Nextgen Growth Partners

NextGen Growth Partners is a private equity firm that employs an entrepreneurship through acquisition (ETA) model. The firm actively partners with entrepreneurial talent to identify, acquire, and subsequently operate lower middle market businesses. Their core approach integrates financial capital with hands-on operational expertise, aiming to enhance the value and performance of established companies through strategic management and robust operational improvements.

NextGen Growth Partners was established with the vision of bridging the gap between investment capital and capable operational leadership. Brian O'Connor, a Managing Partner, has been instrumental in shaping the firm's direction, founded on the insight that combining entrepreneurial drive with strategic investment can unlock significant potential within existing businesses. This model empowers experienced professionals to directly lead and transform companies, guiding them through periods of growth and transition.

The firm primarily serves lower middle market businesses seeking growth capital, operational enhancements, or succession solutions, as well as entrepreneurs eager to take on leadership roles within established enterprises. NextGen Growth Partners envisions fostering sustainable, high-performing companies by empowering talented individuals to drive long-term value creation. Their focus remains on building enduring businesses that achieve sustained success through dedicated management.

High-Level Overview

NextGen Growth Partners (NGP) is a Chicago-based private equity firm founded in 2016, specializing in partnering with family- and founder-owned businesses in the lower middle market for growth and succession planning.[1][5][6] The firm's mission centers on providing flexible operational transitions by deploying Entrepreneurs-in-Residence (EIRs) who assume full-time leadership roles post-acquisition, enabling owners to exit while preserving legacy and driving long-term value through professionalization and expansion.[2][3][5] NGP's investment philosophy emphasizes mission-critical B2B services with recurring revenue, including facilities services (e.g., landscaping, HVAC), niche contracting, professional/technical services, and business process outsourcing, targeting companies with $5M–$50M revenue and $2M–$8M+ EBITDA.[6] Having closed Fund III at $165M+ (as of early 2025) after prior funds around $50M–$100M, NGP influences the startup and small business ecosystem by countering traditional PE stigmas through operator-led continuity, fostering growth in fragmented, resilient sectors.[1][3][7]

Origin Story

NGP was founded in 2016 in Chicago by Brian O'Connor (Founder and Managing Partner), rooted in the belief that small businesses hold untapped potential unlockable through trusted partnerships rather than disruptive takeovers.[5][7] Early backers provided capital, guidance, and relationships that shaped its operator-focused model, evolving from a debut $50M fund (closed ~2018) to a second ~$100M fund (~2021) and the recent $165M+ Fund III (2024–2025).[1][3][7] Key partners include Eric Wilson (Partner and Head of Portfolio Operations) and advisors like Jim Bland, alongside a network of EIRs who transition into CEO roles.[1][7] The firm's focus sharpened on "entrepreneurship through acquisition," building a BUILD process (Build relationship, Understand & add value, etc.) to humanize transitions for owners facing succession needs.[5] Pivotal early traction came from deals like Condata (2018) and DAWGS (2019), expanding to 12+ transactions by 2025, including Premier Property Services (Feb 2025).[1]

Core Differentiators

NGP stands out in private equity through its hands-on, legacy-preserving approach:

• Unique Investment Model: Deploys EIRs as full-time operators post-close for seamless succession, blending financial liquidity with operational continuity—unlike traditional PE's short-term flips.[1][2][3]
• Network Strength: Leverages advisors, interns, and co-investors (e.g., board members) for strategy, deal evaluation, and growth; fully committed capital ensures swift closings with conservative leverage from trusted lenders.[3][5]
• Track Record: 12+ deals since 2018 in target sectors, from JMG Marketing (2019) to recent wins like MWH and Westcoast Landscape (2023); three funds closed, with Fund III at $165M+ actively deploying.[1][7]
• Operating Support: Provides playbooks for professionalization, add-ons, and scaling in fragmented markets; emphasizes humility, collaboration, and risk minimization via owner-level relationships.[3][5][6]

Role in the Broader Tech Landscape

NGP rides the wave of "search funds" and entrepreneurship through acquisition (ETA), a growing trend addressing the "silver tsunami" of baby boomer retirements in family-owned businesses, where 70%+ lack succession plans amid fragmented lower middle markets.[3][5] Timing aligns with resilient B2B services demand—recession-proof due to recurring needs in facilities, infrastructure, and compliance—fueled by urbanization, regulatory pressures, and outsourcing shifts.[6] Market forces like PE dry powder ($2T+ globally) favor operator-led models over pure financial engineering, positioning NGP to consolidate niches with high barriers (relationships, expertise).[1][4] The firm influences the ecosystem by normalizing patient capital for non-tech SMBs, mentoring EIRs into CEOs, and enabling add-on M&A, thus professionalizing sectors often overlooked by VC/PE giants.[2][5]

Quick Take & Future Outlook

NGP's operator-centric model positions it for scaled impact from Fund III, likely pursuing 5–10 deals in core B2B services amid ongoing succession waves and economic cycles favoring essentials.[1][6] Trends like AI-driven efficiency in facilities/professional services and infrastructure spending (e.g., U.S. IIJA) will amplify growth, with EIR networks enabling faster add-ons and exits. Influence may evolve toward larger funds or sector roll-ups, solidifying NGP as a go-to for legacy-preserving PE—unlocking value in businesses much like its founding vision promised.[5][7]