The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: What it Takes to be Top 1% in Private Equity | Why the Best Companies are Talent Systems | Three Traits Required to Succeed in Private Equity | Marriage, Fatherhood and Sports Team Owner, What it Takes to Do It All, with Justin Ishbia, Founder @ Sho

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Feb 26, 2024

In this engaging discussion, Justin Ishbia, Founder and Managing Partner of Shore Capital Partners, shares his journey from law student to leading a top-performing private equity firm. He dives into the importance of family influences in shaping his business strategies and how luck intertwines with hard work in private equity success. Justin emphasizes the critical balance between personal health, family life, and career ambitions, while offering insights on nurturing talent beyond financial incentives and the unique challenges that first-time CEOs face.

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INSIGHT

Competition Analysis

Shore Capital focuses on smaller, local businesses where they can gain an advantage.
They identify high-quality operators through industry referrals, often asking who competitors recommend.

ADVICE

Shine a Light

Use data and transparency to manage and motivate teams.
Those who are good at their jobs will welcome scrutiny, while those who are not will hide.

INSIGHT

First-Time CEOs

Justin Ishbia prefers first-time CEOs, especially those who have led large divisions, but lack overall CEO experience.
He supports them with a strong board and operational resources.

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Justin is the Founder and Managing Partner of one of the nation's best-performing private equity firms, Shore Capital Partners ("Shore"). Since the firm's inception in 2009, Shore has grown from 4 to over 140 team members managing over $6 billion in AUM, representing 900+ acquired companies and more than 33,000 employees. Shore is also one of the most active private equity firm in the world by deal volume according to PitchBook while continuing to achieve return profiles that rank Shore among the top 1% of private equity firms. Justin is an avid sports fan/investor and is the Alternate Governor for the Phoenix Suns (NBA), Phoenix Mercury (WNBA) and Nashville SC (MLS).

In Today's Episode with Justin Ishbia:

1. From Law Student to Founding Shore Capital:

How did seeing Justin's father operate impact how he thinks about building Shore today?
What does he know now that he wishes he had known when he started Shore?
How important a role does luck play in success? How has his mindset changed on this?

2. How to Make Top 1% PE Returns:

Why does Justin see private equity done well like "using a flashlight in a dark room"?
What are the top 3 elements that Justin looks for in all acquisitions they make at Shore?
When did Justin think there was an advantage of scale/network effect but was proved wrong?
How does Justin think about downside protection and risk mitigation?
Why does Justin like to back and invest in first time founders more than any other type?

3. Building World-Class Investing Teams:

Why does Justin believe the best companies are talent systems?
How does Justin structure the talent system at Shore to ensure consistent incredible talent?
What does Justin believe are the three traits required to win in private equity?
What question does Justin ask all potential CEOs he hires for acquired companies?
What has Justin learned is the single clearest sign of the top .1% talent?

4. Justin Ishbia: The Family Man and Husband:

What metric does Justin use to track whether he is being a good and present father?
Is it possible to be top 1% and have balance with a wife and family?
What does "great fatherhood" mean to Justin? How has his thoughts on this changed?
How does Justin think about bringing kids up in a world of immense privilege and ensuring they remain ground and ambitious?