Episode summary
Why We Stay Small While Others Chase Bigger Funds
How I Invest With David Weisburd
· · 8 min · Hosts: David Weisburd, Curtis Pierce
Summary
The guest argues that running an investment firm becomes far more time-consuming than people expect, because the operational load of managing teams, fundraising, and multiple funds can outweigh the investing itself. He describes his role as evolving from a player to a player-coach, then closer to a manager as the firm grew, while still trying to preserve the culture and performance that made the business successful.
Fundraising, he says, is especially difficult in the middle and lower middle market. Corbell relied early on high-net-worth individuals, family offices, and small foundations, but that investor base is not as durable or institutionally committed as larger LPs. Because the firm did not build around placement agents and institutional roadshows from the start, each new fund has required a fresh reintroduction to the market.
Rather than grow vertically into one larger platform, the firm has expanded horizontally across strategies in the same lower market segment, including SBIC debt, special opportunities, equity, and private credit. The guest says this approach lets the team reuse relationships and expertise while keeping each fund aligned to a different stage in its life cycle. A deeply integrated team, he argues, helps avoid siloed incentives and keeps everyone focused on the success of the overall firm.
Key takeaways
- The guest says fundraising is hardest for firms in the middle market and lower middle market, not for the very largest private equity firms.
- Corbell has grown horizontally across strategies in the same lower market rather than simply raising bigger successive funds.
- The guest says their original investor base of high-net-worth individuals, family offices, and foundations eventually becomes less dependable than institutions.
- All investment professionals work across all funds, which the guest says aligns incentives around the overall franchise instead of individual strategies.
- The guest says the firm’s senior team has stayed together for years, with low turnover and a shared investment DNA.
Notable quotes
“there definitely is more work involved in running the firm than I think that regular way private equity professionals or regular investment bankers give credit to management for”
“we've made some, I think, really smart strategic decisions about how to grow the firm without sacrificing performance and sacrificing the experience that our employees were getting as investors”
“for anyone in the middle market or the lower middle market, capital raising is a challenge”
“we like to say we've grown the firm horizontally rather than vertically”
“all of the investment professionals work across all of the different funds and all of the different strategies”
How the episode opens
I'm not sure I appreciated how timeconuming that would be, but it's been really rewarding. But there definitely is more work involved in running the firm than I think that regular way private equity professionals or regular investment bankers give credit to management for.
Use an analogy. You went from being a player to a coach or a manager of a team. What are some of the skills that you had to gain in order to become a great manager o over the last 11 12 years?
Well, I think it's a little bit more of a a a player to a player coach than a full-on manager. Now, it's probably more of a manager, but for the first several years when our team was smaller and and we had fewer um deals that we were working on and and less capital, I was really doing both. Finance businesses are notoriously challenging to grow and manage.
So, um, we've made some, I think, really smart strategic decisions about how to grow the firm without sacrificing performance and sacrificing the experience that our employees were getting as investors.
As you've grown, Corbell, you've kind of become a victim of your own success from a capital raising standpoint. talk to me about the journey of building your capital base from 2014 to today.
Um, so fundraising is a challenge for except for the very very large established private equity firms. Um, for anyone in the middle market or the lower middle market, capital raising is a challenge. We, as you mentioned, we were somewhat victims of our own success early on and were able to leverage some of the relationships with high- netw worth individuals and small foundations and family offices that we'd had throughout our career.
And they served as the investor base for our funds early on.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- scaling investment firms
- fundraising constraints
- multi-strategy complexity
- lower middle market capital raising
- operational load and team alignment
Watch the episode
Watch “Why We Stay Small While Others Chase Bigger Funds” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
