Ep. 137: Jonathon Ferguson, AshGrove Capital | Bespoke Financing and Underwriting B2B Software

0:00Jonathon Ferguson: Hey, everybody. Before we get started with today's episode, I want to take an opportunity to tell you about my new book, AI Marketing Blueprint. It just hit number one bestseller status across multiple categories on Amazon, and it walks you through a proven framework that we are taking our clients through here at How to SaaS and how to stay relevant and visible in a world with AI platforms. One of the biggest problems that we have seen across clients and companies is that the traditional channels that they relied on, like paid search or SEO, have declined significantly or are getting more expensive and competitive.

0:33Jonathon Ferguson: The reason for this is that a lot of buyers are starting to self-educate themselves and research on AI platforms. So a lot of that volume that was previously going to those channels is now moving to these new AI platforms. So to stay relevant, the book walks you through seven new rules that companies in all kinds of verticals and industries need to consider so that they can continue growing their pipeline and revenue and ultimately their enterprise value. So if this applies to your business or one of the companies that you've invested in, I definitely recommend that you pick up a copy. It's available on Amazon, on Apple Books, on Barnes & Noble, and even share it with your teams.

1:10Jonathon Ferguson: Grab a bunch of copies so that you can kind of consume the content together and start to apply it to your business. And with that said, let's move on to the episode. Welcome to the Private Equity Value Creation Podcast, where we interview leading investors, operators, bankers, and advisors to help you answer one question. How do we increase the enterprise value of our companies? My name is Shiv Narayanan, and each episode, I will dive deep with a guest to help you become a better value creator and capital allocator. So with that said, let's jump right in and let's get started with today's episode.

1:45Jonathon Ferguson: My guest today is Jonathan Ferguson, who is a co-founder and managing partner at Ashgrove Capital. And what's really interesting about Jonathan and the work that they do at Ashgrove is that they provide growth credit to founders and sponsors. And we've had a bunch of lenders on the podcast in the past. But what I really liked about Jonathan's perspective is how they work with companies and with investors by providing these credit facilities. And they actually even get involved at the value creation level. And they sit on the boards of the companies that they're deploying these credit facilities into.

2:16Jonathon Ferguson: So there's really great insights in terms of how they are identifying companies, how they're actually encouraging them to deploy the capital that they're providing these companies within the right areas. And now they're also holding those companies accountable while factoring in market trends and changes like things like AI that are really impacting how companies are valued or looking at the future state of companies. So there's a lot of great wisdom that Jonathan shares on the episode. And I think regardless of whether you're a sponsor, a founder, or even a debt provider, I think there's a lot of great takeaways to get from the episode.

2:49Jonathon Ferguson: So with that said, I'll leave you to it. Enjoy the episode.

3:01Jonathon Ferguson: All right, Jonathan, welcome to the show. How's it going? Good. Thank you. Thank you for having me. Yeah, excited to have you on. So why don't we start with your background in Ashgrove and then let's go from there. Yeah, sounds good. So I'm John Ferguson, one of the co-founders and managing partner at Ashgrove and spent almost 25 years in credit. So I started my career in a very traditional leverage finance role in the early 2000s and then was part of a founding team, which was a Barclays spin out in 2007 of the Aries management business in Europe. After a number of years there, I also went to help Goldman start a private capital business in their Stratford Sits group in London, but investing across Europe.

3:52in 2014. And after five years there, decided to start Ashgrove along with my co-founders, Shaw Fretwell and Ilka Rantanen. I guess pivoting to the second part of your question, kind of the origins of Ashgrove and what do we do? You know, in a nutshell, we are a specialist, if you like, capital solutions and credit provider that focuses on B2B software and B2B recurring services businesses where we typically provide them 10 to 50 million euros to capital. We back sponsor less businesses. We back sponsor back businesses all across the European landscape.

4:37Jonathon Ferguson: Yeah, I guess with that, what are you looking for when you're deploying credit in this way? Because I guess it's a little bit different than just investing or buying out companies. So, and what's the difference between, let's say working directly with founders or with funds where you're supporting portfolio companies versus working directly with the owner or the founder of a business? Yeah. What we're looking for is really high value, good businesses that offer a strong value proposition, so product, if you will, to their end customers that is highly embedded in their customers tech stack that drives good retention metrics good unit economics and businesses that have inbuilt momentum in their go-to-market so things we will often see is you know ability to land expand up so existing customers and have a level of sustainable growth which underpins both obviously value he is the lender but also just underpins this called high value product And if you think through what that means, typically for us, that means really granular rate retention metrics on recurring revenue, high gross margins, always indicative of, you know, quite value-added product and pricing power, defensive growth characteristics, and then the ability to really segment their cost basis so you understand where they're investing for growth and where you can really harvest to drive high-speed cash in the conversion.

6:11the difference really in our perspective working with founders and founders or founder led businesses and those that are sponsor backed the biggest difference is really around the speed at which those opportunities move through our pipeline or our funnel if you will as you can imagine a lot of the sponsor backed opportunities we look at relatively high cadence high velocity being pre-screened. There's normally some sort of advisor on the M &A side around the opportunity probably being some sort of due diligence provided either then nor commissioned by the buyer side. And so these deals tend to come to fruition or not over a two, three-month period, relatively.

7:05Sponsor's transactions can take a while. We've been around some businesses for three, four years, tracking them, speaking to the founder, sharing ideas, as I said, tracking how they're getting on, waiting for them perhaps to get larger, perhaps waiting for there to be a catalyst for either a financing from ourselves or a structured capital investment. And so that gestation period takes that much longer. It's very much around building a kind of a longer-term partnership with a founder, which happens much quicker with sponsors who are frankly more familiar with the deal process in many cases, not all, but in many cases.

7:49And then, look, the final thing I would say is we sit on the board of two-thirds of our portfolio companies, typically as a board observer. not every single one of those is sponsorless but the majority yeah all of them that are sponsorless we sit on the board and some of them that are sponsored that we sit on the board again and so the the interaction with a lot of the founders is very much around they want to see and understand what's happening in our portfolio on a no-names basis you know as a b2b software B2B Recurrent Services Specialists, they'll often quiz us on what are we seeing around how people price product?

8:30How do they think around packaging up value? How do they think about in the world of AI, which I'm sure we'll talk about later? How do you think about pricing, seat-based pricing, modular pricing? How do you think about financial KPIs and making sure you're exit ready? relatively normal things, which we can obviously provide a lens on given the size of our portfolio and that we're a sector specialist.

8:58Jonathon Ferguson: Yeah, I guess the interesting thing that jumps out as you're walking us through that is that you're looking for a lot of similar characteristics as a buyout fund would. Healthy growth, good gross margins, there's net revenue retention that's over 100 % or in a vertical where there's stickiness or mission critical and maybe can't be disrupted by AI, but you guys are actually doing it on the credit side and actually supporting these companies. So help us understand that a little bit more. Like the type of, what does the deal structure look like for the business? And how is it different from, let's say, direct lending or venture debt or other types of financing available to these companies or other avenues that they can potentially take?

9:44Yeah. Yeah, yeah, yeah. So you're absolutely right. Yeah. A lot of the work we do is fundamentally very, very similar to that of an equity investor. We're just running a different product. And actually, it's very similar on the origination side. The way we originate is incredibly similar. The key differences are really around, I'd say, the starting point. Again, being somatic, our starting point is always, what is the value of this given business? what is the value and what is there for my attachment point, the detachment point that the financing are putting in place. We at Ashgram on the specialty lending side always provide a senior secured product.

10:24So it's a senior secured loan against that business. The use of proceeds in two-thirds of the instances is driving some sort of growth or both organic or inorganic in that business. We do also finance changes from trouble. we have a heavy, heavy weighting towards growth. And so ultimately, your starting position is what is the value, but also how do I really underwrite that momentum, as I talked about earlier, the ability to grow. The interesting thing from our perspective is because we write tickets of 10 to 50 million euros across Europe, when you think about the direct lending world, Typically, what you will see is very large direct lenders doing bigger and bigger deals every year, raising large emerging funds.

11:19Very, very successful business model. However, they will not spend time typically on a 15, 20 million deal, which ultimately then wants to go to 35. And conversely, the smaller direct lenders, maybe the regional direct lenders, will not be a B2B software specialist and have that kind of structuring toolkit or the toolkit. we do to provide perhaps an ARR financing or an EBDA financing. And so when you marry up those two matrices, there really isn't an awful lot of capital to support this ecosystem, particularly around growth. I think if you were looking at this market 20 years ago, you would have also probably said that banks were more active.

12:04And I think we're all familiar with that structural trend. The impact of the risk-weighted asset treatment for banks has really driven them out of this market with only a handful of very small exceptions. And so actually that difference between the direct lending community, if you will, and the traditional banking community is size, complexity, structuring, and being a specialist. Then the other side of the fence, the venture debt. and the venture debt guys and girls, that community is really, the way in which they underwrite is really focused on, in our view, bridging to the next equity route and taking a top-down view on this is a good business.

12:51Yes, it's growing well. There's a really good late-stage VC in here or maybe early growth equity house. We buy the fact they're going to raise another series, another round. And that's very, very different to the way we think about at Ashgrove being a growth financier of software businesses. We will start by effectively looking at the KPIs of their business, retention metrics, unit economics, building our own model, building our own set of forecasts that we believe is a sensible kind of case going forward. that will determine one as i talked about earlier the value the detachment the attachment of our instrument but it will also tell us pretty quickly whether we think that business is profitable today or not and there's the key difference we're not relying on another series being raised empty being raised by a minority on havc we're basically saying that our analysis tells us this business it could be break even could be suppressing its EBITDA because it's growing so quickly but we have to be able to prove that we have to believe that business has sustainable franchise value because as a lender what we cannot live with is volatility or severity and value therefore we are you know ultimately underwriting on a conviction basis, what we think that business is worth over time, irrespective of whether they can or cannot raise another round.

14:30So it's a different approach. It's all bottomed up and topped out and far less reliant on whether or not another VC round can be raised or both equity round can be raised. That's in our mind of assuming the venture debt and the growth financing that we do. And so when you then take a massive step back and look at Europe, there is a real undersupply of credit capital to this space. A lot of people have published articles. There's a lot of academic articles on this topic. The ecosystem isn't that well funded and yet the demand for capital from pretty deep, frankly, opportunity set of potential borrowers is very real and it's pretty robust.

15:19And so So that's the kind of area in which we play, and that's the differences in the, I guess, the participants, depending on which size and area you're in.

15:28Jonathon Ferguson: And so as you're underwriting these deals, you're less concerned about if there's a venture and exit. You're just looking at strong business fundamentals. Yeah, because ultimately, there are things we can control, right? And so as a lender, it's a pretty uncomfortable situation if I'm trying to underwrite what's the market outcome going to be in three, four, five years time. I want to be in a position where I'm underwriting, yes, my conviction today. And hey, that's got to be right within certain parameters. But ultimately, we are taking a view and running analysis to understand what we think that value is over time, rather than saying we think there will be an exit event and so on.

16:16And that feeds into everything we do, how we think about structuring, how we think about risk, how we think about controls.

16:24Jonathon Ferguson: How frequently are you coming in with a credit facility along with a sponsor that is engaged in a buyout or making a major investment? Like, does it happen at the same time or are you finding yourselves getting pulled into deals even post-investment or post-acquisition where you're out or a couple of years out? Maybe the fund or the firm rather has other objectives or they need debt on the business and now they're looking for a company. Yeah, I think it's a really good point. it varies for us so the easiest way to describe it is sponsor for us covers late stage vc growth equity and normally small to mid-cap p if you think across those three buckets it varies so on the vc guys it's pretty rare for us to finance a business or invest at the same time as the vc It tends to be an asset that's already in their portfolio for a number of years.

17:23And the use of proceeds of our facility is normally helping to accelerate some sort of growth. It can be cashed to balance sheet. It could be cashed to balance sheet plus cleaning up some elements of previous debt on the balance sheet or maybe an overdraft facility or something else that the business has got along the way. but fundamentally we are very rarely on a venture deal or venture capital deal I should say coming in at the change of control. Growth equity is a bit of a mix. Slightly later on, slightly more mature businesses it's a bit of a mix as we see both and particularly in this environment where growth is taking longer, it costs more on average assets I think we all would agree are being held longer by equity investors.

18:14our capital as a non-dilutative solution is particularly interesting because it can help to accelerate whether that's inorganic making bolt on acquisitions that maybe depress valuations which are pretty attractive or investing maybe in go-to-market entry in a new geography and so on p is probably the one where typically speaking we are probably more likely to come in a change of control. When I think about our overall portfolio, it's probably only 25-30 % of the time that we are doing so. And so that just kind of shows the mix across those three sponsor buckets.

18:57Jonathon Ferguson: We'll get back to the show in just a moment. But before we do, one of the most common and important value creation levers that we hear about on the show from private equity investors and our own PE partners is go to market. Yet when these same PE partners bring us into their portfolio companies or new target investments that they're exploring, we find that the marketing function is quite immature, underutilized and under optimized. And so that's a huge opportunity that we see inside these companies. And if you have a portfolio company that you feel like it's scaled a lot faster to drive more pipeline and revenue, or you're looking at a new investment where you feel like that could be core to your investment thesis, But we'd love to explore that with you and figure out how we can partner with you to drive more enterprise value creation on the marketing side.

19:42Jonathon Ferguson: Similar to the way that we've done with major PE firms like TA, Updata, HG, SDG, and many more. At this point, we've done hundreds of engagements across hundreds of industries and verticals. And we have a ton of benchmarks and frameworks that we bring to these engagements to help you drive as much enterprise value as quickly as possible. So if that sounds like something that you might be interested in, you can just email me directly at shiv at howtosass.com or go to our website and schedule a demo. And we'd love to speak with you about it further. And now with that said, let's get back to the show.

20:15Yeah.

20:16Jonathon Ferguson: And you mentioned earlier, one of the things that jumped out to me is that you're involved at the board level inside these companies, even though you're providing credit. So can you talk us about through that, like just how involved are you getting with these companies? and obviously you don't have control over the assets. So how do you get involved and support the businesses? Yeah, again, it varies hugely by asset. We obviously, as I said, have a lens, have a perspective given the size of our portfolio across B2B software and recurring services in Europe. We obviously have a view of certain sub-segments within software.

20:55We look at actually 400 plus deals a year and do eight to 10 across our teams in London and Copenhagen. So ultimately, that gives us insights. But you're right to call it out. Some management teams, shareholders, very much want to hear what we think on specific issues. Maybe not all, but on specific issues. and you're able to provide more than just capital in that instance right you're adding value we're not trying to be equity guys we are adding value beyond just the capital that we provide they were other instances it's far less involved other instances you know that there's far less engagement at the board level and so it really does vary quite considerably you know we will sometimes be attending those boards on a quarterly basis, sometimes on a monthly basis.

21:57One of the very obvious areas that we do get heavily involved in and probably the most frequent area is around financial reporting KPIs. How should we, for example, be thinking about allocating capital and measuring attribution across go-to-market, which is an area I think you're very familiar with, trying to understand the efficiency of marketing spent, right, and where to allocate euros or dollars to really maximize that return. That can be a pretty interesting debate depending on which sub-segment you're in, what a sales cycle is like, who your ICP, et cetera. And so these are all areas that we can get involved in, but you're right.

22:44It really varies on the shareholders, the management team, and what segment they're in.

22:52Jonathon Ferguson: Yeah, I think that's an interesting one, right? Because you're not able to influence it directly, but you have to get involved to some degree. How much expertise or resources or like your own perspective are you bringing to the table, right? Do you have like a value creation approach that you're bringing into these companies? not not so much that it's a standardized playbook so so we don't have you know you you you you've probably as of i have heard of certain houses will have a certain approach or a certain um you know key six seven levers that they go to immediately um that that is their kind of their recognizable playbook i think what we've seen over years is a lot of pattern recognition and when you play in the kind of the area of the market that we do what you will often find is you know there will be a lot of professionalization and thought you can put into for example go to market um you know it is it is an area that tends to i think get less attention earlier in the life of businesses, particularly within B2B software.

24:10And I think when you move from that really successful, call it 15, 16, 17 millionaire RR business, trying to turn that into a 50 millionaire RR business, that's quite a different journey, right? And so actually trying to be thoughtful around that and helpful around that, that would be a lever that I would identify as, we see this a lot, right? This is kind of muscle memory for us. we're used to this, this would be something that we would recommend to look at if we have that engagement at the board. Similarly, just sophistication around reporting board packs, how do they think about some of the strategic things they can change and or analyze to give themselves a good view at the boardroom table of what's going on within the business.

25:00another really really obvious one would be you will hear you know actually software investors also talking about you know doing pretty extensive diligence post deal when they're already in the asset around customers how customer views changing why do they want to know that well they frankly inform their own r &d roadmap understand actually what are we doing well how can i change customers success, maybe account management, maybe I can launch a kind of a light product for some of my smaller customers, self-service, you know, reducing cost to serve. You know, again, levers that I think when you traffic in this space are fairly intuitive, but we don't have a kind of, should we say, go to, this is our playbook as Ashgrove, but we will cut our cloth to suit the situation and the particular asset at that time particularly as i say where you're investing in businesses that are going from roughly 20 25 million of ar to to 50 are you getting involved because i'm assuming when

26:12Jonathon Ferguson: you're lending this money you have a perspective on what that capital should be used for how are you kind of staying on top of that and making sure that the capital is being used for ways to kind of maybe grow the business or make it more efficient or drive more even to margins like just to help us understand that. Yeah, again, without avoiding the question, it does it does vary. I mean, we can put sublimits in. We've done that before. You can put sublimits of drawings in and delay draw facilities. So maybe only a third of the capital can be drawn until such time as a certain performance milestone is reached.

26:53a certain period of time. We've done that in the past. We also turned around and funded different separate accounts and said, look, this will have to be funded into here for this specific purpose. You can do so through the sources and uses as well, particularly if you're, say, repaying some net debt on the valid sheet or perhaps taking out some older shareholders, angel investors. that's much more straightforward but you're right we again it comes back to board frankly access and being close to your businesses rather like an equity house we want to really be close to our portfolio companies we're not trying to run the businesses but we're not we are trying to protect our investment and make sure to your point if it's important to us and we have to therefore have oversight where that capital is going, it's both the softer side of that, but also, frankly, the legal structuring, the mechanisms within the document, the lay draw facilities.

28:05We do put a lot of performance metrics into our loan facilities, which unlocks further capacity. So in some ways, what we say to a lot of teams is, this facility can organically grow without any interaction with us potentially over the next two, three years. It can double. But to unlock that, it's all performance driven. And if you are not able to hit those metrics, then we have to have a conversation. And so you can set up some of these facilities in such a way, it gives people very clear line of sight on if you hit your plan or within 5 % of that plan, then the capital is there and if not then let's chat.

28:50Right.

28:51Jonathon Ferguson: How are you factoring in AI into your decision making and how is it affecting how you're looking at these companies because obviously software valuations have taken ahead and companies revenue metrics have slowed down so how are you factoring that into your underwriting and how you look at these investments if you will? Yeah. So it probably wouldn't surprise you to hear that ever since we've been doing this, when we assess potential opportunities and we come to our own view on value, that value is pretty heavily discounted versus what empty messes tend to pay for those businesses. And it will vary again by asset, but roughly, roughly, it's about half.

29:33So if over the last seven years, the average buy multiple has been six times ARR in B2B software, we would have maybe on average valued those businesses at three times that one that creates a natural buffer it isn't as simple as say a 50 % haircut but that's just what the math tells us on average across our port findings but that also does mean that when there are re-ratings to your point we have a greater buffer in terms of the value protection that we have with less assets pivoting to ai you know again when we started the business like a lot of investors as you mentioned it yourself our focus was firstly on value value is in our mind inherently connected to the quality of business models so we're looking at a set of granular subscription order renew annual contracts You have no kind of termination for convenience type causes, really nice subscription granular books.

30:41And ultimately, as part of those business models that we're looking for within software, we're looking at the supertension metrics, all the things you'd expect. But the second thing on our list has always been, and the reason this relates to AI is product. Product for us is kind of the North Star, right? you have to have a good product and fundamentally you know we were therefore going deep into product use case why is it mission critical how is it embedded into your stack how is how do you put your product into the customer's stack what other products are in the stack that are adjacent because we'll come back to it but in in the new kind of ai world the lines have been blurred So an adjacent product using the same kind of data set within your customer could very easily come and move sideways into what used to be perhaps a more insulated area.

31:38So product was always important for us and always has been. And then tech stack, agility of tech stack, level of tech there, ability to develop and cost to serve. All critical. And then finally, market. So these are areas that, you know, I don't think there's anything massively controversial in that, but they're areas we've always been focused on. What I would say is AI has simply amplified the speed at which things change across these areas. And so I look at our portfolios. We, in effect, have invested only in vertical software with proprietary data sets or systems of record. and that is because seven eight years ago we started the business we had a crystal ball and understood you know the developments in gen ai it was simply because that was in our view the hardest models to really uh disintermediate and again coming back to the example i just gave a product if you're embedded in the stack of your customer using proprietary data actually monetizing and leveraging some of that insight from that data over time and that time series becomes valuable that just becomes really hard to switch out even as even as economically as possible the risk for doing so becomes difficult and so all of these factors in our mind were just kind of good investing practice within b2b software and you know obviously when you overlay on top of that AI risk to your question, yeah, things are very sped up and the ability to be disintermediated, see margin pressure, increased cost to serve, you know, stress on the tech stack is a very real risk that we take incredibly seriously.

33:34We spend a lot of time diligencing the tech stack of our potential investments. That's never been so important as this environment, right? Because there is a bit of an R &D arms race going on, particularly in certain software sub-segments. And then finally, market, you've got to understand what's the pace of change with the market. AI has really accelerated the pace of change, not just at the product level, but also just markets now evolving that much quicker, consolidating that much quicker, price changes, price pressure coming much quicker because of AI. So overall for us, it's both a risk and opportunity for our portfolio companies, the adoption of AI.

34:18The way in which we underwrite is basically the same, but I would say the lens through which we underwrite AI is across all those areas I mentioned. So value driven by business model, product, qualitative tech stack, and market. It isn't one work stream. When we think about AI, it's holistic. It's overarching across all of those. And that's why in our view, it's very valuable to be a specialist. It's very valuable to have deep insights into your portfolio's company's customers. It's valuable to have, again, a big portfolio where you can see what good looks like in the world of a rapidly changing, agentic AI environment and understanding where adoption is happening quickest in your existing portfolio.

35:12So these are all things that we're doing. I don't think it's wholesale change. It's refining of our old underwriting world.

35:22Jonathon Ferguson: Have all these changes made you reconsider investing or giving more credit to SaaS companies with the fear that's out there that SaaS can potentially be replaced or AI is going to lead to a different generation of companies that might leave SaaS companies behind? Yeah, look, I think it definitely makes us think there's a polarized valuation environment. Absolutely. I think certain companies attract a very different valuation in this world now. I think also it does make you think, quite rightly, it should make you think about duration risk. And as a credit investor, you know, duration risk and value of a business in the next three, four, five years, in our mind, that's got credit risk, that's equity risk.

36:11And so making sure that we're finding a way to de-risk, de-lever through the next two, three years, making sure we are not taking outsized value risk on what is the future discount rate in four or five years on software businesses in certain sub-segments. I don't think any of us know that. Clearly, that was one of the big, big drivers of the re-rating earlier this year on public equity in software, right? Because people said, well, hey, fundamentally, nothing's changed, but there's uncertainty. Therefore, the discount rates have changed. And so we don't take that risk. and we have structures that are pretty conservative that de-risk quickly and maintain that de-risking over time.

37:01So I would be the first to acknowledge that AI has changed the valuation environmentally pretty rapidly. It also means in our experience that there are certain businesses that are finding incredibly difficult to grow and that the unit economics of those businesses are changing very quickly. And again, lender rather than another investor across the capital structure. We deliberately put in tests to ensure we understand changes in unit economics. So what is return on capital internally within that business? What is the growth rate? So to mix both your questions, if we put cash to balance sheet, yes, I want to know what it's for.

37:46If it's going to accelerate sales and marketing and be used to go into entering a new market, then I'm going to have to make sure that the top line is growing. And if it's not growing within a certain tolerance, that tells me the unit economics on that spend has been poor. I don't capture that, right? And so that's linked to value. It's linked to protection. So that's the way we think about making sure that we're covering the bases and we're not taking on to non-credit risk around duration, performance, quite rightly in a changing environment.

38:22Jonathon Ferguson: That's fantastic. I know we're coming up on time here, Jonathan, but if people want to get in touch with you or work potentially with Ashgrove, what's the best way to do that? Yeah, please do feel free to reach out. We're on LinkedIn, Ashgrove Capital. We also have a website with all the team contact details there, both in London and Nordic Hub, which is in Copenhagen. and as I mentioned we provide both especially lending, senior secured financing but also structured capital solutions as well in a preferred equity format they're the two easiest ways to reach out either via the website or LinkedIn and I'm always happy to have a chat as I said, we spend a lot of time tracking these businesses over many many years and you'll probably bump into some of our team at the various industry conferences as well.

39:19Jonathon Ferguson: Awesome. We'll be sure to include all of that in the links in the show notes. And with that said, Jonathan, thanks for coming on and sharing your wisdom. We haven't actually had a growth credit firm on the podcast. So it was interesting to kind of see how you guys are evaluating these deals and underwriting them and how you look at value creation and how you ultimately try to get capital back to your own investors. So this was great. And thanks for coming on and sharing all that. I really appreciate it. Enjoyed it. And yeah, good to see you. And yeah, hopefully catch up again soon. Yeah, we'll chat soon.

39:50Jonathon Ferguson: Thanks for listening to today's episode. Before we close off, if you haven't already, go grab a copy of my new book, AI Marketing Blueprint. It just hit number one bestseller status on Amazon across multiple categories. And it walks you through a proven framework on how to scale revenue and pipeline in a world with AI platforms, where customers are self-educating and learning a lot more off your website and where companies are struggling with declining inbound traffic volumes from paid search, paid social, and even organic and SEO channels. So if that sounds like you or a company that you're invested in, go grab a copy for yourself, your team, or your portfolio company, and I'm sure it's going to help you out on your journey with that business.

40:31Jonathon Ferguson: And with that said, thanks for listening today, and we'll see you guys next time.

40:43Thank you.