Real Growth Partners for Founders: Serent Capital’s Stewart Lynn

In this episode, we speak with Stuart Lynn, partner at Seren Capital, a growth-focused private equity firm that partners with founder-led B2B software and technology companies. Founded in 2008, Seren has partnered with leadership teams at more than 100 software and technology-enabled services companies, and today the firm has more than $7 billion in assets under management. Stuart leads software investments across verticals, including real estate, transportation, gufftech, and entertainment. Since joining the firm in 2013, he has spearheaded numerous investments in supported executive teams on growth initiatives spanning strategy, GDM scaling, pricing, and M&A. Prior to Seren, he was a vice president at Seabury Group and consulted at Bain & Company. Seren was recognized as a top private equity firm of 2026 and top growth equity firm of 2025 by GrowthCap. I'm your host, RJ Lumber. We hope you enjoy the show. If you like the episode, click to follow. RJ Lumber is the managing partner of GrowthCap in the executive chairman of Market Insight Media. He is the host of Growth Investor, a podcast featuring today's best investors, executives and founders. In the minutes ahead, we'll uncover insights and strategies for accelerating growth and succeeding in business. Stu, great to be with you. Thanks for taking the time. Thanks, RJ. Great to be with you as well. So it's been a few years since we had Seren on. Kevin was a guest back in 2023. You have some recent news in that you closed fund six, which was over subscribed. Maybe to kick off, tell us about that capital that you were able to raise, the demand that you saw from institutional investors. It's not an easy fundraising environment, but yet Seren was able to achieve that fund close. So tell us about why you think it is that Seren stands out in the market. It operates in. Yeah, look, we're really proud and grateful for the LPs that have continued to support us. At the end of the day, they're looking for both results, historical looking, but also a strategy that they believe in, and the belief is going to adapt in today's ever changing world. And our fund six, fundraise, you know, we almost need to pinch ourselves. It's a lot of work, but we were really excited and pleased with the level of support and reapprates that we had from our existing LPs. Seren is on our fund six. We generally had a pretty stable set of LPs over the last 20 years, as we were founded back in 2008. And I think the reason why LPs continue to believe in Seren comes down to our strategy. It's really that we focus on working with great founder own businesses, a great product market spits, and help those companies scale with a set of really engaged operational resources. But I also think there's a belief nowadays that great companies need that outside support and resources more than ever, particularly in the world of AI. And we're working only with founder own companies that are all over the US and middle America, where AI is certainly top of mind, but they may not have as much exposure to the latest tools, technologies, resources, and so these founder own companies can benefit from both the injection of great talent and some of the pattern recognition we're seeing in Silicon Valley down in Austin, Texas, that we can bring to these younger companies to the health and scale. I'm curious. Has your lens narrowed in terms of who you consider backable? What types of companies you consider backable? Because of AI and the impact it's having. So from the kind of institutional investors perspective in your firm, is there that kind of added layer of analysis? Like, how has your market changed as a result of AI? Yeah, that's a great question. Actually, I don't think it's narrowed. If anything, it's broadens. I think in this day and age, she's got to be open-minded that the check-the-box profile of companies in the past, you know, one might not be successful on Ford and two, that there's a great set of companies that are getting created every day, that are very different than what looked like five or 10 years ago. You know, just for context, Sarah doesn't only do SaaS. We do services, particularly healthcare services, and a lot of the founding of Sarah's was on the backbone of some of our services and tech-enabled service success. And so we've always had a little bit of an openness to look at different business models. I think nowadays, more than ever, we're sort of looking at software, but we're looking at smaller AI native, high-growth companies. We're looking at service companies that, you know, tech-enabled service companies that can be transformed through AI. And ultimately, what we go back to is, one, is this company offering a differentiated product that customers love? And two, what are the level of modes and IP that are going to persist going forward? And the world of AI, things have absolutely changed. Those modes are changing, for example. But at the same time, the ability to build great products that customers love has also changed and is now more accelerated than ever. So I would say our aperture is as broad as it's ever been. But there's a new set of analysis as we think about trying to forecast out industries or companies two or three years and just given the rate of technological change that we're very attuned to. And if you were to project out, you know, three to five years, how would you break out your portfolio in terms of exposure to different segments, whether that be healthcare services versus software, versus maybe AI-forward leaning companies? Yeah, it's a great question. The answer is I don't know, figuring it out. I have to guess. Look, I think vertical SaaS, I'm system of record SaaS with great data modes, sort of sticky workflows, maybe more niche smaller teams that are insulated from some of the major capital that's pouring into other horizontal industries. I think vertical SaaS system of record SaaS will continue to be a core part of what we do. We're big believers and we're seeing within the portfolio performance and we're seeing an asset we continue to look at. AI-native companies we are leaning into and we've got a couple of those. But again, we want to make sure that we're not overly indexing on what we're seeing over the last 12 to 24 months because the world is changing so quickly. And where we invest in AI-native companies that are earlier, they've got to have many of the characteristics of what we call vertical SaaS, system of record SaaS. In some way, I think those two worlds will converge and I'll end up being very hard to differentiate between AI versus system of record. We say services will continue to be probably 30% of our portfolio. We've had a number of very successful investments, again, particularly in healthcare services. But my team is increasingly looking at services and tech-enabled services beyond just healthcare. And so I think that'll probably grow slightly and maybe a bit more diversified beyond just healthcare. You've got a substantial growth team. I think you have 25 plus on that team. Maybe if you could share with us how they bring to bear additional capabilities for the companies you invest in. Yeah. Look, the growth team is so important to what we do. Like, as I said before, Archie, we invest in great companies with great products, great product markets that we're trying to help them scale. And by trying to help them scale, it is very much what the growth team does. So one, human capital, I think, is more important than ever. This is the era of human capital. We're talent is going to ultimately dictate the winners and the losers because the world is changing so quickly and you just need eight plus people, particularly in some of those top leadership roles to help adapt. And so we've got a human capital team that's seven people that's built out of wonderful network of executives that we think are really talented and going to be able to be successful in this go-forward AI world. So that's a huge part of what we're doing. Sales and pricing is always going to be a big part of what Sarah does because we focus on top line. Like our investments in order for them to be successful have to have really wonderful organic growth. And so sales, sales enablements. One of the tools you can use now to make your sales team more effective is very topical. And our growth team is engaging with our portfolio to make sure that we're putting in the systems and processes to adapt and be even more successful on the go-to-market. The place that we're investing even more today is around AI capabilities and products. For example, we're starting to build out we call our AI transformation office where we want it every single one of our portfolio companies. There would be an executive that really owns the internal AI transformation story and initiatives almost like another executive role. Sometimes it doesn't need to be. It could be the chief of staff. And then that person within the company is working very closely with our growth team and our growth team resources to think through what's the semantic layer that we need to build out. What sort of customer support tools do we be using in this day and age and making sure that the internal capabilities of our and R&D AI PDLC are as strong as they've ever been. And so that's the major muscle over the last 12 months. We've been investing in. It's not just human capital. It's not just go-to-market. Now it's very much around AI and AI transformation at these found-round companies. Is it the case where you always want to see a company that can benefit from a lot of kind of AI Capabilities. Like could there be a situation where you find a company where they've got exceptional talent and they don't need necessarily your help on AI? Curious if like your thesis is like we have to impart our AI expertise to get the returns or value creation we want. - No, I think the company and the talent has to be very forward AI leaning. If you're not in today's age, I think you're at risk of becoming a dinosaur. But look, we learn as much from our portfolio companies as hopefully they take from us. I let an investment last year in a very small GovTech company called GovWorks, which basically sells AI tools into 911 call centers to help call centers become much more efficient with the latest technologies around AI. They are AI native, they're one of our most forward leaning AI companies. And the board meeting, I'm learning a ton from them. Now there's things around pricing and packaging as we innovate and roll out new products at GovWorks that my team is engaging and helping on. But they're at the cutting edge of what's going on in AI. And it's not like we looked at that company and said, "Gosh, Sarah, it has to have an AI value ad." We look for anyways to partner with founder own companies. And that example with GovWorks, we've brought in a new CSO. We've helped them hire a couple of other executives. And right now we're working with them around sort of the more traditional pricing and packaging, which has gotten even more complicated but exciting in an AI native world. - You mentioned the human capital component. You have an executive network. How has that broken out in terms of could you fill almost every sea level spot in a company if you had to based on this network? - No, because every company is expected specific, right? You can't always match executive A with opportunity B. We've got a really robust network, but I would say two things. That network is transforming and changing. There's a set of executives who have been enormously successful over the last and the 20 years in this world of what I'll call traditional or legacy status. I don't know if they're going to adapt quickly enough. And in some ways, the fact that all their lessons are grounded in the last 20 years may make it harder for them to adapt or move as quickly or learn as quickly. So we're rebuilding our network today. And I would say our network is maybe a little bit more indexed on intrinsic people. We think our fast learners decisive tackles really complicated situations rather than have been there done that executive. Because again, like the number of executives who have seen what we are seeing today and the world we are in today is actually very few. And so our executive network is robust, but we're constantly evaluating, is this executive or is this person going to adapt well and be a good fit for the spec? And the reality is the specs have changed so much that were constantly re-evaluating that pipeline and bringing in new talent and taking some risk on what I call maybe first time executives that haven't proven it yet, but we believe they can make this leap. - I'd like to switch gears a little bit to Serent itself. I mean, you've been around, you were founded around 2008. I believe and you've grown sequentially. I think when Kevin was on, I had mentioned how the fund raises were in sequence and they were pretty consistent like in the terms of the time interval in between each fund. I imagine there's baked into the culture of Serent, a very focused strategy and way you execute. Maybe if you could share a little bit about the culture at Serent. - Yeah, that's a great observation, RJ. And it's something we're really proud of, which is if you look at Serent's funds, we've gone 253, 555, 5750, 1113. We've always had plenty of demands, but we have never grown on size faster than what we believed, the internal human capital, the people at Serent's could effectively deploy and stay on strategy. One of our competitive advantages we believe, and we talk about with LPs is our competitive landscape, the other people that are doing Serent deals, changes every 10 years. Because either you struggle and you're not successful and you can't raise a new fund and so they exit. Or in the industry, if they are successful, wants to grow what you have and wants to grow fund size. And so we have a set of competitors when I started here 15, 20 years ago, like who are nowhere doing Serent deals anymore, they've grown, they were successful, they outgrow our category. And so our firm is, is stayed ruthlessly focused and disciplined, unambusting and found around companies of this size and scale, where we can add value. And that's just so poor to who we are. I think that does lead to the need to be disciplined when we go through our fundraise. But the impact on culture is one, we wanna recruit people who are really passionate about what we do. The folks that come to Serent's, obviously it's got an investing interest, but they have to love business building. They have to love working with founders and the energy that comes from winning when it's maybe a family member that's been with the company for 20 years or an executive who is taking a new leap. You have to be able to roll up your sleeves and maybe build a little bit scrappy because our companies aren't that big and they're not going to be able to hire a plus talent everywhere. So you have to really love that scrappiness and entrepreneurship. At the same time at Serent's, we want our people to be entrepreneurs. To still think of this as a young fund, a small fund to navigate to where the opportunities are. And so there is very much a linkage between our fund size, where it's dictated the types of companies that we can invest in, but also just trying to stay small, nimble, entrepreneurial that therefore permeated our culture both in the people we recruit and how we want them thinking about the investments and the engagement with our portfolio. - We're coming up on time. I do have a few questions remaining. One is I'd like to learn more about you, the person, Stu Lynn. Tell us about where you're from, where did you grow up? - Yeah, I am from Chicago, from the Midwest, from the Northern suburbs. I like to say, particularly since I live out in San Francisco, can sort of take the guy out of Chicago, but you can't take Chicago out of the guy. Yeah, I still have my bare season tickets. I mean, huge Chicago sports fan. I'll travel around the country when there's even a glimmer of hope. And mostly there's just a glimmer. There's not real hope. I've got four kids, three boys and a girl. The youngest is a girl. And I'm doing my best to try to raise them with their Chicago roots. And so they love deep dish pizza, they love hot dogs, and most of them are our Chicago sports fans. And they keep you really busy. They coach a couple of their basketball teams. The third job, we do travel a lot during the week because we're on the road visiting our companies with founders, but on the weekend, I do my best to really engage with the kids. Or they run from six to 13. So I'm very much in the thick of it. The guy I married, we met at Northwestern and we were interns together, actually, between our junior and senior year. We had never had on campus. And we sort of had the secret summer romance when we were 21. We didn't really tell any what work. I might have leaked it a couple places, but yeah, we're still together, happily married. And it's wonderful. Excellent, I have two final questions. One is, can you tell us about a person who has had a profound influence on you? Yeah, I think back to an early manager mentor I had named Matt. And I started my career at Bain & Company. Matt was actually at Bain & Company as well. And that was South African, super entrepreneurial, had his passion for the world. And he ended up recruiting me to join a startup, sort of a small little business venture that he had done coming out of Bain. And I remember when I first met him, I was just gravitated to who he was. And I sort of took a leap of faith to go join him. This was back in the early 2000s. And I went in there, and the first project he sold was to Sydney, Australia, working for Qantas Airlines. And so I took the job, partly because I was like, this seems like an amazing opportunity to go do work in an astronaut, live in Australia, and Sydney, which I'd always want to do. But I expected to kind of stay only a year or two. I ended up staying for your four. And a big part of it was Matt. He is someone who forms these authentic relationships with people. He wears his emotions on the sleeve in a good way. And I knew he, as long as I was working with him, not only would he care about me personally, but he would really invest in my development. And the reason why I share Matt's name and sort of that anecdote is, and I'm not perfect, but I've tried to model my career and some of my mentorship after Matt's really investing people, knowing that I care and being authentic with them. So I think a lot about like that first manager, that first mentor with Matt, who kind of drew me to a job 'cause he's very charismatic, but kept me there because he's such a great people leader. - The last question, how do you like to spend your free time? I know you don't have much free time, but aside from the kids and work, or maybe if you had free time, how would you spend it? - I don't have a lot of free time. I mean, I could share with you RJ, my wife sends an email Friday night thing, here's our weekends calendar. If you want to be parent A or parent B, parent A is running between 12 different places, parent B is running between 13 different places, but maybe a little bit closer. So I don't have a ton of free time. I do try to coach a couple of my kids, particularly basketball, at least when they're younger, 'cause they get older, I'm not good enough, or knowledgeable enough to really be a coach. I love movies. I recently saw the Odyssey, which was probably the least just fantastic, one of the favorite movies I've seen in a long time. I like to go to see movies with the kids. And I try to read, but I'm one of those people that finds it really hard to sort of catch up on reading during the every day, and then I'll go on vacation, and I'll read like three books in a week. And so I constantly have this list of books I'm tracking, knowing I'll never get to it, so I actually get some quiet time on TTO, and then I'll try to read like crazy to get caught up. - Well Stu, I want to thank you again for taking the time. It's been a great conversation. It was great to meet you, RJ. Thank you. (upbeat music)