How Stockton Real Estate Advisors delights investors with Nth Round

Conestoga Capital Advisors was built twenty years ago on the premise that employees are a critical asset – and should be rewarded accordingly. Founded in 2001, the 100% employee-owned firm specializes in small and mid cap portfolio management. As of 2020, the firm manages over $5.8 billion in client assets.

Duane D'Orazio, Conestoga’s Co-Founder, Managing Partner, and Chief Compliance Officer, is responsible for overseeing the company's technology systems and daily operations. He was on the lookout for a platform that would do double duty, both delighting shareholders and seamlessly serving Conestoga’s valued employees.

After careful consideration, Nth Round emerged as the ideal platform that would offer equity solutions for employees and shareholder maintenance alike. “We spent quite some time, a year and a half to two years, trying to figure out the best equity option for the firm,” said D’Orazio. “We ended up going with just a straight equity option after having reviewed phantom stock ownership plans or schemes options. And at the end of the day, we thought the best way to really capture the participation of all the members of the firm was to have a straight equity ownership of the firm.”

The growing popularity of employee equity is indisputable. In fact, 47% of private company employees currently have some form of equity ownership or profit sharing mechanism. Why? It typically comes down to flexibility. The big benefit of equity is the ability to think long-term and to plan for both retirements and regenerating new shares for potential new partners.

A platform like Nth Round serves to formalize equity ownership, and allows partners to easily log in and view their current value and cost-basis on demand. “The platform is fantastic because it just takes it to another level,” says D’Orazio. “My partners can log in any time and see what their value is worth. I think another important part of this is that we've been working with Nth Round on is the tax basis. I think that's also very important that it's common thought on securities in our Fidelity account, Schwab account, whatever it may be – you're tracking the cost basis and the capital gains associated with transactions. But what this does then allows us to help the partners and have a formalization where they can go in and see what the cost basis of their ownership really is.”

Conestoga prides itself on the fact that they are an employee-owned company with long-term vision. Their authentic investment in their team members is what they believe differentiates them and allows them to obtain meaningful results over time. Investing in their employees is therefore taken literally, with the idea that financial investment  solidifies employee commitment – and client results.  

“To have Nth Round involved in this, to be able to push this out…it just helps the process to make it extremely efficient,” says D’Orazio. “I think what it does is it just adds value to being a partner owner of a firm. You have the transparency to see what you really own and show the growth of that ownership over a period of time.”

Long-term vision means thinking ahead to when employees retire – because equity benefits continue long after that last day in the office. One of the things that companies often forget is that as soon as you grant equity or set someone up on a schedule, it's on the company's shoulders to then make sure that that all plays out and is granted on the dates that it's promised.

Nth Round provides end-to-end equity service throughout an employee lifecycle. The liquidity platform essentially functions as a private stock market for Conestoga, storing a full history of transactions and equity grants that keeps the company on track and employees satisfied.

“It's not just a short term vision, the way we manage our assets and our investment models, we’re very long-term oriented, We've spent a lot of time finding companies. We want to invest them in and be with those companies for many years. That's the same philosophy we're using running our firm with our partners, that it's a long-term horizon.”