The story of Cue Ball is one rooted in a deep belief in the power of human capital reinforced by the team's history of entrepreneurship and business building. By working closely hands-on with inspiring entrepreneurs, we feel that we are poised for an exciting future and invite you to learn more about our history, current activities, and aspirations.
PHILOSOPHY: Human Capital and People-Centric
Ideas, plans – even a thriving business – are all useless without the right people in place. Our deep appreciation for capital of the human kind manifests itself in our team, our investors, and in the companies with which we partner. Our General Partners are self-made business-builders with a long-standing history of collaborating in entrepreneurial ventures as well as some of the most successful global businesses. We have the strategic and operational understanding, as well as the deepest relationship networks, to get an enterprise to the next level. Our unique investor base represents much more than just a source of financial capital -- we carefully invited and recruited each one to constitute the Cue Ball Collective, a brain trust of venerable business leaders who are active in our deal sourcing and in supporting portfolio companies.
Active and Collective Involvement
We pursue opportunities where our direct involvement can influence the outcome. By leveraging our judgment, experience and relationships, we help strong teams become even stronger with insights into their businesses that serve as a sounding board for top strategic priorities. Learn more about How We Add Value to Portfolio Companies.
Simple and Common-sense Approach
When we consider a new investment, we first look at the people involved and then dive deep into the business model. We look for people with a passion for their purpose and an excellence in execution. Specifically, we favor businesses with recurring revenue and fixed cost leverage, a model that encompasses many SaaS applications, B2B services, and consumer franchising and lifestyle concepts. This model is one we have spent years working with and find that it leads to superior cash flow. We match this focus with a mantra of “the right amount of money at the right inflection points.” Learn more about Our Specific Criteria and Our Golden Rules.
Alignment and Transparency
With our deep respect for human capital as the driving force behind all great ventures, we strive for complete transparency and alignment with both our investor base and the entrepreneurs with whom we partner. Our GP/LP alignment is grounded in the following: significant General Partner commitments to the fund, an evergreen structure that allows for only one investor set and one common portfolio at any given time, and budget-based fees. Our budget-based management fee is based on cost reimbursement for working capital needs because we believe that partners should make money on money made, not money raised.
We seek open, honest, and frequent communication with our entrepreneurs because it is simply the most effective way to establish the type of trusted working relationship that is most productive for successful business-building.
Cue Ball was created when a small group of us came together over a uniquely powerful set of bonds. As a team, we had shared the joys, scars, successes and lessons of building businesses together for nearly two decades – from pioneering Internet start-ups to leading Fortune firms around the globe at companies such as ZEFER, AnswerThink, Parthenon, McDonald’s, and Thomson Reuters. We decided to take our shared experiences and dedicate ourselves to backing pioneering entrepreneurs and businesses with real potential for long-term value. What emerged was a model for venture capital that at once both represents a new vision and also harkens back to traditional venture values.
Cue Ball had its earliest beginnings in Boston in 2005 when we used our own capital to build an initial portfolio and test our investment thesis. This thesis centered on a belief that a new model for VC would soon emerge – one more distinctly focused around the entrepreneur and human capital. This small fund model focused on the value of operating knowledge and hard work, and was more transparent and aligned with investors. The principles we set out to embrace included a “human capital first” philosophy, the power of collective wisdom, the view of the entrepreneur as the customer, and the belief that pioneering ideas are not mutually exclusive with rational business-building.
In 2008, we formalized and founded our fund with the launch of Cue Ball Capital. We are both humbled and excited by the entrepreneurs who have chosen us, and by the value-add investor base we have attracted as members of Cue Ball Collective. We see the Collective as an extension of our team, providing new investment project ideas, advisory and board roles, and industry relationships to our companies.
Today, people often ask us how we picked our name. The answer is certainly not our skill level in billiards. Learn why we chose cue ball as the moniker for our firm.
Ultimately, Cue Ball wants to be known as a pioneer of a new model for venture capital. But this new VC model is in its nature a modern classic -- a re-invention of the old-school venture firm with a contemporary twist. When we founded Cue Ball Capital in 2008, venture capital was at an inflection point, and it continues to be at one today: too many dollars chasing too few deals; ever larger funds mismatched against the opportunity set of more capital efficient businesses; fewer opportunities for IP; and issues of misalignment between General Partners and Limited Partner investors. We founded Cue Ball to become part of a group of next-generation venture firms that offer a better model in light of these structural deficiencies.
We believe in a smaller fund model where General Partners are not just investment partners, but highly-committed, active, and relevant business-building partners and mentors. Greater involvement requires a portfolio with more concentrated positions in fewer companies, Our focus is and will remain squarely on the areas where we, and the entrepreneurs we back, think we can add the most value. We believe this self-selection increases our ability to be the best at what we do.
As we grow over the years, we will look to add to our team’s privileged depth of experience in media, information, and specialty consumer industries. Every day we learn from our portfolio entrepreneurs, and hopefully, they learn from us. Like many things in life, pairing older wisdom with newer innovation usually leads to a more promising outcome than either extreme on its own.
In keeping with our commitment to an active business-building partnership, the hard work for Cue Ball always begins after the check is written. Our work ethic, fair treatment, sound judgment, and transparency are hallmarks with which we hope to be associated in the context of our overriding, human capital centric philosophy. It flatters us that some of these values have recently become in vogue. They validate our purpose and will help create a better environment for tomorrow’s venture capitalists and the entrepreneurs they back.