Derek Pilling

Derek Pilling co-founded Workhorse Capital in 2016 and serves as one of its General Partners. Workhorse describes itself as a growth equity firm focused on already successful software and technology-enabled services businesses with recurring revenue models. At Workhorse, Pilling is involved in the firm’s strategic and operational development and represents Workhorse Capital and its predecessor on the boards of Datavail and Traackr.

Before Workhorse, Pilling was a Managing Director at Meritage Funds, which he joined in 2003. Workhorse says he led Meritage’s repositioning as a growth-equity firm during the 2008 formation of Meritage Fund III and originated investments including EdgeConneX, Faction, and Crisp Media.

Earlier in his career, Pilling held operating and financial advisory roles in technology-enabled services, including CEO of IP Commerce and Vice President of NetLibrary. He also worked as an investment banker with the Wallach Company and A.G. Edwards & Sons.

Pilling is a graduate of Indiana University and Northwestern University’s Kellogg School of Management, where he graduated with honors. His personal site also lists the Kelley School of Business at Indiana University and Kellogg as his educational background, and says his current work includes coaching private equity-backed executives and providing independent director, executive chair, and interim executive services to PE-backed companies.

• Workhorse’s stated focus is growth equity for “software and tech-enabled services” companies with recurring revenue.
• The firm says it invests exclusively in technology-enabled services businesses and other businesses with recurring revenue models and strong operating leverage.
• Target companies typically need $3 million to $10 million of capital to reach their full potential.
• Workhorse looks for $5 million to $30 million in annualized revenue, majority recurring revenue, organic growth above 20%, unit contribution margins above 50%, and businesses operating at or near break-even.
• Workhorse’s preferred transaction structures include growth equity investments, founder/shareholder liquidity, and both minority and majority transactions.
• The firm’s stated philosophy emphasizes fundamental value creation over hype: “Out with vanity metrics; on with fundamental value creation.”
• Pilling’s own writing shows a strong bias toward capital-efficient, disciplined founders; in his bootstrapping post, he argues that bootstrapped entrepreneurs have a built-in test for whether growth capital will create more value than staying self-funded.