A Conversation with TechnicallyPhilly’s Sean Blanda
Posted by | July 9, 2010
Last week, I had the pleasure of being interviewed by TechnicallyPhilly’s Sean Blanda for the publication’s, “Friday Q&A” segment. Sean and I talked about a number of things, including Safeguard Scientifics’ disciplined strategy, our philosophy for partnering with growth-stage technology and life sciences businesses, and our outlook for the Greater Philadelphia area.
I encourage everyone to read the entire article online, but I would like to focus on one particular area that came up during my interview with Sean: How is Safeguard different from a typical private equity or venture capital firm?
Here’s how we’re different.
We don’t operate quite as early as the venture capital community, or quite as late as the private equity community. We’re somewhat of an in-betweener. We’re not forced to do premature exits to return capital to limited partners so we can raise a new fund every three years. There is patience built into our model.
When we have an exit, any gain we have is sheltered from taxes by our net operating losses, and the money’s evergreened on our balance sheet. We’re self-funded. From an investor’s vantage point, there are plenty of differences as well. This is a New York Stock Exchange company with all of the governance and transparency associated with an NYSE listing.
You can get in or out of your investment at any time. There’s plenty of liquidity. You don’t have to wait for several years for a distribution. You can put in as little or as much capital as you want, a privilege generally not available to a limited partner in a venture fund.
Our focus is to grow our partner companies and to create value through our proven operating platform. This strategy helps our partner companies reach revenue and scale goals that few entrepreneurs can achieve on their own.
While we certainly hope to reach our growth objectives quickly, we do not allow investor pressure to force us to exit before we achieve our goal. Our strategy is time-tested, and we believe it will continue to build value in the future.
I appreciated the opportunity to speak with Sean about Safeguard. We believe that Greater Philadelphia is home to some of the greatest entrepreneurs — in both technology and life sciences — and will continue to build upon its growing reputation as a center for innovation.
