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Greg Jones ’92 didn’t always view himself as a private equity guy.
“I used to hate guys like me,” he says. “From my perspective as an operating guy, the private equity guys would basically put a bunch of money in your company and then jump on your back and hope things went well. That’s not a successful partnership or formula.”
Still, Jones recognized early on that he had a knack for identifying potential growth companies and thought his prosperous background in business development and operations at three successful companies might lend itself especially well when advising other executives.
“I wanted to set up a partner firm that truly partnered with its portfolio companies,” Jones says. “In other words, a firm that would not only invest, but also work with the people to grow their companies rather than just putting money in and sitting on the board.”
The firm he envisioned is Edgewater Funds, where he is a founding partner and chief operating officer. Since its inception in 2001, Edgewater has made a point to go beyond merely investing in portfolio companies. Along with making customer introductions, the team provides practical services such as helping to streamline recruitment and standardizing the payroll and other operational processes.
“We believe we work for the management team, not the other way around,” says Jones. “That's a huge difference in philosophy. There are very few firms where the actual guys that have operating experience make the investment decisions. And that's a really unique thing about Edgewater.”
This unorthodox approach has paid off—significantly. Edgewater’s first fund was $236 million in committed capital. Today, the firm has over $2.7 billion of capital commitments raised since 2001. Jones, however, says it was when companies started calling them rather than the other way around that he knew they were on the right track. “We must be doing something right,” he says.
Jones says that the shift in how he views his experience and where that fits into the finance world really began when he got his MBA. “Kellogg helped me understand different areas of business. Previously, I had more of a marketing bend, but at Kellogg I was able to learn a variety of financial disciplines,” he says, adding that the school’s reputation has also been a major asset in the private equity field. “If you have an MBA from Kellogg you have a tremendous business education.”
While Jones’ opinion on private equity has certainly changed and he’s now proud of how firms like Edgewater can help emerging companies grow, he still sees room for fresh perspectives to enter the field. He just hopes that new investors will consider Edgewater’s philosophy and formula for success.
“When you're running a business you have to remember that your interest has to come last,” he says. “In other words, you have to put the organization first. And you can't ever forget that when you hold that much authority and responsibility. Businesses are fragile and things change rapidly—good companies can have real problems very quickly. You have to be careful and be ready. And you have to put the organization first.”