[Venture Capital Series] How Important Are Core Values When Investing in a Company? With David Mann & Derrick Smith of The Firefly Group LLC

David Mann and Derrick Smith are Partners at The Firefly Group. They invest in growth-oriented, lower middle market companies that include US-based companies with EBITDA of at least a million dollars.

Before co-founding The Firefly Group, David Mann co-founded Spring Mill Venture Partners, a venture capital firm. He previously worked with ServiceMaster Ventures and served as a founding member of the ServiceMaster home Service Center. David began his career as an Officer of the US Navy. He got his MBA from Harvard and is an Adjunct Faculty at the Indiana University, Kelley School of Business.

Derrick Smith led the launch of a family office where he served as managing director before co-founding The Firefly Group. He began his career with CHV Capital, the healthcare venture capital arm of the Indiana University Health. He also helped start and led Indiana University’s Health International and Management Company while at CHV Capital. He earned his MBA from Indiana University, Kelley School of Business, and serves as an executive business advisor at Rise Sports Advisors.

 

Here’s a glimpse of what you’ll learn:

• How did The Firefly Group start and why are core values very important for their company?
• The core values that influence David Mann and Derrick Smith’s investment decisions
• David and Derrick talk about growing up, what they wanted to be, and how they ended up in their current careers
• How the Entrepreneur Operating System (EOS) weaves into The Firefly Group journey
• What the types of companies does The Firefly Group invest in?
• David and Derrick explain how and why they use the Firefly culture index and Kolbe to assess key hires for their company
• The struggles entrepreneurs have had to push through in 2020 and how they have helped some of them navigate through these challenges
• David and Derrick share some of their favorite navigating acquisition stories

In this episode…

As an entrepreneur, your business’s geography, EBITDA, operating profile, and industry can potentially attract many venture capitalists. But if you want a strategic growth partner who will bring more than just money to your business, you have to have your core values identified and you need to be applying them in each step of your company’s growth.

According to David Mann and Derrick Smith, your core values may be the reason an investor will pass on your company. It’s such a crucial and fundamental part of your company culture and it’s worth investing time in. But why is it so important and how can you flesh one out to help direct your company’s growth?

Listen to this episode of the Inspired Insider Podcast with Dr. Jeremy Weisz as he hosts David Mann and Derrick Smith, Partners at The Firefly Group, to talk about core values and the role they play in attracting potential investors in your company. They’ll be discussing Firefly Group’s investment criteria, the story of how they invested in EOS Worldwide, and how David and Derrick assess key hires for their company. Stay tuned.

Resources Mentioned in this episode

• The Firefly Group LLC
• David Mann on LinkedIn
• Derrick Smith on LinkedIn
• Mark Sneider on LinkedIn
• Gino Wickman on LinkedIn

Special Mentions:

• Kyle Salyers on LinkedIn
• Matthew Neff on LinkedIn
• Roger Staubach on LinkedIn

Books Mentioned: 

• Traction: Get A Grip On Your Business by Gino Wickman

Related Episodes: 

• Nolan Bushnell on Inspired Insider
• Dan Zawacki on Inspired Insider
• Gino Wickman on Inspired Insider

 

Episode Transcript

Jeremy Weisz

Dr. Jeremy Weisz here, Founder of InspiredInsider.com where I talk with inspirational entrepreneurs and leaders. Some of you’ve heard of some you’ve you’ve never heard of, you know, it’s funny. I had, you know, David and Derrick, I had Nolan Bushnell who started Atari and his men. You know, he was a mentor of Steve Jobs. And in the interview he talks about Steve Jobs offered him 33% of Apple for $50,000. And why he said no, so I want to hear your guys maybe, Steve, are, you know, the Nolan Bushnell story of something like I can’t believe it passed on that. Another episode with Dan Zawacki, big thank you for introducing me to The Firefly Group. Dan Zawacki, you know, founded a LobsterGram and they delivered live lobsters and seafood around the country, which was groundbait, breaking in the 80s and was the first person in the world to do it. He was featured on Forbes, The Wall Street Journal, journal, Oprah, and many more media outlets for what he did. And now he runs 4Mores, which he helps organizations implement EOS. I have that Gino Wickman on before talking about EOS as well. And that was a great episode. Before I tell you about today’s really, rockstar guests, this episode’s brought to you by Rise25. Rise25 I co-founded with my business partner John Corcoran. And we help businesses give to their best relationships by helping them run their podcast you know, for me, you know, Dave, and Derrick, for me, you know, relationships are the number one thing in my life and I’m always looking at a way to give to my best relationships, profiling their company, their thought leadership, and over since 2008, the podcast has been the best way that has allowed me to profile many amazing people. And so if you are a company out there, you’re thinking of, you know, gaining authority, you know, increasing your content marketing, all the other benefits. Go to Rise25.com. Email us and we’re happy to answer any questions. Today’s guests I’m excited about. We have David Mann and Derrick Smith are partners at The Firefly Group and they invest in growth-oriented, lower middle market companies. And we’re going to talk about why they invest in certain companies and why some they don’t and they have criteria of investing. In kind of broadly speaking, you guys correct me if I’m wrong, US-based companies with EBITDA of at least a million dollars. And they have to have good systems in place like EOS, and they invest in franchises and many more. David Mann prior to co-founding The Firefly Group Co-founded Spring Mill Venture Partners, which is a venture capital firm. And he worked with ServiceMaster Ventures and served as a founding member of the ServiceMaster home Service Center, which was interesting, David to me, I’ll have you talked about it but a joint venture between Kleiner Perkins and ServiceMaster. And he’s such a slacker. He began his career as an officer of the US Navy and he got his MBA at Harvard and is an Adjunct Faculty at the Indiana University, Kelley School of Business and Derrick Smith, prior to co-founding The Firefly Group led the launch of a family office. He served as Managing Director and he began his career with CHV Capital and helped start and lead Indiana University’s Health International and Management Company. Thanks both for joining me. Yeah.

David Mann

Thanks for having us. It’s great to be on.

Jeremy Weisz

So I figured you would start on how the team came together.

David Mann

Yeah, let’s do that. I think Derrick tells that story really well. So Derrick, if I’m putting you on the spot here, but please tell that story.

Derrick Smith

Happy to Jeremy. Thanks for having us on. We’re honored to be on here and to have the opportunity to tell our story. So the three of us at The Firefly Group, we all have a passion around family owned businesses, serving people and growing businesses and growing people. The way that we started the business, David and Mark, were classmates at Harvard. They did a variety of things over the years and then found their passion and this niche family owned, privately held small to medium sized businesses. I was doing venture healthcare, venture capital, love the work, and then I found a passion in this same area. I got to meet David. Around that time. David and Mark had had started looking at some opportunities. I had started looking at some opportunities I recruited former colleague at Indy In a University Health where I was doing venture work to come work with me, David and Mark, were doing the same thing. And David had the vision. He’s our visionary. I’m our integrator. That’s EOS talk. For those of you out there that know that or use EOS to operate your company, David had the vision to bring us together. And I think the reason he did was number one, the values alignment, we are maniacal about a set of core values that help define how we act and what we do. And so we have this common set of core values. And then there’s a variety of skill sets. I don’t know what assessments you’ve taken, Jeremy, but all variety of them out there. Be? I mean, you need over Yeah, exactly. Yeah. You look at our Kolbe, you look at our desk, you look at our culture index, predictive index assessment scores, you’ll see why the personality traits of each of us the behavioral characteristics fit really well. David and I are more quick start, let’s jump in big vision. see the good in everything mark. And drew MC Houston, who was a co founder as well and has moved on to become CFO at POS are much more data driven, fact driven, slow, and that’s good. That’s a really good balance. And so the combination of core values personality fit, and a shared passion. David saw that and had the vision to bring us together.

Jeremy Weisz

I want to talk about you mentioned core values. And I want to hear about your core core values. But you know, before we hit record, David, we are talking about I was asking, what’s been a deal that everything on the surface looked amazing. It kind of got through different passes in your company, and then you passed on it. For whatever reason?