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Twenty go-kart tracks became one company
Taubman Capital
The vehicle was Taubman Capital, the family investment business Alexander Taubman helped build with his family's own money while he worked at Oaktree. Over about a decade it did close to fifty investments in founder-owned companies, and the go-kart platform was one of them.
Zach, a friend from his days as an analyst at Goldman who had gone on to do well in technology, invested in the go-kart deal. Working on it showed them how many great businesses sit in places almost nobody spends time thinking about.
The idea behind Long Lake
That raised a question: what if the technology expertise of companies like Ramp and Cognition, and the AI labs, could go to Main Street American businesses? The idea for Long Lake was there from the very beginning, and about nine months passed between the first conversation and incorporation. When Taubman described it to engineers, the excitement was palpable.
The name
The name comes from Long Lake Road in Michigan, where his family's real estate business had lived for forty or fifty years.
How does buying many small firms create value?
The strategy is called a roll-up or buy-and-build. An acquirer buys many small companies in a fragmented industry and runs them as one group. The group can spread costs such as insurance, software, purchasing, and back-office work across more locations, and larger firms often get better terms from suppliers and lenders. Private equity firms have used the approach in fields such as veterinary clinics, dental practices, and HVAC services.
Why do family offices buy private companies?
A family office manages the wealth of a single wealthy family, often across generations. Because it has no outside investors who can withdraw their money, it can hold a private company for a long time. Many family offices invest directly in founder-owned businesses rather than only buying funds. The Rockefeller family set up its family office in 1882.
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