VPC Thought Leadership – April 2021

Finding Opportunity in Change: Our Outlook for 2021

CEO and Founder Richard Levy and Senior Partner and Co-founder Brendan Carroll

As we reflect on the last 12 months, we could not have predicted that 2020 would be one of the most active and productive years in VPC’s history. We closed on new deals at an accelerated pace, providing flexible capital solutions for a variety of emerging businesses. We deepened our strategic partnerships with investors and portfolio companies, while onboarding world-class talent. And, in spite of some pandemic-related headwinds, our portfolio continued to perform well. In a year marked by challenges, VPC successfully sourced investment opportunities in an everchanging market environment.

We expect to remain busy in 2021 as we see potential to provide more capital and counsel to growing companies than ever before. Our successful track record makes us an attractive partner for enterprises seeking flexible, non-traditional capital. Experience is always a desirable trait, but even more so in the middle of a pandemic, when the knowledge we have gained over the last 13 years allows us to serve as trusted guides through this challenging time. LPs continue to rely on us to bring our expertise to each investment, and we are proud of the firm’s performance and our pipeline of investment opportunities.

Our team is excited to be at the forefront of the transition from brick and mortar to digital assets across various industries, such as Fintech and e-commerce. We have been an active player in this shift for many years, but the pandemic has accelerated this trend and we are well-positioned to capture the benefits of being ahead of the curve. In 2021, we expect companies to continue to prioritize the transition to digital operations, and we are optimistic about partnering with more businesses that are at the leading edge of this evolution.

We remain attentive to the possibility of inherent risks even in well-performing sectors. VPC’s deeply rooted culture of risk management ensures that we continue to invest wisely, even in the face of potential turbulence. We continue to be flexible in our funding strategies and seek new opportunities – a must in this year’s hypercompetitive environment. For instance, we have successfully raised multiple Special Purpose Acquisition Companies (SPACs), in addition to offering our traditional credit products.

VPC excels at identifying inefficiencies in the credit and equity markets to help businesses grow. In 2021, we look forward to continuing to partner with portfolio companies to create unique capital solutions, while providing the strategic insights and guidance that enterprises require – thereby creating growth and opportunity for all.

Perspective from the CFO

Olibia Stamatoglou, Chief Financial Officer and Chief Compliance Officer

Olibia Stamatoglou is VPC’s Chief Financial Officer and Chief Compliance Officer, overseeing business and fund operations—including finance, compliance and accounting—since 2019. As CFO, Stamatoglou has built on the strong institutional foundation that VPC developed over the last 13 years while supporting the early growth of the digital economy. Given VPC’s rate of growth, having a skilled and experienced CFO is a top priority, which makes Stamatoglou’s extensive experience and reputation—including being recognized by Crain’s as a Notable Women in Finance—an asset to VPC’s leadership team.

How have you helped the firm navigate through the uncertainty of the past year?

I have worked in finance for many years at several excellent firms, helping navigate both good times and bad. From past economic downturns, I learned how to keep moving forward and not divert from the core mission while going through complex periods. As a member of VPC’s Pandemic Response Committee, I worked with executive leadership to ensure that we were methodical in our overall response to Covid-19 across all areas within our business.

Over the last year, the focus has been on the fundamentals of what has made our firm successful, particularly assessing risk and protecting investors. Our Investment Committee ensured that our underlying investments were protected by managing weekly reviews of data and communication with our portfolio companies. Our operations team worked diligently to ensure that year-end investor reporting, audits and tax reporting deadlines were met without missing a beat. The focus and investment that VPC has made in technology over the years has proven to be invaluable. We immediately moved to our business continuity protocol, working from home seamlessly to protect our employees and their families. We are proud of the level of our team’s commitment over this period and are optimistic about the year ahead.

Tell us about your experience before coming to VPC. How did you get to where you are now?

I began my career as a 19-year-old intern at an alternative investments group within a larger asset management firm. By the end of my 12 years there I was leading the day-to-day accounting and financial services team, and the firm was managing $10 billion of alternative investment funds.

From there, I became the CFO of a specialty finance firm. The founders were very entrepreneurial, and they empowered me to help grow the firm into something special. I then moved to a large private equity firm, where I gained valuable experience supporting the CFO and having the opportunity to manage complex situations. Along the way I met Jeff Schneider, VPC’s current Chief Operating Officer. Fast forward a few years to 2019 when Jeff was looking for his replacement as CFO. We met for lunch and here we are today.

What was your first impression of VPC, and what attracted you to the firm?

I had a very positive first impression of VPC’s leadership team. They strive for an environment of collaboration and communication, and they are open to new ideas – all of which are reasons why I was compelled to join the team.

For instance, last summer VPC made it a priority to help combat social injustice. As a result, I am now driving an effort with our HR team to create internships for college students who may not have had access to these opportunities in the past. This is a long-term project, and I am incredibly passionate about helping to make a difference in the lives of the next generation of leaders because I did not have those types of connections when I was coming up in this industry.

Because of VPC’s differentiated offerings and the flexible structure of our products, we value diverse thinking. Our roots are opportunistic, and we are always open to new ideas from our team members that drive value for our firm, portfolio companies and investors. Everyone here is very supportive of the new initiative, which only reinforces that joining VPC was the right decision for me.

What is your perspective on being a successful leader in a male-dominated industry? How has your career shaped the way you view mentorship?

At the first firm I worked for, the CEO was a woman, and so were four out of eight partners. I was very lucky that I had strong female mentors early and throughout my career, as it showed me what an incredible career path I could have in this industry. That experience taught me to be confident and to demand my seat at the table while conducting business. It is important to me to be true to who I am and serve as a role model for younger women and all professionals in the industry.

That said, I have had to combat stereotypes from over the course of my career, like being called emotional when being direct, or aggressive when demanding specific actions. Overcoming those obstacles, focusing on results and working at firms like VPC – where I am treated professionally and supported by a strong culture built on respect – have helped me be successful in my role today.

Investor Demand in Fintech Poised to Continue

Gordon Watson, Partner

While VPC has been an active investor in digital businesses since its inception, the recent acceleration provides a compelling growth trajectory that is expected to persist following the pandemic. Over the last five years, there has been a significant shift from investment in physical to digital assets, as increased spending on R&D is driving innovation, creating more secure digital platforms for businesses and consumers. The pandemic has accelerated the adoption of these technologies, aiding businesses and consumers around the world who have a significant need for digital solutions to support both professional and personal needs.

At the same time, market dynamics have created pent up demand for liquidity, particularly within the mid-cap Fintech universe, and investor demand for high-growth companies and stocks. The number of public companies in the US declined by approximately 50% over the last two decades, partially driven by the significant availability of late-stage private capital and delayed IPOs.1 SPACs continue to be increasingly popular vehicles for private businesses seeking to raise capital, monetize unrealized equity value and become publicly traded. Attractive value proposition has driven record SPAC IPOs and business combinations – in 2020, SPAC IPOs represented 63% of all US IPOs.2

As an established investor in digital businesses, we have an expansive global reach to activate when we identify increasing market opportunities and investor demand. We continue to seek opportunities to evolve our investment strategy and have raised three Fintech-focused SPACs in the past six months to capitalize on shifting market dynamics. One of which, VPC Impact Acquisition Holdings, recently announced a definitive agreement to acquire Bakkt Holdings, LLC, a provider of institutional and retail solutions for digital assets. As actively engaged investors in the Fintech sector, we look forward to continuing to partner with world-class management teams.

  1. Source: Center for Research in Security Prices at University of Chicago’s Booth School of Business
  2. Source: Bloomberg