Eric White is the president of Seismic Capital Company, an early-stage growth investor who leads the investment team and advisory board. He and his colleagues seek out companies that have the potential to become meaningful disruptors and household names and help them thrive with the capital, expertise and hands-on support they need to turn million-dollar early-stage ideas into billion-dollar businesses.
Russ Alan Prince: What are the advantages of investing in a portfolio rather than individual one-off deals?
Eric White: The easy answer is, “you shouldn’t have all your eggs in one basket.” But beyond that, the strategy that’s deployed by just about every successful private equity investor, hedge fund, asset manager and other professional investor is diversification. Why? Because diversification balances the risk of something going wrong.
At Seismic, every investor holds a piece of every investment we make. That way, we align ourselves with investors, so we can “win together.”
Prince: How does Seismic Capital provide management and support for investors who choose to invest in a portfolio?
White: Anyone who invests in Seismic invests in our entire portfolio—whatever is in the portfolio when they invest and any other investments we make while they remain an investor. This unique model ensures diversification, as their investment is spread across multiple companies and opportunities.
At Seismic, we are dedicated to nurturing and growing our companies in the most effective way possible. With years of experience managing for growth, our team is well equipped to support their development. Through extensive research, we have found that companies in our sweet spot—early stage, right after they have a product and a customer—create the best value if they can concentrate on what makes them unique. A key advantage of partnering with Seismic is that our companies can avoid spending non-productive time pursuing funding or handling administrative tasks. We provide the necessary capital throughout their growth journey and handle aspects such as HR, benefits, legal and accounting. That’s a win for everyone.
At Seismic, we are looking to open venture capital investing up to a broader community of investors, so more people can benefit from investing in the disruptors of tomorrow. Traditionally, the minimum investments in venture capital investing have been too high for most everyday investors. We offer virtually all investors—accredited, non-accredited, institutional, pension funds or family offices—the opportunity to participate in pre-public, early-stage investments in companies that can become the household names of tomorrow. We also opt not to charge the management fees that are generally associated with venture capital funds, further saving investors money, and we own the same class of shares as investors, so we all win and grow together.
Prince: Can you explain how investing in a portfolio aligns with long-term investment goals and risk-management strategies?
White: Early-stage investing takes a lot of patience and a good crystal ball. We identify which companies we can nurture so that in a year or two or five, the market will be ready for them to go public or to be sold. However, there are instances where a company is providing tremendous cash flow, in which case, because of how we are structured, we have the flexibility to decide to hold onto the company and reap the profits. In the portfolio we are building now, we hope there will be some early winners. We also recognize that some investments may require more time to mature. Our permanent capital structure allows us the flexibility to make the best decisions to benefit our investors, not just the most expedient decisions.
Prince: Following the recent investment in Game Cloud Network, can you share a few other sectors of opportunity Seismic Capital is targeting to diversify its portfolio?
White: Yes. Today we are heading toward additional investments to augment Game Cloud, and diversifying into business tools, healthcare, defensible technology, AI where it makes sense, specialized manufacturing for sustainability, and always looking to expand our reach. It’s a very exciting time for us.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.
