He Pitched the Opposite of Private Equity and Was Laughed Out in 20 Minutes

Brent Beshore arrived at Notre Dame convinced he would leave with millions. Beshore, then an investor from Columbia, Missouri, buying small businesses, had flown in for the day and expected the university to fund his new firm.

He had almost no idea how that world worked. Two days before the visit he had emailed Paul, his contact on the investment staff, to ask if he could wear blue jeans. Paul told him absolutely not: "You need to put on real big boy clothes," Beshore recalled. Beshore had never pitched an institutional investor before and did not know that an hour was the norm, so he had booked the entire day.

In a small glass meeting room, he asked for a whiteboard. One was wheeled in, and Beshore spent about an hour filling it with his playbook for finding companies, running them, and telling the story, and another three hours talking through it. He laid out a different kind of investment firm built on permanent capital, meaning money with no deadline to sell, so it could hold small companies for decades.

That rejected the traditional model, in which a firm buys a company, often with borrowed money, and sells it within a few years. Beshore was proposing to skip that buy and sell cycle.

The meeting with the decision makers lasted about 20 minutes, and Beshore said they found the idea laughable. His favorite line from all his fundraising came from that room, Beshore recalled, when one investor asked: "you're telling me the opposite of private equity is going to give me a better return than private equity?" His answer was yes, sir. In other words, his firm would hold companies for the long term instead of buying them, loading them with debt, and selling them in a few years.

Paul liked him, but Paul handled publicly traded stocks and could not approve the money. Beshore left without the money he thought he was there to get.

That turned out to be the break. Beshore said if Notre Dame had offered him 20 or 30 million dollars for a permanent capital vehicle: "I would have taken it in a heartbeat and signed my life away." He would have been beholden to one big institution while he was still learning, needed far more capital than he could get, and never built what he built.

Instead, Patrick O'Shaughnessy, another Notre Dame man and an outside investor, backed him. A decade later, Beshore said the whiteboard from that long day in South Bend mapped out almost exactly what his firm became, from how it would find companies to how it would tell its story.