Channel Equity Partners
About Us
Based in San Diego, CA, CEP is a Smaller Growth Equity firm that invests in B2B, Lower-Market SaaS businesses.
Core Investment Criteria
Business Type
B2B software & software-enabled services
Location
United States & Canada
ARR
$3M - 15M
Growth Rate
30%+
Retention
~85%+ Gross; ~100%+ Net
Deal Size
$3M - 15M
Minority Growth
Growth capital for scaling go-to-market
Secondary Liquidity
Liquidity to early investors / founders / employees of compelling businesses
Extensions
Additional capital at existing terms to efficiently strengthen balance sheet
Bridge Rounds
Small financings to bridge to larger raise or liquidity event
Syndicates
Fill out larger rounds referred to / by close relationships in our network
Flexible Deal Profiles
Where Does "Smaller Growth Equity" Fit in the Private Capital Landscape?
Traditional/Larger Growth Equity Struggles in Lower-Market SaaS
-
Large funds ($300M - $1B+) require $20M+ investments to deploy across 15 - 20 portcos.
-
Large check sizes create significant dilution or inflated investor expectations.
-
Many sub-$15M ARR businesses do not have the management and infrastructure to take on traditional growth equity's minimum check size.
VC's "Portfolio Theory" is Fundamentally Misaligned with Lower-Market SaaS
-
Focused on hypergrowth, huge TAM opportunities.
-
High loss ratio tolerance from VCs puts founder / employee equity at risk.
-
Handful of companies generate vast majority of VC returns - while others are neglected.
Private Capital Landscape Detail -- VC vs SGE vs LGE
Lower-Market SaaS Businesses Have Multiple Exit Paths
Lower-Market SaaS Businesses with Stable Recurring Revenue Have Many Exit Paths
Our History of "Channeling" Investments to Strategics and Larger Capital Providers
