Understanding Time Horizons With John Neace Of Neace Ventures

Neace Ventures is focused on passionate entrepreneurs who are receptive to new ideas and have a clear vision for successful exits. Scott Kelly sits down with their founder John Neace, who shares the importance of making investments that align with enjoyment, transparency, and a clear understanding of time horizons. He explains how this focus enables them to diversify into various sectors, including sports, food and beverages, building, trucking, and insurance. John also talks about understanding the risks in communicating openly and not letting failures in the market consume you.

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Understanding Time Horizons With John Neace Of Neace Ventures

I had a great conversation with John Neace of Neace Ventures and he shared his entrepreneurial journey and his investment philosophy on the show. John started out in insurance, building and selling two successful firms before venturing into other industries like trucking, furniture, food and beverage. John emphasizes investing with passionate entrepreneurs who are receptive to new ideas and have a clear vision for successful exits.

He’s been involved in a lot of great investments with a mix of his personal funds and limited partners, with a focus and opportunities that align with enjoyment, transparency, and a clear understanding of the time horizons from beginning to end. John advises and understanding the risk in communicating openly and not letting failures consume you. A really interesting interview with John Neace. Give it a read. I’ll be back with some of my takes.

I’m excited to introduce everybody to John Neace of Neace Ventures. John, welcome to the show.

Thanks. Glad to be here.

How John Get Into The Venture Capital Space

Before we get into what you’re doing in the F&B space, maybe share a little about your personal background, what you’ve done prior to that and things you’re doing in addition to the fund.

Yeah, sure. I’m a Kentucky boy. Born and raised in Northern Kentucky at Newport College up there. Undergraduate school at Xavier and then hired by Marsh McLennan, who is the largest insurance broker in the world. I worked for them for eleven years. They moved me a couple of time,s and the last move was a whopping 100 miles down the road to Louisville.

I ran their offices here in Kentucky. Big giant corporation, it’s time for the next move up the ladder, if you will. I had two young kids by then. As I said earlier, I’m a Kentucky boy and we liked it here and I didn’t really want to move. It was take the move or somebody else was going to take this office over. I left them. I enjoyed working for them, though. They were fabulous to me. They really were.

When I left them, I started my own firm doing the same thing, selling insurance for twenty years. I sold it to private equity, so it became Assured Partners. I had about 900 people when I sold it. Assured Partners closed the transaction and they sold the Gallagher. They must have been better at growing it than me because they were $3 billion when they sold out.

It seems like you did a pretty good job to start it, though.

I didn’t want that size of company. That’s not me. I sold to them. I had a five-year non-compete, so I had to wait out to non-compete. I came back, started another insurance venture and then sold it to Fifth Third Bank, who subsequently, a couple of years later, sold it to what is now Foundation Risk Partners. A couple of forays at insurance.

Along the way, you become good friends with your customers. At least I did. I had a customer who was ready to retire and he wanted me to try to help him find a buyer for his business. I would say almost in every case, “Why don’t you sell it to your number two? He or she’s been here and they’ve been really running it for you anyway or at least helping to run it.” The answer was always the same. “I don’t want to negotiate price with them. I don’t want to be the bank and I feel like the business is headed into a downturn.” I would say, “Would you be objective? Would you mind if I talk to your number two and see if he or she wants to buy it with me?”

They said, “I don’t care who buys it. Just don’t call me if you have problems.” I guess the first 2 or 3 deals, just serial entrepreneur style. Going into businesses where I had a lot of familiarity, because while I was not part of the team, I handled the insurance for the team. I generally knew the good, the bad and the ugly of what was going on. I certainly learned how to tell a good operator from a bad one or maybe a good one from just a lucky one.

It was fun. After the second insurance non-compete expired, I decided I’m going to try my hand in a few other things. I had been an Ashley Furniture Store trademark user and had started a trucking business around that. We expanded our trucking business. I like to have a beverage or two, so we had invested in a winery. We had invested in a local beer called Falls City Beer. Believe it or not, at one time, they were the third largest beer in America. That was long before I got here.

Anyway, we invested with a group while bourbon was really hot called Four Gate Bourbon and exited that. I then invested in a hemp business. I was trying to sell more beer, really, trying to figure out how to sell more beer. One of the ways this seemed, as I talked to folks who knew what they were doing, was that you need food, so we started looking at opening a restaurant or a tap room. We ran into Parlour Pizza in that process and then bought Parlour because it gave us seven locations really for the price of what I think I would’ve paid for 1 or 2.

We’ve now added two more locations and are growing the pizza, people, and pints business. It’s been fun. I think I’ve learned one thing there that if you’re in the food business, you might as well be in the real estate business at the same time, because if you put a concept in and it doesn’t work, you’ve spent a lot of money anyway. I like to be able to control that space and then pivot.

Investing In The Food And Beverage Industry And Beyond

Obviously, I went to the website. It looks like you’ve got several companies in the F&B-related space. How did you formalize these ventures and what’s your thesis around investing now? Give me some examples of the type of things you looking at entrepreneurs or type of trends you see.

Right now, I think soccer is our driver. We’re the top chairman, but we own with a group two soccer teams here in Louisville. We’ve been 11 years on the men’s side and 5 on the women’s. We built a 15,000-soul stadium. The men are first place as we speak, going to at least win the regular season crown. The women are in seventh right now, at least playoff eligible, with only a few weeks to go. By the time you put this out, I would’ve either been correct or we would’ve found a way to blow it.

You’ll be celebrating or lamenting, for sure.

Exactly. One or the other. We got there and we just saw more advertising situations, more people pitching to us and we said, “It seems like an attractive space. Maybe we’ll try to do this.” I’ve got a great president in James O’Connor. A good management team and good coaches. I’ve never kicked a soccer ball in my life. I’m not a soccer expert. They’ve taught me a lot, but I would not consider myself to be an expert. It’s been fun.

That led us to look at a team in Europe. We made a run at a couple, but they were more than I could pay or would pay. We want to look at that. In those travels, we made some friends in Scotland and we bought into a gin in Scotland, and now we’re building a distillery in Northern Scotland. It’s fun. You have go over there with me.

I’d love to.

Hang out, shoot a few birds and a deer.

You give me the date and time, but I’m there, for sure.

All right, we’ll do it. It was fun. If you were going to do it, bourbon was hot. I would argue now it’s not. Gin is pretty hot. Whatever ends up happening around CBD beverages, I don’t see how you kill them now. They need more regulation and we’re all in favor of that. I see that as very much a merging thing. If you want to get a nice little buzz and only consume 15 calories in a beverage and have 2, we’ve got the perfect product for you. No hangovers.

Some Success Stories At Neace Ventures

It seems like you’ve got a pretty diverse background in sports and obviously spirits and CBD. You mentioned the soccer team. Talk about some of the other success stories, some of the companies. You said you had a couple of exits very recently and in the past. Talk about the ones that have really done well, the ones you’re really excited about.

Insurance obviously was one that I was in twice and did well. I just jumped back into an insurance venture for the third time. I went on their board. It’s a company called Afore and they’re an emerging brokerage, PE-backed, trying to grow. I like the people and I know the space. I could probably pass an insurance exam in my sleep. I did it for so long. It was good business.

One of my best friends when I moved to Louisville, a friend of mine was in the potable water business. I joined his company and went to work with him. I’ve since exited. He’s in the process, I believe, over time. That was very successful venture. The first trucking venture was good. We sold it and liked it. I liked the people. Solving the problem. They got a freight problem. How do you help them solve it long-term? I did try a woodworking cabinet business once and I’ll go to my grave never understanding how it didn’t work. I needed to sell 35 sets of cabinets a year and I was buying 15 of them because I was building 15 houses a year.

You were the best customer.

I was the best customer, but apparently the worst because it never took off. I think in all those that the thing you find right is if you do business with the right people and you’re both willing to communicate. Scott, I can see what they’re doing wrong, but if they’re not going to listen, what difference does it make?

Having A Burning Passion For The Industry

I’m so glad you said that because that was going to lead me to my next question, because, again, you’ve been so diversified. What are the attributes, in addition to what you just mentioned, of the entrepreneurs that you invest in? What’s the primary skillset? You’ve done it in a lot of different industries.

They have a passion for what they’re doing. They have to love that industry. I think that’s probably number one for me. I always ask them in the beginning, “Where do you want to go and what do you consider a successful exit?” If we’re trying to 10x or say even 7x and we get there and then they say, “I want to keep going,” my next question then is who’s around them at that point? Is it their same friends that they started the business with? Not that that’s bad, but do they really have people with the skillset to move them forward?

If they don’t, then we’re probably going to exit. We’re going to give them that opportunity to let the new partner buy us out. I hope they own the world, but that’s really not one of our goals. We look first at they are passionate about the business? Secondly, really, are they receptive to other ideas or other opinions? Can we discuss some and be friends when we’re finished? I always say the same thing. I don’t want to be in a boat with anybody who doesn’t have an oar in their hand, too. I certainly don’t want to be there if they’re rowing in the opposite direction.

How John Invests In Things He Enjoys

That’s a great analogy. Talk about at what stage are you investing in entrepreneurs? Are you there at concept? Do they have to be in revenue? Where do you get involved?

We probably get involved everywhere. Those investments that are concepts for us are small. We’re not a giant fund. As I was saying in the beginning, at least right now, we’ve never gone out and done a capital raise. We’ve done everything with our own money and we know we need to change that. Really, it wasn’t until the restaurant space that we actually said, “We’re going to take some limited partners.” That was really intended, in the first two examples anyway, to be more market-specific.

If I’m going to go to Cincinnati, I need an ambassador in Cincinnati. If I’m going to go to Lexington, I need an ambassador in Lexington. In Lexington, we sold limited partnership shares. We are doing the same thing in Cincinnati now. I’m old enough that my kids and their friends are doing well and they’re showing up looking for advice and saying, “I got X amount of money. I’d like to invest in something,” and i’ll show them 2 or 3 of our things and say, “You’re welcome to get in in this as long as it’s not the milk money and you’re not mad at me if this thing doesn’t work. So far, knock on wood, they’ve worked.

We shared food and beverage in our conversation. Is there a particular core that you’re going to be investing more in or is it just going to be opportunities as they come up?

Opportunities as they come up. One of the things that always frustrated me when I would put money in somebody’s fund, our only space is IT and healthcare. I find one of their investments and I’m like, “They use IT. I don’t see any healthcare here. I like the idea of really let people pick and choose if they want to get in this space.

I wouldn’t say, “You can get into food and bev with us, but you can’t get into trucking,” for example. That’s one of the things we’ve been trying to figure out as we look if we put a fund together. I don’t know what I don’t know. Family office, bigger investors, probably we’d do better with a couple of those and then some small LPs. At the same time, I’m too old to want to be part of somebody else’s team.

Why Choose Neace Ventures Right Now

I completely understand that. At this point in my career, I’m very much the same way. I tell people I’m currently a bad employee. I definitely understand that. The potential folks that do want to invest alongside you, why Neace Ventures? Why now?

I think it’s three reasons. It’s fun. I said in the beginning that we want to be sure we have fun with you and with what we’re doing. Things that if my dear mother were still alive, the devout Pentecostal that she was, I wouldn’t advise her to invest in the spirits game with us. People who enjoy that would have fun with that with us.

I think the biggest thing, though, is transparency. I’m not taking a salary out of this. I’m not looking for a salary. I’m a co-investor. If they do well, I do well. I feel like whoever the stockbroker is right there on that line. I really do feel that way we want you to see it and to grow it with us. Third, I want to be sure if someone invests in a particular thing with me, that I understand their time horizon.

Don’t get in a 7-year deal if you’re really looking for 3-year money. We try to push those three tenets first, where do you want to be? You’ve got to have fun with it. It’s like in Scotland, in this new distillery, we’ll start laying down product in ‘26 and you can buy a cask or a quarter cask or whatever, but you actually won’t get that product until 2030.

If you’re a shorter-term investor, we’re not for you. If you’re not going to go over there and play golf or go over there and hunt, we’re probably not the right investment for you over there. If you like hospitality and you want to go over there and stay or take your family or you want to go with your buds and play a little golf and see Northern Scotland, yeah, I think we’re a good investment. It’ll pay off over time. Probably, if you’re my age, it’s more one for the grandkids than for yourself because we’ll own that real estate. If we’re successful in building a brand name, then we’ll be fine.

Do Not Let Market Failures Consume You

Any final thoughts you want to share with the readers?

Money’s a commodity. It’s like Doritos, they’ll make more. I think the worst thing you can do is think it’s yours and go to a party and not want to share the bowl with anyone else. I’ve always felt that way. When we sold the insurance business, we made a lot of millionaires and they made a lot more, those who chose to stay with that company. Same way, when we sold the other two. The key people are still there and they’re doing well. I like to think that we had at least some small hand in training them and that we taught them the right values and the right moral compass as they did that so that they succeeded.

I’ve got a Master’s Degree in Gerontology. I went out to USC and did the school. My Master’s is actually Public Administration, but my focus was Gerontology. If I had any sense at all, Scott, I’d have started a private for-pay service for seniors when I was in my twenties. Now, I insured a lot of them, but I could have started one and I actually knew what I was talking about at least. I think that would be it. Be sure you really understand the checks and balances, the risks of what you’re doing and that you’re prepared to risk, but not let it consume you if it doesn’t work. You can still go somewhere else and buy good kitchen cabinets, even though I couldn’t do it.

Get In Touch With John And Neace Ventures

John, where can people learn more about these ventures and reach out to you?

Probably the easiest just to reach out to me at John@NeaceVentures.com. Tell me who you are, what you’re interested in, and then we’ll make sure someone responds to that. We’re here if you like Kentucky, how could you not, or Southern Indiana. You might explain one thing to me, though. If Indiana is 400 miles long and I live at Mile 180, how is that Southern Indiana? I’ve never understood that, and i’ve lived here 42 years.

I always say the same thing about South Dakota. It’s way North in the US. John, thank you for being on. Readers, make sure you like, follow and comment on this show. John, thanks for being on and again, we look forward to keeping up on your progress.

Great. Thanks for having me.

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Episode Wrap-up And Key Takeaways

Some really great takeaways I had from my conversation with John Neace of Neace Ventures. He’s involved in a lot of different industries and he really stresses diversification across these, like sports, spirits, food and beverage and insurance. This co-investor model really works because he doesn’t take a salary. That makes his investments and his success directly aligned with those of his partners.

As I mentioned before the interview and during the interview, he really is a believer in open communication with the investors, making sure they understand the time horizon of the investment and the risk associated. The great thing is he invests in things he enjoys. For example, he invested in a Scottish distillery, which has great perks, obviously, like the hospitality experiences involved in being involved in a Scottish distillery.

He had some really great takeaways for the founders that he invests in. As I mentioned before, he wants them passionate in their industry. He wants founders that are coachable, open to discussing, considering different ideas and options, but also have a clear exit strategy, which I think is extremely valuable. When investors are dealing with entrepreneurs, they have to know that getting money in is the easy part. Getting the money out is the bigger challenge and they also understand the risk involved.

John has been using his great background in two successful exits in insurance, other successful opportunities and exits in his entrepreneurial life. He is taken those skills and applying that to providing great returns and great advice to the entrepreneurs in his co-investors. We’ve got a lot more great interviews coming up on the show, so I encourage you to like, comment, follow, and share this and all of our interviews and see you next time.

Important Links

• Neace Ventures
• John Neace Email
• John Neace on LinkedIn