Behind The Scenes at Minds Capital: Building an Equity Fund for Independent Sponsors
Celebrating 25 episodes, the founders of Minds Capital pull back the curtain on lessons from deploying Fund 1 capital, why they're bullish on US private equity, how they evaluate deals and sponsors, and the strategy taking shape for their upcoming Flagship 2 fund.
After 15 months, Minds Capital Fund 1 has invested in 13 deals, committed to 3 more, and have several investment opportunities currently in "Partner Review." More than 90% of the capital has been deployed in deals from independent sponsors (vs. searchers). A few early deals were lost at the commitment stage because decisions took too long, pushing us to improve our processes & operations. Building repeat relationships with sponsors is a core focus, creating a flywheel effect.
Once equipped with an Investment Memo, a QoE report, and a pro forma model, Minds Capital uses a checklist with 80-90 items to vet each investment opportunity across four sections (market, target company, sponsor, and deal terms). This uncovers red & yellow flags, and also highlights a deal's strongpoints. The best base cases are those that constitute a continuation of the company's history and the sponsor's track record, as opposed to a thesis that includes too many variables. Finally, the partners at Minds Capital ask: "Is this the best deal in our pipeline right now," force-ranking the opportunities to avoid the "good enough" fallacy.
The team sees multiple macro tailwinds for US private equity. Recent tax changes accelerate depreciation, spurring CAPEX investment, while AI and data center growth add structural demand. Tariffs, for all their controversy, will in the near-term repatriate investment and enhance competitiveness of US-based companies. Productivity gains from AI, especially pushed by US companies, further strengthen the outlook. So, Minds Capital is long on US (private) equity, backed by historical evidence from established lower middle market investors achieving more than 3x MOIC.
With Fund 1 expected to be fully deployed by late fall, Minds' robust deal flow will continue uninterrupted into Flagship 2. The new fund will target the same types of opportunities, but with larger commitments of $1 to $3 million per platform. While Minds remains committed to its strong base of retail investors, SEC regulations cap participation at 99 investors per vehicle, prompting a minimum investment of $200,000 for Flagship 2.
Keep reading
A Portfolio Marked Up at 10x MOIC
Stenning Schueppert, based in Austin, leads Evolution Strategy Partners, one of the most transparent and high-performing independent sponsors west of the Mississippi. A private equity veteran and zinger machine, Stenning shares refreshing insights on why the independent sponsor model beats traditional funds, how radical alignment drives better outcomes, and the simple math behind his portfolio's 10x MOIC markup.
Combining 2 Platforms to Reach $20m EBITDA
Zack Miller and his high school friend Johnny Lieberman combined their distinct backgrounds to launch Worklyn Partners, a dual platform marrying the VC-style upside of cybersecurity with the proven PE roll-up playbook in managed service providers (MSPs). Backed by $50m in committed capital, they have executed 7 acquisitions, keeping their IT services and cybersecurity businesses operationally separate, preserving the flexibility to merge or exit individually.
24 Add-Ons in 24 Months
Luis Reyes, an exited SaaS founder, is building a fire safety market leader in Spain through full-time focus on operations and rapid M&A with 24+ acquisitions in just 24 months. Assembling a mosaic of micro-targets, the platform now generates €8m in EBITDA, with industry-leading efficiency stemming from Luis' consulting background and AI-first mindset. Fun fact (or maybe not so fun...): Luis grew up in rural Mexico and got his first pair of shoes at age 5.
