The Art of Building a Different Kind of Private Equity Firm - Bobby Ocampo on Raising the Brand

Speaker A: Most editions of Raising the Brand feature the people building firm identity from inside the marketing or IR seat. This one comes at it from a different angle. The founders Bobby Ocampo is co founder and managing partner of Blueprint Equity, the San Diego based growth equity firm he launched with Sheldon Lewis in 2018. Blueprint backs founder led enterprise software businesses that have built revenue outside of traditional venture slipstream. Companies that are often bootstrapped, rarely in anyone's deal flow database, and unlikely to return a cold email from a firm they've never heard of. Which makes Brand for Blueprint a sourcing engine as much as a fundraising one. The approach is working. In January, Blueprint closed its third fund at $333 million. Before founding Blueprint, Bobby was a partner at Revolution Ventures and an associate at growtek Ventures. We're delighted to have you on Raising the brand Bobby to talk about building a firm's name from zero, why differentiation has to be real rather than rhetorical and what he tell an emerging GP raising fundone today. Bobby, welcome. It's a real pleasure to have you on.

Speaker B: No, thank you so much for having me. I'm excited about it.

Speaker A: Good stuff. Well, let's dive right in. Um, you spent years on the investing side at Revolution and at Grotech before founding Blueprint nearly a decade ago. What was the gap in the market you saw and how much of the original thesis was about what you'd invest in versus how you'd show up differently?

Speaker B: Yes, a great question. So I'd say, um, so my co founder came uh, from a fund called Mainsail Partners. And so it was a blend of kind of the strategies that he uh, saw and then what I saw, so I was largely a venture investor and what I found was that um, man, it is tough to be in venture and um, you really need uh, large outcomes to make up for all the failures going to invest in. And frankly I didn't really like that style of investing where high loss ratio and you're really betting on SpaceX, Uber, Airbnb, and it's a different game. And frankly what I was investing in a lot of at my prior firms are a lot of these businesses where they were good small businesses but they were doing well on their own. And that's very much what Sheldon was doing at his prior firm. But what he saw was that, and we both saw that uh, a lot of these firms, they were successful operating where we operate in now. But you do get the pull to raise more and more money when you're more successful. Right? It's really hard to turn that down where if I'm making three, four times my money at a smaller fund, uh, well it's easier to make two times my money if you're a much bigger fund and lower risk. And by the way I get paid a higher salary. So it's really hard to resist that urge of moving uh, uh, later stage because everything is telling you and your ego is telling you, well I could go raise more money and tell everyone I've raised a billion dollar plus fund. But we didn't want to do that. And that was kind of where we first started blueprints. We're going to operate this zone where everyone has left because you leave when you're bigger. And we want to focus on serving these businesses that are underserved but they need the most operational help. So what is that? They are generally 1 to 5 million uh, ARR, growing uh, nicely so growing anywhere from 50 to 500%. Uh but for one reason or another they don't operate in a large market. Uh and or maybe the founder is just not shooting for the stars. They don't want to be a 10, $20 billion business. They want to sell for a couple hundred million to 5,700 million. Right. And there are a lot of great uh, outcomes that happen there and very few that actually happen in unicorn decacorn land. And so that's really where we want to operate in and stay here. So even with our larger fund, the only thing that's changing is we're making more investments, not bigger investments. And that uh, hopefully we'll be able to show and prove that uh, we could still operate here without moving uh, uh to a different part of the market.

Speaker A: And when you had to stand up the firm, you had no track record or no firm track record, no logo anyone recognizes yet. Which is where the early years we got really interesting. So every manager starts with that same problem and what worked in those first few years of building blueprints name with founders and with LPs.

Speaker B: Well that's a great question because we mentor not like officially but unofficially mentor a lot of gps. Right. And it's funny now that I understand uh, being more of an LP and looking at all their decks and all that, giving them feedback. Everything that we thought early on is totally overrated. Everyone comes has a credible background. Everyone went to a pretty good school or a grade school. Everyone has a somewhat attributable or not really a track record. And pretty much the ideas are not that novel frankly. And I'll tell people, especially our Peers who are operating in a zone where we try to operate in. Not that we're a pioneer, right? But eight years ago when we found a blueprint, there were only a couple funds doing what we're doing. And so it was a positive in that it was a lot less competitive, right? It was a negative in that LPs could not bucket us into any sort of. Or label us, right? That's a big problem because at, uh, mostly all LP is out there are trying to put you in a camp and they have allocation in that camp. But if you're an emerging category, there's no, especially if you're an emerging manager, you're super unproven in an unproven market, you're not going to get any uptake at all, right? And so that's kind of like the funny kind of nuance of what we were doing is that it was actually the best time to be investing in us when there were very, very few managers doing what we're doing now. It's a lot more proven category, right? But if you're a GP trying to raise in that category, LPs have already made their bets because they're uh, you know, call it a dozen core managers doing what we're doing, but several dozen more that kind of touch on elements what we're doing. So now it's kind of like, well, what do you do if you're in a merchant gp? You can't. There's no real way to stand out, right? And, and the only way to stand out is to prove it. There's nothing to do. It, uh, does not matter where you went to school, it does not matter how great your deck is, right? You just have to scratch and claw and prove it. Because 99% of the firms out there who look exactly like XYZ firm trying to raise, they're all going to die. So you have to be in that 1% not just to succeed, but to survive because most of these funds are just going to run out of steam. So. So there's no secret. You just gotta go and do it and scratch and claw, make an early investment or two, prove that it's working, and then with that proof, you're gonna be able to raise. But unfortunately, almost every firm out there that was kind of doing what we're doing and what we were doing eight years ago to now, it's just not gonna work. You're either gonna get tired, you're not gonna be able to raise money, and then you're just gonna, after a year or two I've tried to make it work. Not making any salary. I get it. People are just going to give up. Right. I'm sorry, I'm going to talk to you. Uh, but my co founder and I were also at a different point in our lives when we were founding Blueprint. Right. Like we. He did not have kids, I did not have kids. We had enough saved where we can go for a few years without making any real salary or any salary at all, like losing money. So if you are a GP who's not ready for that, that there's no way I would do it because there's no shot. And you've just got to prove it for two or three years and be okay with having a tenuous life. Right. I don't know if that was all helpful, but I would just say there's really no differentiation in what we do. It's all a matter of who's going to be able to prove and execute it and who's not.

Speaker A: Yeah. You have to get the reps in. That's very similar to any entrepreneurship. Right.

Speaker B: Have to. Right. It's like, uh, you've seen Rocky, Rocky 4, right. Where Rocky Balboa is in Russia training in a barn. Right. And there's no equipment that. That is pretty much what it is. Right. Except you don't have a trainer. You're all by yourself. And so, uh, it is not for the faint of heart like Sheldon and I, if we knew what we know now, we would have changed a lot of things. Right. But if we are trying to raise Blueprint now as a fund one, I don't think we've been able to do it. There's, there's, it's not going to happen. There's too much GP supply and lack of distributions. LPs are very, very hesitant, deploying dollars into new GPS. Uh, it's just not. It wouldn't have happened. It wouldn't have happened. No way.

Speaker A: Yeah. Are there any resources during those first few years that you tapped into, just out of curiosity?

Speaker B: No, I think the only thing, I think we got some help. Kind of like talking to peers, Right. Our former bosses. But there's nothing. There's no playbook, there's nothing. It's a lot more, uh, um, ah, farmed now, where I would have loved to talk to 10 or 20 other GPs who are doing what we're doing. A lot of new GPS are doing now, where they'll reach out, we'll talk to them. Right. That didn't exist, so. No, I don't think so. And um, uh, it makes it tough. There's no book.

Speaker A: And so you talked about building the name from nothing. And Blueprint's name comes with a very particular vocabulary attached to it. So the language is unusually specific I'd say highly addictive business critical enterprise applications and founders outside the traditional venture slipstream. Where did that come from? And was that very deliberate, that word Smithing?

Speaker B: Yeah, I think uh, because no one knows who we are. Right. And no one will like we're not, we're not Sequoia, we never will be. We don't aspire to be. Right. And so we could spend all this time trying to be something we're not and like no, we're going to lean into exactly who we are. And that is scrappy. Going places where people traditionally don't go doing the work that most firms are practically all firms don't want to do at a stage at uh, which it is not lucrative for them. And that, that's really what it comes down to and is that we are doing the work at a very um, tenuous uh, time for the company, uh, that no one else is going to want to do. And uh, supplying these founders with support that most firms our size can't provide. That is really the only difference is that we have a large team. So we have over 20 people cutting 5 to 10 $15 million checks. Largely 5 to 10 million dollars checks. Right. Helping professionalizing their org chart. That means hiring up and down the stack. That means uh, uh, implanting our entire go to market practice. Uh uh, when we're investing at a function that's largely zero, we invest it is surrounding them, everything around AI and empowering them to be at the forefront of it. And so you talk about all these things and this is not novel, uh, but it's novel at our stage. So if we're talking to multibillion dollar funds, right, they all do what we do, but they're never going to do what we're doing at a stage where the company's only 1 to 5 million in revenue. They're all waiting for these companies get to 10, 20, 30 million in revenue. And that's really, it is we identify these companies, we partner with them earlier and we support them earlier. That is really the only difference between us and other firms. If other firm, bigger firm, multibillion dollar firms came downstream, they would be as good as uh, or uh, maybe better than how we're doing. But you know, multibillion dollar funds as you know have the fee stream to support hundreds of people. You come do what we do. Right. You don't really have that. So it really takes sacrifice across our entire team to be able to support dysfunction. Because different from every private equity firm, we don't charge for these, um, uh, the value creation, what I call our build team. And practically every other private equity firm does. And so that's really about a long answer. And I'm not really answering your question other than, yeah, it is purposeful because, uh, we are only a fit for a small subset of founders. Right. And then we might not even be a fit for them. Even though there are millions of businesses out there, there might only be a few hundred a year that we're a mutual fit for, and it's our job to get in front.

Speaker A: Yeah. And those, those companies, they're often bootstrapped and they have not yet raised institutional capital. Which means, I mean, like, you can tell me, are they sitting in many deal flow databases? And if not, like, how do you think about the inbound inbound versus outbound deal flow?

Speaker B: Gosh, it is, uh, a hundred percent, almost 100% outbound. And I would say, uh, 10, 20 years ago, uh, you're right that these companies were not sitting in databases. Uh, right, that's changed, um, with tools like Grada and Source scrub and, um, pitchbook. Uh, right. What hasn't changed, though, is, uh, the ability to break in the conversion rate. So now it went from I'm clipping magazine, uh, pages off magazines, off business journals and yellow pages, and doing a lot of trying to find business, trying to find phone numbers and all that. Now all that's been professionalized. Now founders are getting inundated. But who is doing the best job of breaking in, being relatable, being trustworthy, visiting, going to conferences, doing work ahead of, uh, even having any sort of relationship where if a founder we see has an open job spec and they're looking for a VP of sales, well, we know that, hey, we evaluate their talent team, and we're going to, hey, here might be four or five really nice profiles that might be a fit for this company. And then talking through it with the founder, even in our first call, I think that that's really the conversion ratio of who's breaking in. Now that these business, uh, lists have been democratized, that is the next step. And that is still an art. We think we're good at it, but I'm sure we can be better. And I'm sure we're better than a lot of our peers. But we're always trying to evolve that. Right, because it's not that the blind email, cold phone call, cold email. That, that, that was like novel 5, 10, 15 years ago. We all uh, that that's totally changed now.

Speaker A: Yeah. And you mentioned um, earlier in interview, you mentioned your value creation team run sales and marketing playbooks for portfolio companies. You clearly think hard about how a founder makes the choice of where they raise capital from. Does that go to market muscle that you have internally in your value creation team? Does that get pointed at blueprint itself? And if so, what does kind of your playbook look like there? I mean you mentioned Grata Sourcegroup. You mentioned outbound. Very curious.

Speaker B: We do try to lead with it early. I think that um, now you have to be careful, right, because there are certain founders who are very much, hey, I'm good. Which is totally fine. Right. Um, but it's our belief that uh, most of the companies we talk to and most all the companies we work with that there is some missing gap on the org chart. Right. And so to your question, we do try to lead with it early. Um, and we do try to engage our team of now six, six and a half people in our, what we call our build team. Early in the phone calls build rapport. But to help identify, hey, here's where you might want to think about or what you're missing and doing a lot of early work. So, so yeah, I might not be answering your question other than yes, we, we do try to lead with it and we don't try to have it be pure marketing. I mean it is very important because um, if we're going to be investing in 20 to 25 companies in a fund, the only way, um, it scales across our team is to be able to support the company as good, if not better than when we had a portfolio of only two or three companies. Right. And so that, that starts with everything is highly, it is a uh, highly curated machine. Everything is like, we try to get a perfect like uh, what do you call it, like an orchestra of different practitioners and different service, uh, um, uh, modes of service that we can help. Uh, either on a 1 to 10, it might be, hey, only a phone call. We have to help them in one thing. Or it might be, hey, I'm really struggling here. Our go to market function is completely lacking. Well, we were total outbound and now it's not working. We have to completely reconfigure it. We will go and put our team in and run the company for like a quarter or two in terms of sales. Yeah, again, I might not be answering your question. Perfectly. But. But it is meant to be, uh, not marketing. We are heavy, heavy in the weeds, uh, in our companies to try to make them, uh, unlock all their potential. And then what I said earlier, too, we don't charge for this. So differ from pretty much every private equity firm where it's another revenue stream for them, where they'll charge either a percent of revenue or a service fee, or it's like pure consulting. This comes out of our management fee. So we are eating the cost coming, uh, from running our firm a blueprint because we think it's in the best spirit of a partnership. Right. Like if you're say, I'll help you, I'll help you, but I'm going to charge you $100,000 a month. That's not really like, in the spirit of things. Right.

Speaker A: Yeah. Have you learned anything from your own build team when it comes to fundraising? Like, if you think about your past few funds.

Speaker B: That's a great question. Um, I'm sure I will be. I learn a, ah, heck of a lot more because frankly, the fundraising kind of rests on mine and Sheldon's shoulders. Right. Our build team likely knows more about our portfolio companies now than I do because they're in it every minute. Right. And the things that they've uncovered and the things they've been able to help with our companies are tactically above and beyond anything I can do. So I'm sure I'm going to be learning about it on the fundraising side, too. Um, because I think that what you're seeing now is that, um, it is not so much about picking great companies. Right. Um, that part is what we're supposed to, but it's like, what can we do after we invest? And that is equally as differentiated as being able to source and pick and win. It's what can we do? And that opens up the market to every kind of business. But not that we're going to change our strategy because every business can be better. You know, can we go and use our team to go and make that every business, but not just highly addictive B2B applications in underserved parts of the market that are anti venture. Right. Um, that's still our bread and butter, but we've thought hard about. Okay, well, maybe the companies we can, uh, generate great, uh, returns from outside of that slipstream. It's always been on our mind.

Speaker A: We're nearing the end of the Raising the Brand interview here, but I actually want to double click on that a little bit. If you think about the fundraising as a first time Manager. Right. You're now in Fund 3. What would you tell an emerging GP fundraising? Now, were there any obvious mistakes you made in the early journey? Now you're.

Speaker B: Yeah, yeah. So many. Uh, but we, I'll leave you with once in the early days of blueprint, we approached fundraising like we do sourcing investments. And what does that mean? We do tens of several tens of thousands of cold outreach and phone calls every year. Right. And we approach fundraising the same way. Now the market's not as big. There are not millions of businesses out there. Millions of LPs, but call it several hundreds of LPs. Right. And we approached our fundraising by cold outbound. Now the problem with that is that there's a subset of those LPs we'd outreach to that are actually a fit for us. We're a fit for them. And so we wasted a lot of time talking to several hundreds of LPs when there's really probably under a hundred that are a, uh, core fit for what we do. So there's what, 80, 90% of our time is wasted talking to investors who are actually uh, where we don't fit for their strategy. Right. And then call it from that core 75 to 100. There's probably only a third that are truly in active capital deployment mode at the time we were raising our fund one. So you go from several hundreds to uh, a small few dozen. And then from a small few dozen there's probably only 5 to 10% of them who are actually willing to invest in a first time fund. You see here you go from way all your time to really a small subset of time. It would have truly helped a lot if we spent all of our time in that one or two dozen names versus talking to several hundred investors who a lot of them were a waste of time for them. Right. That they're. We don't fit for a number of reasons. So I'd say that was probably our biggest mistake is just trying to boil the ocean when we should have been focusing on a couple dozen names and then work them instead of trying to work anyone who'd want to have go on a date with us.

Speaker A: Yeah. So really refining that ideal investor profile.

Speaker B: Exactly, exactly. Mhm. And the second thing real quick is that sure, you know, ah, we thought everyone wanted to get married. Getting married means raising. They didn't invest in us. Right. But it's totally false. Right. Like we thought a first date was like, you know, people would want to get married. They seemed happy and excited. That's not it. Like real Interest is when they are beating down your door and they want to invest. And we always thought that they, uh, want to go on a first date, they want to get married. That's not it. Like you, we know what real interest is like and we, we are just totally enamored with people wanted to take a meeting. Meaning they were interested and they were not.

Speaker A: Yeah, yeah. It's a real process. It's a real sales process. Before we let you go, Bobby, uh, we have one question we ask all participants. What is your favorite brand outside the private markets and why?

Speaker B: It could be anything, right?

Speaker A: Anything. Yeah.

Speaker B: Oh, that's a great question. Favorite brand outside the. Oh my gosh. Favorite. Well, what are my favor things? Right. You know, here, here, here's like, here's one brand I've liked for a long time. And this is like, again, like you're catching me on spot, so you might make fun of my answer. It's a brand called Goodr. These are, uh, Goodr sunglasses. So they're, they're worth $20 now. They're $30. And I'd like, all my life, not that I had like, I would buy some expensive sunglasses, some not so expensive ones, but these ones always stuck because they're multi purpose. Right. They're highly durable. Uh, I don't care if they get trashed and I could just buy a new one. They look great, they're comfortable. I can use them in the water. I can go run with them and play golf them, whatever. And, and like, I use these more than my 500 sunglasses. And it's just, they, it's kind of like blueprint, right. They just stick to their knitting and I love it. I bought probably 50 pairs from them over the years. I don't know. They've done a nice job. I don't know if you know anyone there, but I would say they have raised their price over time. But I'm still going to buy them. Um, they're great. I don't know, I don't know if you have a pair, but I've loved them.

Speaker A: I have a pair and it's in my jacket pocket. I got it at the, uh, NASDAQ SKO in 2024. And, uh, I still carry it around with me. And as you said, it's very durable. It's not broken yet. So I think it's a great, a great shot, Bobby.

Speaker B: And if you sit on them right, not a big deal, you buy another one. I love that. And kudos to them. They've done a really nice job.

Speaker A: Yeah. Okay. We'll tag them in the comments somewhere. Well, thanks very much.

Speaker B: Maybe I'll be a sponsor. Your endorsement? Yeah, endorsement.

Speaker A: Thank you for joining us.

Speaker B: Yeah, thanks so much. I really appreciate it.

Speaker A: Yeah.