How Operational Experience Guides Our Investments

The toolbox of traditional investors is limited — with a sole focus on maximizing returns, investors tend to rely on only two tools: cutting costs and changing management. For entrepreneurs who have made every sacrifice to build their businesses, this process can be utterly heartbreaking. In addition, it does not maximize the potential of a business’s growth, particularly for businesses within the technology sector. After struggling to see eye to eye with investors again and again in the technology companies I founded, I launched Black Dragon Capital with a unique approach for growing our portfolio companies.

Black Dragon Capital implements an operationally led model to leverage our own experience to build market-leading companies that reshape the global landscape for digital technology while harnessing the joy and commitment of fellow entrepreneurs. Our model is executed through our proprietary Black Dragon Toolkit℠ comprised of time-tested tools for operating and growing companies.

We understand what goes into building a company.

Black Dragon Capital was born out of my own experience as an entrepreneur and operator working with traditional investors. I imagined a new kind of private equity firm that combined incredible operating expertise with sophisticated investment capabilities. From there, I built a team with deep domain expertise and a track record of transforming companies to high-growth market leaders. Along with a high caliber of experience, I emphasized diversity among our team. Seventy-five percent of all Black Dragon Capital employees are diverse and ~50% of our portfolio company top executive teams are diverse. This makeup facilitates a unique understanding of the markets and the people we invest in, so we can connect in a more authentic way with entrepreneurs who face many of the same challenges that our own team has experienced.

We leverage operational experience to fortify leadership within our portfolio companies.

Our investments are focused in the sectors we truly know and understand. These are growth technology sectors that are undergoing accelerated digitization creating operational and economic opportunities, such as digital commerce, sports and media technology, financial services technology, and digital payments. Thanks to a depth of operational experience in these areas, we are capable of identifying disruptive growth opportunities that others may not be able to comprehend. That’s why we take control positions in the companies we invest in. From these positions, we can accelerate growth and improve operating performance while separating salient issues from all the noise that inevitably accompanies the journey of building a company.

We’ve developed a proven methodology that converts our investments into market leaders.

Our operational toolkit was developed to guide entrepreneurs through digital disruption in their industries and to ultimately take advantage of that disruption to become market leaders. It has been built through decades of my own experience that includes launching several technology companies, operating billion-dollar organizations, and advising some of the largest companies in the world. The Black Dragon Toolkit℠ is comprised of three primary tools:

• Black Dragon Leadership Index™ — This is a guidepost for hiring the most qualified and effective leaders at each position based on a portfolio company’s stage of development and culture.
• The Black Dragon Way™ — This is a set of values and ideas that shape high-growth, high-performance, and accountable company cultures.
• The Black Dragon Playbook™ — This is a set of guidelines that have been time-tested through real-world application. These guidelines create market-leading software companies as more industries become digitized.

In all our portfolio companies, including Grass Valley, Naveo, and our early stage entities like Digital Joy, we work closely with our leaders to help build market-leading companies that outperform their peers over time and solve their industries’ more significant challenges. We have realized fantastic returns and value creation across our portfolio thanks to this operationally led model.

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Louis Hernandez Jr. is the Founder & CEO of Black Dragon Capital, a minority-led investment capital company focused on software and technology. With a commitment to supporting future leaders, Hernandez is also Founder of the non-profit organization, For a Bright Future.

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