Monthly Archives: July 2020

Three Roots Capital Valued Partner Spotlight

July 28, 2020

J.C. Egnew, Outdoor Venture Corporation

J.C. Egnew is the Chairman and Chief Executive Officer of Outdoor Venture Corporation (OVC) and a valued partner of Three Roots Capital. As a former NASA engineer turned serial entrepreneur, Egnew is responsible for creating five manufacturing facilities and more than 1,000 jobs in McCreary County, a rural and historically economically distressed region of southeastern Kentucky.

Egnew hasn’t always wanted to be an entrepreneur. Growing up in southwestern Indiana, he graduated college with a degree in mechanical engineering. During his schooling, he was able to “get in on the ground floor” of NASA through his university’s co-op program. In 1963, he took a full-time job with the agency, first working as a rocket test engineer in Huntsville, Alabama, and later at the NASA Stennis Space Center in Mississippi.

In 1968, he decided to pursue a graduate degree in industrial management at the University of Tennessee, Knoxville, where he researched growth patterns of small businesses, featuring a local recreational camping business in his thesis work. After returning to NASA briefly upon graduation, he came back to Knoxville to serve as a vice president of manufacturing at the company he had studied during his graduate career.

After “working hard and not making any money” for a couple of years, Egnew decided it was time to start his own business. With the help of a couple of friends, he founded OVC in 1972. He began his operations in a previously abandoned building given to him by the president of the local lumber company in Stearns.

In addition to his entrepreneurial activities, Egnew is passionate about revitalizing his community. Over the years, he has actively worked to improve the wellbeing of the county, including helping bring a public library to the area, serving as the first McCreary County Chamber of Commerce President, and donating a building, which was restored and transformed into a Depot for the Big South Fork Scenic Railway. For Egnew, giving back to his community is personal.

“We’re all put on the world to make a difference for others and in a small community, it gets really personal,” he said. “It’s not like writing a check to an entity that you aren’t personally involved with. It feels good to see your neighbors and friends do better and have a better life. It’s very rewarding.”

Egnew first met Grady Vanderhoofven, Three Roots Capital President and Chief Executive Officer, more than fifteen years ago.  Ray Moncrief introduced Vanderhoofven to Egnew.  At the time, Moncrief and Vanderhoofven were partners in two venture capital funds focused on Appalachia, and Moncrief had been friends with Egnew for years and was very familiar with OVC.

“To me, J.C. is the epitome of what a successful entrepreneur can mean to a community,” Vanderhoofven said. “His economic and social impact in that county cannot be overstated. Because he chose to live in southeastern Kentucky, the entire community reaps the benefits of what he has accomplished there.  Three Roots Capital strives to support entrepreneurs and companies that positively impact their communities.”

Supporting A Rural Manufacturing Company

July 28, 2020

Outdoor Venture Corporation

Three Roots Capital supports rural entrepreneurs and companies that are dedicated to having positive economic impacts on their communities. One of our borrowers, Outdoor Venture Corporation (OVC), has a decades-long history of successful operations, job creation, and philanthropic work in McCreary County, Kentucky.

OVC is based in Stearns, Kentucky, within McCreary County. Over its 48-year history, OVC has pivoted its operations many times to meet changing consumer demands or in response to overseas competition. Originally founded as a recreational tent business in 1972, OVC is now a leading and prime supplier of critical next-generation military modular tent systems, base camp components, and military accessories.

“You have to diversify to have a long-term, sustainable business,” remarked J.C. Egnew, Chairman and CEO of OVC. “Everything has a life cycle. We diversified over the years and now have four main, different segments of our business. Rarely are they all going up or down at the same time, which gives us a lot more stability.”

Currently, OVC is collaborating with Fibrotex USA on a 10-year, $480 million contract to supply next-generation camouflage to the United States Army. As the strategic subcontractor, OVC helped Fibrotex USA establish a new manufacturing location in Stearns, which is expected to create up to 350 full-time jobs and represents a $12.1 million total investment.

“It’s not just a big deal business-wise, it’s a big deal community-wise,” Egnew explained. “If we were in a bigger city like Lexington or Knoxville, a company employing 300 people would hardly make the business page, but here, it’s very important to the community.”

Access to capital in rural regions can be complicated. Frequently, traditional lenders are less willing to make loans to businesses outside of larger cities.

“You’re looked upon as a much greater risk from a lender’s point of view,” Egnew said. “You find over time there are certain lenders that are friendly to you and that type of environment. Three Roots Capital is one of them.”

Three Roots Capital made its first loan to OVC in December 2016 and a second loan in January 2020. Both loans provided working capital to the business, and the second loan in particular helped make it possible for OVC to work with Fibrotex USA and scale up its operations.  Three Roots has had preliminary discussions with OVC about the prospect of financing the continuing growth of the business and potential additional expansion.

“As a small business, you have to have good strategic partners that can work with you in an effective way,” Egnew said.

Other industries and businesses have been hit hard by the pandemic, but Egnew shared OVC has been extremely “fortunate” to be “able to keep things going, full speed ahead” during this time.

“We’ve done everything we can to stay on our feet and move forward,” Egnew explained. “We’ve actually had three of the best months in the history of our company because of the types of essential products we happen to be making.”

For Egnew, moving to a small, rural community nearly 50 years ago was “a good decision.”

“Some people in bigger cities might ask, ‘How could you do anything in Stearns, Kentucky?’ This might not be a place for General Motors, but you need to find the right place for your business,” he said. “You have to feel good about where you are and what you’re doing. We’re very lucky. If you’ve got that, you’re great.”