5 Questions with Lateral Investment's Richard de Silva

August 22, 2025

Lateral Investment Management | Dakota Take 5

7:22

Welcome to Dakota Take 5, a new Q&A series that introduces our readers to investment firms shaping today’s private markets landscape. In each installment we pose five questions to a firm’s leadership, uncovering the origin of their strategy, the principles behind their decision-making, and the themes they see ahead.

We’re kicking things off with Richard de Silva of Lateral Investment Management, a growth-capital partner focused on founder-led, lower middle-market businesses. Read on for their perspective on investment philosophy, portfolio support, and the opportunities they believe will matter most in the years to come.

Are you part of an investment firm that would like to be spotlighted? Send a brief overview of your strategy to swilson@dakota.com and we’ll be in touch.

Lateral Investment Management

1. Lateral Investment Management was launched to provide growth capital to founder-led, lower middle market businesses. Can you share the firm’s origin story, your background, and the market gap you set out to address?

We started Lateral to do one thing really well: be the first institutional partner to independent, owner-operated middle-market businesses. We back profitable, bootstrapped companies that bigger buyout firms often overlook and help them scale into category leaders. Before Lateral, I was a Managing Director at Highland Capital Partners, a global venture and growth equity firm with $7B raised and 300+ investments. There I led growth and buyout investments in technology and business services—experience that directly shaped Lateral’s strategy. Earlier in my career, I co-founded IronPlanet, the online marketplace for heavy equipment, which Ritchie Bros. (NYSE: RBA) acquired for $780 million.

2. You describe your approach as “First Institutional” growth capital. How does that differ from traditional buyout funding, and why is it a fit for the companies you back?

Our “first institutional” investment approach involves making majority control investments while maintaining a partnership approach with founders. Unlike traditional buyouts that often replace management, we work alongside our founders who want a value-added institutional partner to help them expand and accelerate their vision. This approach recognizes that these entrepreneurs know their markets and customers better than any outside investor but can leverage Lateral’s expertise in transforming services companies into product-based businesses and scaling established and profitable platforms focused on a niche into market leaders.

3. Lateral prefers to invest in “PANTHER” companies rather than chase “unicorns.” What defines a PANTHER, and why do you believe this profile offers attractive, risk-adjusted returns?

Lateral focuses on businesses that are ambitious, yet grounded in sensible and profitable business models. We call these companies “PANTHERs”.

- Proven unit economics that are scalable, repeatable and enduring
- Annual recurring revenue with a track record of loyal and happy customers
- Non-sponsored ownership – no prior institutional investment
- Transformational growth to accelerating and discontinuous increase in top-line and operating leverage
- Hurdles we can help with – limited risk facts that lateral can manage and help address
- Extraordinary advantages across market opportunity, product and people
- Reach to effect change beyond financial success to achieve meaningful social and environmental milestones

We avoid speculative startups that seek to invent new markets or companies that have been bought and sold by multiple private equity owners. Our focus on “PANTHERs” is deliberately intended to contrast with “Unicorns,” the term coined for high-risk venture capital backed startups that are valued at over $1 billion.

The “PANTHER” companies we invest in take a conservative approach to risk and look for high probability outcomes. We help “PANTHERs” embrace challenges, navigate transformational growth, and achieve sustainable profitability.

4. Within your core sectors—B2B software, industrial technology, managed solutions, and tech-enabled services—what market dynamics are creating the most compelling opportunities right now?

We continue to see strong market dynamics around technology-enabled business services in key niche categories ripe for agentic AI transformations where there are large amounts of datasets that can be better organized to streamline transaction costs and automate and optimize workflows. We are finding established and profitable businesses that are great platforms for transforming into software and software-based managed solutions. In particular, we are excited about vertical ERP opportunities in niche transaction verticals which are underserved by the legacy horizontal platforms. We think cybersecurity solutions need to be repackaged for middle market companies which are getting disrupted and breached by bad actors but cannot afford the muti-million dollar fixed cost structures required by best-in-class cybersecurity vendors. And across all of these sub-sector thesis areas we find that our proprietary originations engine shines in this kind of environment where macro turbulence disrupts banking intermediaries and limits economic visibility.

5. Beyond capital, what strategic resources and operating support does Lateral provide to help founders scale responsibly and build durable, long-term value?

Capital alone doesn’t build enduring companies — partnership does. That’s why we work alongside exceptional operating partners who bring deep domain expertise, tech-forward insights, and decades of hands-on leadership experience to help support management teams.

Richard de Silva

Richard de Silva is the Founder, Managing Partner and Chair of the Investment Committee at Lateral Investment Management, LLC. With 27 years of experience in the industry, Mr. de Silva launched Lateral with a strategy to allocate first institutional growth capital to independent, owner-operated middle market businesses underserved by typical buyout firms. Under his leadership, the firm has a highly differentiated track record of turning successful, profitable companies into market leaders.

Prior to Lateral, Mr. De Silva served as a Managing Director at Highland Capital Partners, a global venture capital and growth equity firm that has raised $7 billion in committed capital and invested in more than 300 companies including 50 IPOs, 40 Unicorns and leading companies such as Lululemon, VistaPrint, FastClick, Qihoo 360, New York Times Digital, and CheckFree. At Highland, Richard focused on first institutional growth and buyout investments in leading technology and business services companies.

Mr. de Silva co-founded IronPlanet, a marketplace for construction equipment, which was sold to Ritchie Brothers (NYSE:RBA) for nearly $800 million. He worked as a strategy consultant in the media and technology practice of Oliver Wyman Consulting.

Mr. de Silva received an MBA from Harvard Business School, an MPhil from the University of Cambridge, and an AB from Harvard College.

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