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
Primary growth capital for scaling go-to-market
Secondary Liquidity
Liquidity to early investors / founders / employees of companies with compelling prospects
Extensions
Additional capital at previous round's terms to efficiently strengthen balance sheet
Bridge Rounds
Small financings to bridge to larger raise or liquidity event
Syndicates
Fill our larger rounds presented to us 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
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Large fund sizes ($300M - $1B+) requires $20M+ investments to deploy across 15 - 20 portfolio companies.
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Large check sizes either create significant founder 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 only 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.
Where Does "Smaller Growth Equity" Fit in the Private Capital Landscape?
Traditional/Larger Growth Equity Struggles in Lower-Market SaaS
-
Large fund sizes ($300M - $1B+) requires $20M+ investments to deploy across 15 - 20 portcos.
-
Large check sizes either create significant founder 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 only 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
