A View From the Outside In

Kim Cobb - Little gg Capital and Encompass Business Solutions.  Family Friend, Investor, and Maevlo Advisory Board Member

When it comes to investing, the biggest risk you'll ever face is the people, the "who," if you will. If you're not investing with good people, you're likely to get burned. Because, no matter how "good" the deal is, it's the character that counts most when important decisions are made. But, if you really know someone, trust their integrity, and even better, if you have a history with their family, and things don't work out perfectly now and then, you'll stick with them. And when they get it right (which good folks tend to do), it's all the more fun to win together. Now, finding people like this in a world of slick salesmen and greed is a problem that investors of goodwill have always faced. At Little gg Capital, we underwrite people first and foremost. We look for honesty, integrity, a high degree of relationality, and, we might even say, a bit of courage to take the risk of trying new things. A lot of people will boast of these qualities, but in Matthew Montgomery, we've found someone who lives them out day to day.

We first connected with Matthew through his father, Mike, whom we've known, worked shoulder to shoulder with, and invested with for decades. After years of avoiding the energy sector, as it was outside our skill set of manufacturing and commercial business, and we generally avoid investing in things we don't understand well, we decided that we just couldn't ignore it anymore. Initially, we struck out a few times looking for good people to work with. We could find people with tons of experience and industry connections, but the chemistry was never there. People weren't interested in having much of a relationship with their investors; you'd invest and not hear from them for two years. So when we mentioned the problem to Mike, he told us about what his son was up to, and we got in touch. As you probably have experienced as well, we found Matthew to be as likable, knowledgeable, and transparent as you could ever hope a fund manager to be. Beyond that, before we had even invested a dollar with him, he helped us wrap our heads around some issues with one of our early oil and gas deals that were causing us headaches. Matthew generously bridged that knowledge gap for us in the energy sector, which gave us the comfort to jump into this exciting and profitable industry.

So we invested a small amount in Maevlo Fund II. After that, he invited us further in to be GPs in Fund III, and we invested much more heavily in that one. Since day one, we've not looked back. Matthew has delivered on what he said he'd do. He has communicated well (something seriously lacking in our first energy investment). His enthusiasm and creativity make him fun to work with, and we quickly came to consider him a friend, a role that he takes seriously in his upbeat way. He has even stepped in alongside us to advise on underwriting other deals we were looking at that he had nothing to do with. How many fund managers do you know who do that?

It's been great to watch him mature from an excellent landman into a dynamic businessman and fund manager. He's pulled in good people to support him where he needs help. This means that not only is he trustworthy, but he also finds good folks and trusts them. To illustrate the point, not only has he allowed us deeper in as GPs in his funds, but he has brought us into the heart of his operations through our accounting and back-office service line (Encompass Business Solutions). At EBS, we've taken our experience building Corsicana Bedding from a tiny outfit to a nationwide manufacturing business and now offer it to our clients as a whole suite of back-office support. We start with accounting and bookkeeping support, but through that, we help businesses see what their numbers tell them about what they are doing well and where they can grow. So, in an industry where you can be as opaque as you want to be, Matthew has given one of his LP/GP investors the keys to the books and the invitation to provide support and discernment. That's what true integrity and transparency look like.

We're grateful to be considered a friend of Matthew's, and we're developing plans to work with him in the future on ventures beyond the Oil and Gas sphere. You know Matthew; he's always got another good idea boiling away in the kitchen.