Key Findings from 2022
In 2023, all of DWP Capital’s Deals will be proprietarily sourced. This decision came after analyzing 500 deals in 2022. Here were the 3 key learnings Paul presented to his investors at their annual Limited Partners dinner.
Network-based sourcing and network-based referrals are just about worthless.
“Grata changed the game.” According to Paul, “After DWP started using Grata, we knew we were going to be a completely outbound shop. We weren't going to work on relationships with other investors and or connectors. Frankly, I feel like the connectors, the lawyers and the bankers, have been calling it in for the last two years.”
An abundance of capital has created an abundance of waste.
“There are still good companies out there, but it's hard to find good companies because they're surrounded by mediocre companies. These companies wanted to be big businesses, but at the end of the day, their capabilities were bought in a really great environment and now the economy's contracting. Their novelty will wear off and there is going to be a churn tsunami,” said Paul.
“Investing is f*cking hard.” -Bill Gurley, Benchmark
The statement speaks for itself, but Paul added, “Anybody can write a check. Everyone wants to get that founder high. They want to work with founders and pretend like they're adding value. Where the rubber meets the road is sourcing. Nobody talks about sourcing and how important it is.”
