For the Record with Joe Kaiser, Director, Mercato Partners

October 25  

Joe Kaiser is a Director at Mercato Partners, leading the firm’s investment efforts in the Midwest as well as its Performance Team.  Joe represents Mercato Partners on the boards of Ephesoft, Kalderos, Steelhouse, Summersalt and Venafi. Joe previously participated on the boards of Central Logic and Cradlepoint until the acquisition of each company.

Prior to joining Mercato Partners, Joe served as an executive at Vivint Solar, where his work helped drive a $1.6 billion IPO in 2014. Previously, Joe served at The Blackstone Group, and supported the acquisition of Vivint Solar and its sister company, Vivint, Inc. Over the course of Joe’s career, he has either invested in or advised on nearly $25 billion in private and public equity and debt issuances and acquisitions.      

Joe received a BSBA in accounting from Saint Louis University and a Master of Business Administration from the Kellogg School of Management at Northwestern University. Joe spends his free time learning to code from his children.

Give us Mercato Partners’ elevator pitch.

Mercato Partners is a private equity firm, investing across multiple alternative asset classes, providing both capital and guidance to founders and companies in a range of stages and a variety of industries ranging from technology to food and beverage to branded consumer. Through a carefully crafted combination of team-wide scaling expertise with a dedicated focus on overlooked and underserved markets, we are uniquely capable of accelerating company growth and delivering industry-leading returns.

As a leader, how has your role changed during COVID-19?

As a venture investor, my overarching goal is to try to isolate outcomes from the tactics of getting there. I don’t think COVID-19 significantly changed any outcome but it has certainly altered my day-to-day routine and amplified the impact I could make with the leadership of my portfolio companies. 

First, as any founder can attest, leading a company is a lonely, emotionally taxing position. Before the pandemic, I spent a lot of time with founders in person, not only talking about strategy and performance of their respective companies but also sharing hugs and high-fives. COVID-19 has ratcheted up stress on founders and has increased the isolation. So, as a first step, I’ve spent even more time with my founding teams, albeit virtually, talking about their businesses, of course, but also about the emotional and physical well-being of their families, teams, and themselves. 

Next, as an investor, my role is to help portfolio company leaders anticipate what’s around the corner and plan for the potential eventualities. Given that COVID-19 is something none of us had ever seen before, my portfolio company leadership teams and I spent a lot time planning for various scenarios. Foremost is ensuring that each company had sufficient liquidity, not just for 2020 but well beyond across each of the potential outcomes.  Normally, we systematically weight scenarios by probability, but again, in COVID-19, that has been nearly impossible. So, in March and April, we started by taking the planning process day by day and now have evolved to month by month. It’s been intense, but it has positioned each of our portfolio companies for long-term success as each controls their respective destinies.

How have you pivoted your company to address the needs that have risen since the onset of COVID-19?

Again, I have intentionally spent much more time with people – whether founders already in our portfolio, leaders of potential portfolio companies, or our investors – in such an unprecedented time, authentic communicating is imperative.   

In a separate vein, COVID-19 has created voids and dislocations in several industries, like healthcare, where we actively invest. By ensuring that portfolio companies are well capitalized to meet the growing and shifting needs of their respective customers, in a small way, we are helping to mitigate some of the impact of this health crisis.    

What are the big milestones to come in the next few years for Mercato Partners?

For us, it’s twofold. First, we will continue to collaborate with founders of our portfolio companies to help them realize the goals they set out to accomplish when they founded their companies. Virtually every founder, particularly those in healthcare, set out to impact the lives and work of people around them. By helping these founders build great companies, we positively impact our communities by delivering life changing technologies, creating great jobs, and generating lasting wealth shared among a broad base of people. 

A great example is Central Logic. From 2017 until earlier this year, I had the incredible opportunity to partner with Angie Franks and the team at the Minneapolis-based company. We built a mission critical software platform used in Arizona to give providers statewide visibility of bed and critical asset capacity during COVID. With very mixed emotions, we sold Central Logic in May, and that sale created a worthwhile financial outcome for the employees who worked so hard to build that company. It also provided Central Logic with additional financial fuel to continue with its growth trajectory.

Finally, we are raising additional funds so that we can continue investing in game-changing companies, including Midwest-based companies like Central Logic. We are very excited about the entrepreneurial healthcare ecosystem of Medical Alley and the future of healthcare that it will craft. 

Consequently, continuing to fund those innovators through future growth funds is a major milestone for Mercato.

What does leadership look like to you?

I’ve had such great examples throughout my career, both as an operator and investor, to draw examples. This is also such a gating issue for me as an investor. For me, a great leader is genuinely selfless and always authentic. These traits do not guarantee success, but their absence makes winning long-term significantly less likely.

What is the best advice you have received in your career? What is the worst?

I’ve received three great pieces of advice that shape my thinking. First, “the troops always eat first”. Second, “always remain hungry and humble or you’ll become hungry and humble”. Finally, “you can catch a sunny with a kernel of corn”. All three remind me to keep things simple, put other people first, and work hard. Magic will happen with those three ingredients!

The worst advice is as corrosive as it is clichéd: “You can’t” and “You shouldn’t”. Again, there is no guarantee for success, but a well-researched plan coupled with motivation and discipline is pretty tough to beat. I think it’s a universal truth among my portfolio company founders, despite their insights and prior experiences, they heard “you can’t” one too many times, and that lit a fire for them. For me, whether it was leaving the largest private equity firm in the world to join a start-up that became a multi-billion dollar solar company or helping to build an investment firm outside of Silicon Valley, I have heard, “you shouldn’t” a few times as well.

What have been the most rewarding moments in your career?

Billion-dollar IPOs and exits are certainly exciting moments, but for me, I think it’s the journey from light-bulb moment to successful execution that is so rewarding. I’ve been both fortunate to have had a few of those moments in my career. Seeing something I envisioned come to life and become widely adopted is an incredibly validating moment.

What is one personal goal for the upcoming year?

For me, collaborating with founders to build hyper-growth successes in the Midwest is very personal. My goal for the upcoming year is to team up with a few founders to build the Next Great Companies in the Midwest – because we can!

How do you relax / decompress?

I do two things everyday – exercise and meditate. Both enable me to release a lot of stress and focus on priorities.  

What do you enjoy most about the Medical Alley community?

No surprise, I have two: the people and the mission. Medical Alley’s mission of developing and deploying world-class healthcare technology and services really energizes me. And working with those innovators that are driven to help others with revolutionary, life-improving technology while building Medical Alley into the undisputed epicenter of healthcare innovation is exhilarating and humbling.

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