New State Capital Launches Forge Select, Taps Gupta for Growth

New State Capital Partners, a Los Angeles-based private equity firm specializing in middle-market software and tech-enabled service companies, announced the launch of Forge Select, a new non-control investment strategy designed to provide growth capital to founder-owned businesses while allowing entrepreneurs to retain majority ownership and operational control.

The firm simultaneously announced the appointment of Sanjay Gupta as Managing Director to spearhead the new platform. Gupta brings over two decades of investment experience, most recently serving as a Managing Director at Alpine Investors, where he was instrumental in developing the firm's minority investment capabilities.

The launch of Forge Select represents a deliberate strategic expansion for New State Capital, which has historically pursued control-oriented buyouts in the lower middle market. Founded in 2018, the firm has built a reputation for partnering with software, SaaS, and tech-enabled service businesses generating between $10 million and $75 million in revenue.

"Many exceptional founder-led businesses need growth capital and strategic support but aren't ready to cede control," said Jeffrey Crisan, Managing Partner at New State Capital. "Forge Select allows us to partner with these entrepreneurs on their terms, providing the resources and expertise to accelerate growth while respecting the vision and leadership that made their companies successful."

The move aligns with broader trends in the private equity industry, where an increasing number of traditional buyout firms are adding minority or growth equity capabilities to their arsenals. This flexibility enables firms to capture opportunities across a wider spectrum of company maturity and ownership preferences, particularly as founder demographics shift and more entrepreneurs seek alternatives to full exits.

Gupta's appointment brings significant domain expertise to the new strategy. During his tenure at Alpine Investors, he played a central role in originating and managing minority investments, helping portfolio companies scale through operational improvements, strategic M&A, and talent development.

Prior to Alpine, Gupta held investment roles at Summit Partners and spent time in investment banking at Goldman Sachs, giving him exposure to both growth equity and traditional M&A across the technology landscape. His experience spans software infrastructure, vertical SaaS, and business services—sectors that will form the core of Forge Select's investment thesis.

Gupta's focus will extend beyond capital deployment to hands-on operational support. Forge Select will leverage New State Capital's existing platform resources, including expertise in sales and marketing optimization, financial infrastructure, recruiting, and buy-and-build M&A strategies—areas where founder-led companies often require external support as they scale.

Forge Select will target minority stakes in founder-owned or closely held businesses operating in three primary sectors:

Typical investment sizes are expected to range from $10 million to $40 million, with New State Capital taking minority stakes between 20% and 49%. The firm has indicated flexibility on structure, including preferred equity, convertible instruments, and common equity, depending on the specific needs and growth trajectory of each portfolio company.

The strategy specifically targets businesses at an inflection point—companies that have achieved product-market fit and initial revenue traction but require capital and operational expertise to professionalize go-to-market functions, expand into new customer segments, pursue strategic acquisitions, or scale infrastructure.

The minority investment and growth equity landscape has grown increasingly competitive in recent years. Traditional venture capital firms have moved upmarket, growth equity specialists continue to raise larger funds, and buyout firms have added non-control strategies to capture founder-friendly opportunities.

New State Capital's differentiation lies in its operational DNA. Unlike pure financial sponsors, the firm emphasizes hands-on collaboration across sales, marketing, talent, and M&A. This approach mirrors strategies employed by firms like Vista Equity Partners and Thoma Bravo, which have built substantial value through systematic operational improvement across their portfolios.

Additionally, the firm's focus on the lower end of the middle market—businesses generating $5 million to $75 million in revenue—positions Forge Select in a less saturated segment of the market. While mega-funds compete aggressively for stakes in unicorns and near-unicorns, smaller-scale opportunities often receive less attention from institutional capital despite offering attractive growth profiles.

Forge Select's launch occurs against a backdrop of evolving founder preferences and capital market dynamics. Increasingly, successful entrepreneurs are seeking growth capital without relinquishing control, driven by several factors:

First, the proliferation of capital has given founders more options and negotiating leverage. With record levels of dry powder in private equity and venture capital—estimated at over $2.5 trillion globally as of 2024—founders of high-quality businesses can be selective about partnership terms.

Second, demographic shifts are creating a new generation of entrepreneurs who view their businesses as long-term wealth-building vehicles rather than assets to be flipped. Many founders in the software and tech-enabled services sectors are content to scale their businesses over 5-10 years while maintaining ownership and strategic control.

Third, the success stories of founder-led companies that partnered with minority investors—from Mailchimp's eventual $12 billion exit to Atlassian's founder-controlled public market journey—have demonstrated that growth capital need not come at the cost of control.

Since its founding in 2018, New State Capital has built a portfolio of control investments across software and tech-enabled services. The firm manages approximately $500 million in committed capital and has completed more than 15 platform investments and numerous add-on acquisitions. Portfolio companies include vertical SaaS businesses serving industries such as healthcare, construction, and professional services.

The firm's investment approach emphasizes sustainable, operationally-driven growth rather than financial engineering. New State Capital typically holds investments for 4-7 years, during which it works closely with management teams to professionalize sales and marketing, implement data-driven decision-making, pursue accretive M&A, and build scalable organizational structures.

This operational focus will translate directly to the Forge Select strategy, albeit with a modified governance structure that respects founder control. Portfolio companies will have access to the same platform resources—including a network of operating advisors, talent partners, and M&A professionals—that have driven value creation across New State Capital's control investments.

New State Capital has built an operational platform specifically tailored to software and tech-enabled service businesses. Forge Select portfolio companies will gain access to:

• Revenue Growth Acceleration: Specialized support in sales process optimization, demand generation, customer success, and pricing strategy. The firm employs former CROs and marketing executives who work embedded with portfolio companies.

• Talent and Organization: Recruiting support for C-level and senior leadership positions, organizational design, compensation benchmarking, and equity planning. The firm maintains relationships with executive search firms and maintains a proprietary network of vetted executives.

• Financial Infrastructure: Support implementing FP&A processes, unit economics analysis, KPI tracking systems, and preparing companies for institutional diligence in future funding rounds or exit processes.

• M&A Capabilities: Origination, diligence, and integration support for add-on acquisitions. New State Capital has completed over 40 add-on transactions across its portfolio, building repeatable playbooks for tuck-in acquisitions.

The launch of Forge Select reflects broader structural changes in private equity as firms adapt to shifting founder preferences, market saturation in traditional buyout strategies, and the need to deploy larger pools of capital across diverse investment structures.

Several prominent buyout firms have made similar strategic pivots in recent years. Summit Partners pioneered the growth equity model decades ago and has influenced a generation of firms. More recently, Spectrum Equity, PSG, and Silversmith Capital Partners have built specialized practices around minority growth investments in software and tech-enabled services.

What distinguishes New State Capital's approach is its positioning at the smaller end of the middle market, where many specialized growth equity firms have limited focus. This segment—companies with $5 million to $30 million in revenue—represents a substantial opportunity set that is underserved by institutional capital relative to larger-scale opportunities.

According to PitchBook data, minority investments in software and tech-enabled services have grown from approximately 15% of all PE deals in 2015 to nearly 28% in 2024, reflecting both the competitive dynamics of the buyout market and the increasing sophistication of founders who recognize the value of retaining control while accessing growth capital and operational support.

While New State Capital has not disclosed a specific fundraising target or dedicated fund structure for Forge Select, the firm indicated that initial investments will be made from existing capital commitments, with the potential to raise a dedicated vehicle if the strategy demonstrates strong product-market fit.

Gupta and the New State Capital partnership team are expected to complete 3-5 Forge Select investments in 2025, establishing proof points and refining the investment and value-creation playbooks. The firm is actively sourcing opportunities and has indicated it is in advanced discussions with several founder-led software and tech-enabled service businesses.

The timing of Forge Select's launch is notable. With interest rates stabilizing but remaining elevated relative to the 2010-2021 period, and with exit markets showing signs of recovery but not yet fully normalized, many founders are opting to take minority capital to extend runways and position businesses for more favorable exit environments in 2026-2027.

Additionally, the shift toward profitability and operational discipline in software—a marked departure from the growth-at-all-costs mentality of the 2020-2021 era—aligns well with New State Capital's operational focus and value-creation philosophy.

The launch of Forge Select represents more than a tactical expansion for New State Capital—it signals the firm's recognition that exceptional middle-market software and tech-enabled service businesses require flexible capital solutions tailored to founder preferences and company maturity stages.

By combining minority ownership structures with the operational rigor typically associated with control-oriented buyout firms, New State Capital is positioning itself to capture opportunities that might otherwise go to pure growth equity firms or remain bootstrapped by founders unwilling to sacrifice control.

Sanjay Gupta's appointment provides the strategy with credible leadership and domain expertise, while the firm's existing platform resources and sector focus create genuine competitive differentiation in an increasingly crowded market.

For founders of high-growth software and tech-enabled service businesses, Forge Select represents a new option in the capital spectrum—one that prioritizes operational partnership and long-term value creation over ownership maximization. The success of this strategy will ultimately be measured not just in financial returns, but in whether New State Capital can become a preferred partner for founder-led businesses at the critical inflection point between entrepreneurial venture and institutional-scale operation.

As the private equity industry continues to evolve, strategies like Forge Select—which blend the capital strength of institutional investors with the flexibility and operational focus founders increasingly demand—are likely to become not just competitive advantages, but competitive necessities.