Carving Out an 8x MOIC in 3 Years
Doug Song reflects on 25 years of experience as an independent sponsor, having co-founded Prodos Capital in 2003. He explains how Prodos views co-sponsoring as a strategic path to scale, enabling experienced sponsors to take on more deals while supporting emerging talent. Doug also discusses the growing role of capital placement agents and family offices, and emphasizes why getting the first deal right is the single most important step in building a lasting independent sponsor career.
Doug’s first deal as an independent sponsor set the tone for everything that followed. It was a carveout of Flex, a century-old brand known for its stone and masonry equipment, from Black & Decker. With a partner who had previously led the division and a one-stop capital stack, Doug was able to close the deal in under 60 days. Over the next 3 years, Prodos grew the business and ultimately exited at an 8x MOIC, creating the foundation for future momentum.
With 6 portfolio companies and a lean 3-person team, Prodos uses co-sponsoring as a strategic way to scale. Doug sees it as an efficient way to do more without compromising on quality. Co-sponsoring enables emerging sponsors to learn by doing while giving experienced teams like Prodos valuable execution support. For Doug, it is also a way to invest in the independent sponsor ecosystem by mentoring and partnering with the next generation of dealmakers.
Doug also shares his views on today’s evolving capital landscape. He notes a growing presence of capital placement agents helping independent sponsors raise equity and debt, particularly for large or complex deals. At the same time, he offers a tempered view of family offices. While many express interest in the asset class, few have the internal commitment or diligence capacity to follow through. His advice is to always bring in multiple family offices per deal to reduce concentration risk.
For first-time sponsors, Doug says getting the first deal right is everything. He advises yielding up to 50% of the economics if needed to close with a credible partner. The long-term reputation and deal flow that follow are worth far more than holding out for better terms.
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