital. But on the flip side of that, you’ve got a lot more investors. And some of those investors, you know, you’re talking about, if they’re investing in your firm, you don’t know how much of their overall net worth is at stake. Right. And so I think the stakes go up even more because if you’ve got a family that has a net worth of a million dollars and they put a tenth of that into private equity, and all of a sudden, you know, they’re underwater, somebody loses their job and they need that money back, they can’t get it back.

It’s illiquid, most likely, depending on the structure. I think we just got to be mindful of those things and make sure that those retail investors are fully educated as to what they’re getting into. And then on the other side, not to get into all the detail, but, you know, there’s a lot of work involved, you know, private equity. It’s, you know, it’s, you’ve got a lot of, the back office processing and all that gets very complicated. The more investors and the more unique investors you add, it just makes it a little bit more complicated.

Anthony Codispoti : Especially if they don’t have a lot of experience being investors, there can be a lot more hand-holding, a lot more questioning answering involved.

Jason Snider : That’s a great point. Yes, absolutely. So we’ve not gone that direction yet, so I don’t have a lot of direct experience with it, but you never know, right? There’s a lot of firms that are starting to kind of, you know, to use the word open the aperture, are starting to open the aperture for those kind of investors.

Anthony Codispoti : From where you said, Jason, are there particular industries or business models that are more appealing to you than they were, say, five years ago?

Jason Snider : Yeah. I mean, I think technology, it’s hard to say more appealing, but I think it’s more interesting and you’ve got to be more discerning. Technology comes to mind. The other area that comes to mind is residential services.

Residential services are very interesting. I think generally speaking, over time, families are growing their wealth. They want to spend more time amongst the family, which means they’re outsourcing more and more of their lives, whether that’s lawn mowing, whether that’s repair of the home, whatever it may be. So I think that’s a really interesting, you know, side of what’s going on and the direction we’re going, residential services. I still come back to, I like, I don’t know if this is the right term, but kind of these boring businesses.

I’m talking about me. I’m not talking about Yage, although we do invest in some of these, but I like these boring businesses, the businesses that just won’t go away. They’re services business. You know you always need office cleaning.

You know that you’ll always need doctors and veterinarians and you’ll always need to put proteins into your body. I mean, these are businesses that aren’t like super, you don’t find them in the media every day.

Anthony Codispoti : They’re not sexy, but everybody needs them. Everybody uses them.

Jason Snider : That’s right. And I think there’s a lot to be said about those businesses because they’re not going away. In fact, they’re probably growing even more because the society gets wealthier and wealthier and we need more and more of those kind of businesses.

Anthony Codispoti : So how would you describe Gage’s, Gage Capital’s place in this entire landscape? Yeah.

Jason Snider : So I’d say we’re generally US focused. So not to say that we don’t invest in some foreign countries we have and we will continue to do so, but generally speaking, we look at US businesses. Generally speaking, we are in what we call the lower middle market, which is we’re looking at smaller businesses. Now, some of your audience may say, wow, that’s not small, but you know, we’re talking about 150, $200 million enterprise value businesses.

So they may have 5 million of EBITDA to 15 or 20 million of EBITDA. Those are the kind of businesses that we’re generally looking at. We do look at businesses kind of across the economy. So you talk about healthcare businesses.

You talk about government or industrial or transportation businesses. We talked about business services. We’ll look at business services businesses or technology businesses. We look at food businesses and consumer products. So I mean, we cover a pretty broad swath of the economy. So that’s really kind of our focus.

Anthony Codispoti : What are you looking for in a founder?

Jason Snider : Yeah, that’s an excellent question. And ultimately it comes back to what I said earlier. I’d say partnership. We want a founder who we believe is also going to be a good partner. Now, what is a good partner? Again, I think about it as a marriage.

You’ve got a marriage of two individuals or gauge and another individual or group of individuals. They just have to work together. They have to be transparent with one another.

They have to be open. They have to have integrity. They got to be aligned on what the goals of the enterprise are. Typically these founders at the end of the day are going to be minority holders and not majority holders anymore. So they’ve got to understand that as well and face that fact.

Anthony Codispoti : That’s a mind shift to take place. Hey, I’ve been the boss for so many years and I’m still going to be here in some cases.

Jason Snider : 100%. And so I think that’s important. And being able to be, I use the word again, humble enough to realize that, but also be productive and saying, hey, you may want to think about this. And I can’t not just underscore more and more the transparency point. Transparency and just good partnership is critical.

Anthony Codispoti : That’s probably a good lead-in for the next question I had in mind is, is somebody is maybe thinking about taking on investment capital. What should they be thinking about? I mean, you sort of touched on a big one there like, hey, you were the boss, man or woman forever for a long time. If there’s assuming that they’re sticking around, you’re still going to be there and be in a leadership role. But push comes to shove, you’ve got a minority stake here. And so aside from that, what else should they be thinking about?

Jason Snider : Yeah, I think a lot of founders probably just need to think about, what do they want to get out of this? What do they expect life to be like after the event happens and have a good idea? Like are they coming into the table to say, I’m just looking to get some capital from my family? Or are they coming to the table to say, I want to get some capital from my family, but I still want to be involved and I still want to be CEO.

I think having a good sense as to what they’re looking for at the end of the day is critical. I come back to transparent. There have been situations across all private equity firms where the founder comes to the table and they’re like, I hope they don’t uncover this one piece because if they do, then maybe the deal is dead or it’s a really bad outcome, etc., etc. Transparency is so key because guess what? Indiligence, those things are going to be found out. You want them found out then, you don’t want them found out after the fact. So I think integrity and transparency coming to the table with that mindset is super, super critical. Yeah.

Anthony Codispoti : I mean, it says something very different about the whole relationship if it’s, you’re upfront about, hey, here’s a blemish over here. You guys are going to see, I just want to be upfront about it. Here’s what happened and here’s what we’re doing to fix it versus, wait a minute, why didn’t we just found this thing? Why didn’t this ever come up? It’s a totally different dynamic that takes place there. Yeah.

Jason Snider : It’s kind of like, again, I bring it all back to a marriage. It’s like getting married and then you’re on your honeymoon and your spouse says, oh, wait, by the way, I’ve got a $200,000 credit card bill. Do you think we could take care of that tomorrow? So that’s not from personal experience, by the way.

Anthony Codispoti : That was very specific. I’m glad to hear that, Jason.

Jason Snider : That goes back to Heartbreak Kid, one of my favorite movies. Okay.

Anthony Codispoti : So Jason, what separates founders who thrive after taking capital versus those who find themselves in a spot where they’re struggling? Yeah.

Jason Snider : Again, I think it’s the same.

Anthony Codispoti : Is it sort of that ability to take sort of a backseat in a manner?

Jason Snider : Yeah. Sorry to speak over you, but yeah, I would say, number one is if they still think, okay, I own 20% of the business, but I get to make all the decisions. Now, obviously, if the decision is, hey, they’re the CEO, 100%, they should be making the decisions, but they should always be in alignment with their partner. Again, it’s a partnership. But I think that’s important is just being aligned with what’s your role now.

Is it still CEO or is it no longer CEO and you’re a board member? And so you have input, but you don’t have decision-making authority. I think just coming to terms with whatever that role is is really important. And then also, before anything gets signed, just being transparent, because at the end of the day, you’re going to be in the same boat with this partner and that boat can be really fun to ride in. If everybody kind of puts all their cards on the table, or it could be a miserable experience if things come to light afterwards. That’s when trust gets thrown out the door. And so I can’t underscore those two points enough.

Anthony Codispoti : Maybe let’s look at it from sort of a different end. If somebody’s thinking about breaking into PE, VC, what would you say to them? Words of advice there.

Jason Snider : Meaning like as a career, etc. Exactly. Yeah, I think it depends on where you are in your career, because I think you can approach it from different directions. If you’re in college, if you’re in high school, college, etc., I think there’s a real opportunity. More and more private equity firms are going straight to undergrad programs to bring in analysts. So talk to your career counselor, look for private equity firms that are doing that.

And that’s a great entry point. If you’re an MBA student and you’ve got some experience working in a company, working in a management consulting firm, working in an investment bank, and now you’re getting your MBA, that’s a great time to be seeking out private equity and look for job opportunities, again, through the career center path. If you’re in a company already, so you’re fairly senior, again, I’m making up titles, but if you’re a CTO or you’re a CFO of a business, etc., there is an opportunity to work with private equity firms to be operating talent that can be deployed into these portfolio companies, people with a lot of experience that have worked with a lot of companies. And so a lot of that is like talking to recruiters, seeing what’s out there, because I think private equity firms generally are looking for just really good operating talent to upscale and improve their businesses. So I think that those are three great paths into private equity.

Anthony Codispoti : Jason, any lessons that you’ve learned the hard way in your career that maybe others could hear from and avoid themselves?

Jason Snider : Yeah, I think a lot of it, I said this at the beginning, don’t, you want to always want to take your career seriously, you want to always want to do good jobs, I don’t want to discount that, but there’s a lot that’s out of your control in business and in life, and it’s super important to focus on the things that you can control. And I would also say just always be prepared. So that’s what I, it probably comes across too preachy, but that’s kind of what I’ve learned is you always want to be studied up, you always want to be prepared for what may happen so that she can be ready for it. And that goes back to some of my Arthur Anderson days and a lot of lessons learned from there. And also a lot of the thing is, is like just be, be looking out for good opportunity. I would not be where I am if I were not very focused on just the good opportunities. Opportunities come our way all the time. I’m sure there’s a lot of people out there that, you know, they’re always scouring, you know, the job boards or they’re getting calls from recruiters, etc. Just be very discerning about what you want and look for what’s in the realm of what you want. Because, you know, I think life is too short to just jump from one place to another. You want to be very discerning and focused on what’s next for you and your family.

Anthony Codispoti : Jason, what’s one thing you wish more people knew about your industry?

Jason Snider : Again, I feel like I’m repeating myself. I think a lot of it is just how ubiquitous it is. It touches so many aspects of our lives. The investors in private equity are not just these mega wealthy individuals out there with yachts and all that stuff. But we’re talking about teachers and firefighters that have a lot, a large part of their own net worth tied up in these private companies and businesses. By way of their pensions?

By way of their pensions. I think that’s really important that I don’t think everybody understands. And then the last thing I’d say is, I think private equity venture capital, people forget that this is an important segment of our capital markets. You know, this is how founders of our businesses, kind of the backbone of the American economy, get liquidity for themselves, for their families, but also get capital for the growth of their business over time. These are their babies that they’re bringing into the world and growing up. And private equity and venture capital serves a really important kind of entry point into that.

Anthony Codispoti : So that’s what I’m saying. Jason, I just got one more question for you. But before I ask it, I want to do two things here. I’m going to invite everyone listening today to hit the follow button on their favorite podcast app. I’ve had a really great interview today with Jason Snyder from Gage Capital. And I want you to continue to get more wonderful content like this. Jason, I also want to let people know the best way either to get in touch with you, get in touch with Gage, follow your story or that of the companies. What would that be?

Jason Snider : Yeah, probably the two best ways. If you get our webpage, you know, Gage, GageCapital.com, you can click on info. You can reach out to me there. Not for market, if you just want to talk about, you know, the industry, et cetera. That’s obviously not for marketing purposes.

We don’t market through our website. That’s one way. The other way is I’m on LinkedIn. I don’t do a whole lot of social media, but I am on LinkedIn. So you can find me on LinkedIn. I’m always happy to have a conversation with people.

Anthony Codispoti : That’s really generous of you. So last question for you. You and I, we stay in touch. A year from now, we’re sitting down having dinner together and you’re celebrating something. One year from now. What is that thing?

Jason Snider : Wow. So number one will be my 12th wedding anniversary to my wife. So that that’ll be important. Good answer. Yeah.

Anthony Codispoti : Although I’m not going to your anniversary dinner with you to just to be fair.

Jason Snider : But I’ll tell you about how great everything is. How about that? The other thing, I think the other thing is we’ve set out some very specific goals for Gage this year. I won’t go into what those are, but a year from now, I’d like to sit down and say, Hey, this is what we decided at the beginning of the year. And this is how we’ve met or exceeded those goals for Gage over the course of 2025. And here’s what they are for 2026.

Anthony Codispoti : Jason Snyder from Gage Capital. I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it. A lot of great knowledge here today.

Jason Snider : Yeah, thank you. Yeah, great to be here. Good to talk to you.

Anthony Codispoti : Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.