Purpose Group 2025 Annual Letter

At Purpose Group, we buy, grow, and hold purpose-driven businesses. We believe business should be a profitable force for good in the world, and we’re inspired to help prove that notion one portfolio business at a time.

Welcome to Purpose Group’s 2025 Annual Letter.

To our shareholders, we want to begin by expressing our gratitude for your faith, trust, and partnership as we enter year four of our journey. We are honored to be stewards of your savings, and we hope this update shows that we are working hard to uphold the standards we set from the very beginning.

In fact, when we compile these annual letters, we strive to treat you, the reader, as our partner, providing insights into how we operate and how we plan to build our fund over time. We strive to be candid and honest in our successes and struggles, and to shine a light on where we are headed and how we plan to get there.

Lastly, for long-time readers of our annual reports and updates, we want to acknowledge the repetition of our strategy and structure. However, if we learned anything from our marketing professors, it’s that repetition is a useful and often necessary tool in effective communication. Or perhaps better said by Walter Benjamin: “repetition is the nature of the web in which the gift of storytelling is cradled.” So let us tell our story.

2025 Annual Letter Summary

To make this letter easier to absorb, and given my tendency to go into more detail than necessary (ahem), below is a summarized version of this report.

• Purpose and Strategy: Purpose Group has two sides to our portfolio strategy: S1, comprising service-based SMBs, and S2, focused on scaling a next-generation marketing agency (Alloy).

• Core Principles: The fund is guided by executing the Purpose Playbook™️, over-indexing on long-term thinking, being the “buyer of choice”, and maintaining decentralized control with a lean fund team.

• 2025 Performance (The Flywheel Turns): 2025 was focused on “belt-tightening, conservative” operations amid economic uncertainty. The fund prioritized efficiency, customer satisfaction, and preparing for future growth.

• Portfolio Company Updates:

  • Gerald Printing (S1): CEO Jennifer Oaks focused on stability, operational clarity, and structural alignment, strengthening the leadership team, and improving financial and operational discipline.

  • Alloy (S2): Achieved major acquisition success (Hot Sauce and The Partnership), significantly bolstering capabilities and client base. Organic revenue was up 5.1%, and client retention improved to 90%. New client acquisition is a focus for 2026.

• 2026 Outlook: The theme is “Optimistic, but Prepared,” with key goals including continuing to obsess over customers, doubling down on organic growth, embracing and leveraging AI, and seeking strategic bolt-on acquisitions.

• Fund Structure: The fund team remains lean (1.25 FTEs), with a focus on CEO partnership and capital allocation (debt management, cash flow strategies, and acquisition capital strategies).

Why a public annual letter?

Following the lead of many organizations we admire (including, of course, Berkshire Hathaway), we publish our annual letter publicly. Aside from our general “Do as Warren does” philosophy, we believe a public annual letter accomplishes two things.

1. Fosters Openness and Growth: We are committed to a high level of authenticity by sharing both our successes and, crucially, our inevitable missteps. Building a business is complex, and sharing our learning process is the most effective way for us to evolve.

2. Inspires the Purpose-Driven Movement: We envision a future with more purpose-driven companies. By detailing our experience building this fund, we hope to inspire others to join the cause and offer them guidance. Learning what works (and what doesn’t) can be invaluable to others starting their journey.

Fund overview

Our plan at Purpose Group is simple: own and operate profitable, cash-flowing, purpose-driven businesses (utilizing our Purpose Playbook™️) that we can be proud of.

The fund’s active partners remain Raj Choudhury and me, with David Cummings serving as our GP partner and co-founder. We are also fortunate to have four incredible advisory board members: Jonathan Morgan, Sanjay Parekh, Bharath Parthasarathy, and Kashi Sehgal.

Currently, Raj and I divide up the responsibilities of the fund accordingly:

Fund management

• Strategy & Operations (both)

• Finance (Raj)

• Marketing & Communication (Jeff)

S1 portfolio

• Gerald Printing (Jeff works with Jennifer Oaks, CEO)

S2 portfolio

• Alloy (Raj is the active CEO)

With Raj as the full-time CEO of Alloy, we’ll count a quarter of his time toward the fund. This means that, with 1.25 FTEs in our fund team and 150 total portfolio team members, our fund-to-portfolio team member ratio is 1:120. You can believe we’ll strive to improve this number over time.

Raj and I consider it a genuine privilege to build this fund, which is why, as Warren Buffett says, we “tap dance to work” with excitement every day.

In addition to this annual report, we publish regularly on our Substack newsletter, which we’d love for you to subscribe to. Here are a few example posts from 2025:

• Three things we learned from Berkshire Hathaway’s 2024 Annual Report

• A Conversation on The Purpose Playbook

• Beyond the Fish: Why Purpose is Your North Star

Our model

Our fund operates with a two-pronged strategy, which, after careful deliberation and many whiteboard sessions, we creatively named S1 and S2.

S1: Service-based SMBs

The S1 side of our portfolio targets blue-collar, cash-flowing, people-based businesses primarily in the Southeast. Our first S1 acquisition was Kentucky-based Gerald Printing & Liberty Imaging (Gerald) in May 2023.

For S1 businesses, we seek established, decades-old companies in stable industries that consistently and efficiently generate free cash flow. While we welcome rapid organic growth, it is not a requirement; consistent cash flow is the engine that funds further acquisitions.

S2: Scaling a next-generation marketing agency

The S2 side is centered on Alloy, which joined Purpose Group in March 2024. Under the Alloy umbrella, we are continuing to build a diversified marketing and communications agency.

Having a marketing agency in our portfolio offers a significant advantage, particularly in supporting our S1 companies. Given that Raj and I each have over 25 years of experience building marketing agencies, we can leverage Alloy to add sophisticated marketing, sales, and e-commerce capabilities to every business in our fund.

Acquisitions

There are two types of acquisitions that fit our model: stand-alone businesses and “bolt-on” acquisitions. As you’ll see below, we acquired two stand-alone businesses in our first two years, and two bolt-on acquisitions last year.

2023

• Gerald Printing (S1)

2024

• Alloy (S2)

2025

• Hot Sauce (merged into Alloy)

• The Partnership Inc. (merged into Alloy)

Note that stand-alone acquisitions are ones that we will make from the Purpose Group level, while bolt-on acquisitions will be made at the portfolio company level. Over the next several years, and in fact likely forever, we expect to make more bolt-on than stand-alone acquisitions.

Core principles

As Purpose Group enters its fourth year, we remain committed to several core principles:

1. Execute the Purpose Playbook Operating Model

We have a specific and proven methodology for how our companies operate. Developed over the last 15 years, The Purpose Playbook™ has three central elements:

• Fostering a trusting leadership team.

• Operationalizing the company’s PVTV (Purpose, Vision, Tenets, & Values).

• Implementing a goal planning and profit-sharing plan (often utilizing The Great Game of Business).

(For more information, the Turnaround Leadership Series of books details The Purpose Playbook.)

2. Over-index on long-term thinking

We are committed to a patient capital-deployment strategy, inspired by models such as Berkshire Hathaway, to maximize returns over time. We are confident that stable, cash-flowing businesses, operated with a purpose-driven model, will deliver significant long-term returns for our shareholders. Our focus is on actions that create enduring value and build solid businesses that can grow and evolve. We believe this long-term view is critical, having observed the detrimental effects of short-term pressure on leadership teams. While uncommon in the US, cultures such as Japan’s have long embraced this idea; as the BBC recently noted, over 33,000 businesses in Japan have thrived for more than a century.

This focus on the long-term should not be confused with a lack of energy or enthusiasm (or action!) for the work. If we had a company motto, it might very well be the Latin phrase “Gradatim Ferociter,” which translates to “Step by Step, Ferociously”.

3. Be the buyer of choice

Our offering in the private equity sector is distinct. In fact, we prefer the designation of a purpose-driven holding company over the term private equity, which is often associated with aggressive, quick-turn strategies and excessive leverage. This distinction is a major advantage in acquisitions, allowing us to approach sellers differently. Rather than imposing immediate staff reductions, burdening the company with debt, or forcing mergers, we aim to collaborate with and support the existing team.

While we guide our portfolio companies’ evolution using The Purpose Playbook, our primary goal is to enable high-performing businesses to sustain their performance. This unique approach was a deciding factor for the seller of Gerald Printing, who specifically cited our “un-private equity” model as a reason for choosing us as his buyer.

4. Decentralized control combined with a lean fund team

We maintain a lean fund management structure, with Raj and me as the only active members, supplemented by a network of contractors and partners. Our core belief is in empowering the leadership teams of our portfolio businesses. We grant them decision-making authority, recognizing that every company, team, and industry is unique.

Rather than building a large, micro-managing fund team, our strategy is to work with leadership to implement The Purpose Playbook, grant them autonomy, and then quickly step back.

The flywheel is beginning to turn (an update on 2025)

Coming out of 2024, a year we referred to as one in which our focus was “holding serve,” we knew 2025 had the potential to be equally challenging. Amid economic uncertainty and global inflation, our focus has been on obsessing over customer satisfaction, controlling the bottom line, ensuring we are prepared for the eventual pickup in growth, and always thinking through a long-term lens.

We feel proud of how the teams at Gerald Printing and Alloy have performed against those goals, and below you will hear from their CEOs (Jennifer Oaks and Raj Choudhury, respectively) on their progress.

Speaking of those two CEOs, if there was any marker that we are succeeding in our goals thus far, it’s the high caliber of Raj Choudhury and Jennifer Oaks. I’ve said enough about Raj’s brilliance over the years, so let me say a word about Jennifer Oaks.

In May of 2025, after an 18-month period during which I served as the interim CEO of Gerald Printing, I promoted Jennifer to CEO. I can confidently say it was one of the wisest decisions I’ve made over the course of my career, the only negative being that I did not make it sooner.

In the short time she has been CEO, Jennifer has completely restructured the company’s operations, including strengthening her leadership team and realigning the six offices across Kentucky and Tennessee. Her energy, passion, and moral compass are just what we need, and I’m excited to see her thrive over the next several decades. (Yes, when I talk to Jennifer about our plans, I constantly remind her that I expect to partner with her for decades.)

Jennifer and Raj have set an incredibly high bar for all future Purpose Group CEOs.

I’ll add one more thing here, which is that it has been exciting to see these two teams work together, something we’ve always encouraged with our portfolio companies. Their leadership teams meet annually and have been consistently working on projects together.

Gerald Printing & Liberty Imaging (from Jennifer Oaks, CEO)

The focus for Gerald Printing and Liberty Imaging in 2025 was stability, alignment, and building a foundation we can truly scale from.

Early in the year, we were very clear-eyed about the reality in front of us. Revenue pressure from the prior two years, continued margin compression across the industry, and rising customer expectations meant that business as usual was no longer an option. We spent the first part of the year focused on tightening execution, improving accountability, and getting honest about what was working and what was not.

Once I took over as CEO in May, I knew my first responsibility was not growth at all costs, but clarity. Clarity in leadership, clarity in expectations, and clarity in how our teams worked together across locations. We made intentional decisions to simplify our organizational structure, elevate the right leaders, and ensure that decision-making occurred closer to the work.

That work is ongoing and, at times, uncomfortable, but it has been necessary.

As part of this effort, we strengthened our executive leadership team and clarified accountability across the organization. Shane Hayes was promoted to President of Sales and Growth, with a clear mandate to lead revenue strategy, customer development, and sales execution across all markets.

Rebecca Pennington was named Chief Marketing Officer, with her role officially beginning in January 2026. Rebecca had been the last remaining Vice President operating at the office level, and this transition marked an intentional shift in both leadership structure and focus. Elevating her into a companywide role reflects the importance of brand, demand generation, and long-term positioning as we move forward.

We also made a deliberate change in how our offices are led day-to-day. Rather than relying on Vice President titles at the local level, each location is now led by either an Operations Manager or a Sales Manager, depending on the office’s production capabilities. This structure places ownership, accountability, and decision-making directly with the leaders closest to execution, while allowing flexibility based on each location’s operating model.

A major theme throughout 2025 was operational discipline. We made meaningful progress improving workflows, consolidating production where it made sense, and aligning capacity with demand. At the same time, we are realistic about the fact that our processes are not perfect. Some are still being built, while others are being corrected in real time. The important part is that we are moving forward with purpose and learning faster than before.

We were also deliberate in our approach to equipment and capital investments. Rather than chasing growth through new purchases, we focused on better utilizing what we already owned, relocating equipment where it made the most sense, and ensuring any capital decisions were justified by real operational need. This discipline allowed us to protect cash while still improving throughput and service levels.

We made meaningful progress in financial discipline and visibility. Throughout the year, we focused on tighter billing practices, clearer reporting, and a stronger understanding of how day-to-day operational decisions impact cash and profitability. While this work is still evolving, we are far more informed and intentional than we were a year ago.

Culture followed a similar path. While we have come a long way in moving from a mindset of individual offices operating independently to a more unified One Team mentality, we are not finished. Trust takes time. New habits take repetition. We still experience friction, miscommunication, and moments where we fall short of our expectations. What has changed is how we respond. Teams are more willing to work through issues together, and leaders are increasingly aligned around shared outcomes rather than individual wins.

We invested heavily in our leaders by clarifying roles, raising expectations, and spending significantly more time on coaching, feedback, and accountability. This included difficult conversations, clearer decision rights, and a stronger emphasis on how leaders support their teams rather than just the results they deliver. While this work is ongoing, it has meaningfully strengthened our leadership bench.

The print industry remains highly competitive, and 2025 continued to test us. We didn’t solve everything. We didn’t get everything right. But we showed up, we made progress, and we committed to doing the hard work required to build something sustainable.

As we look ahead, I’m confident not that everything is perfect, but that we are working to improve every day. The foundation is stronger, the team is more aligned, and we have a clearer understanding of who we are and how we want to operate. We are building this company intentionally and together.

I am grateful for the trust placed in me this year and for the people who continue to lean in, challenge assumptions, and care deeply about the work. The progress is real, and so is the opportunity ahead.

Alloy (from Raj Choudhury, CEO)

Alloy hit a hot streak in 2025. As a reminder, Alloy is a marketing and technology partner designed for the age of intelligence—fusing precise strategy with boundless creativity to solve complex business and brand challenges. Operating at the intersection of insight, craft, and technology, Alloy’s award-winning work spans brand & experience, marketing orchestration, platform innovation, and comms & PR. An Emmy-nominated agency and four-time Inc. 5000 honoree, Alloy has been recognized with more than 20 Top Agency of the Year awards and 10+ Best Place to Work accolades.

Acquisitions and Momentum

A major part of our focus at Alloy is acquiring smaller agencies with capabilities and leaders who will help us achieve our growth goals. And 2025 was a major success for our acquisition strategy.

Our recent acquisitions have significantly accelerated our capabilities and client base, driving strong business momentum. In October 2025, Hot Sauce added Martech capabilities, expanding our technological offerings. Following this, in December 2025, The Partnership Inc. (TPI) brought in a brand campaign, communications strategy, and crisis communications expertise, alongside a significant healthcare account in Naples, FL. Collectively, these strategic additions have resulted in a diverse customer base of 65 new clients, featuring a good spread of revenue and capabilities—an important factor for a modern marketing agency.

This expansion has propelled our growth trajectory, with 2025 revenue up 5.1% organically. Crucially, the commercial agreements secured through our acquisitions are the primary drivers behind our ambitious 2026 forecast. We project a 109% revenue growth from 2025. Based on this, our 3-year CAGR is expected to be 90%, and our 5-year CAGR is projected at 50%. The scale of our operation has also grown, supported by 67 FTE and 8 contractors, totaling 80 specialists across the US, with a high concentration in Atlanta, GA, positioning us well to deliver on our expanded client commitments.

Other Updates

Alloy underwent significant operational and structural changes in the last period. The agency introduced a new Executive Leadership Team (ELT) and Senior Leadership Team (SLT) following a November restructuring. A major focus was on integrating technology and efficiency, with continued investments in AI and workflow automations. This technological advancement has revamped the approach to building websites and digital experiences, using proprietary technology to dramatically reduce time-to-market for complex builds from 4-6 months to an impressive 2-3 months.

Culture remained a central priority, particularly amid rapid growth through acquisitions. Substantial resources were dedicated to integration efforts to maintain cohesion. The annual retreat in October 2025 focused on culture-building and on evolving the business to fully embrace AI, culminating in the internal definition of Alloy as “a marketing and transformation partner for the age of intelligence.” This focus on internal health was reflected in strong employee retention at 87%.

The agency delivered exceptional results in client satisfaction and growth with existing customers. Client retention improved massively to 90%, a significant jump from 64% in the previous year. Alloy achieved 91% of its existing client growth targets and exceeded its client criticality score (4.1 versus a 4.0 target). Brand perception also soared, with a 227% increase in the Brand index score, largely credited to the new Alloy office hosting over 26 events. The new Interlock space, now totaling about 18K Rentable Square Feet (RSF), has proven to be an excellent brand asset (including a full studio and editing suites). We are also looking to sublease the 8K RSF TPI office in Vinings.

Despite these successes, new logo acquisitions fell short, achieving only 26% of the revenue target. As a result, new customer acquisition is identified as a major focus for 2026.

Through our recent acquisitions, Alloy has significantly bolstered its senior leadership across critical functions. New leaders have joined the agency to take on executive-level roles, including a Chief Marketing & Communications Officer focused on driving growth and managing a key account, a Chief Operating Officer dedicated to standardizing operations, IT compliance, and accounting practices, and a Creative Partner focused on elevating our storytelling and pitch development. We have also added a VP, MarTech Integration, to lead and scale our technology offerings, a VP, Strategic Growth, to support agency expansion, and a Head of Content Studio to grow our content creation capabilities. Furthermore, we’ve brought on a VP, Integrated Media to unify our media functions into a large, scaled team, and a VP, Insights & Intelligence, to evolve our proprietary analytics product, enhancing it with advanced AI capabilities for the benefit of all our clients.

Looking Ahead

At a macro level, we view the last two years as disruptive to the agency ecosystem, primarily due to AI; however, the last two years have been marked by uncertainty for our clients’ budgets, which have resulted in weak performance across our sector. We’ve known that AI and new tools will change our clients’ work and how we work, but in 2025, it became much clearer what’s actually happening and how we need to navigate these changes and leverage them.

The agency business model is fundamentally changing; most of the industry hasn’t adapted to its unsustainability. Future agencies won’t scale vertically with team members but horizontally with software (AI/Agentic teams). This shifts us from a knowledge-worker model (scaling with people) to a technology company model (scaling with tech). Agencies still using T&M or role-based pricing are already trapped in a low-margin procurement cycle. Since founding Alloy, I’ve prioritized value-based pricing, converting commercial agreements from T&M/FTE models to value-based retainers or fixed projects.

We generally believe our industry for commodity-type work is going to shrink, and we are moving ourselves away from work that any agency or any AI agentic role can handle without a human in the loop. Instead, we are focusing on complex work, especially work that must be integrated into interconnected ecosystems and regulated industries. We believe few agencies can handle the complexities of that type of work, nor can internal client teams. You’ll notice this positioning from Alloy, along with the sectors we are focusing on. We want to charge into the toughest areas to navigate and where our clients need us most.

Fundraising Strategy

Purpose Group’s strategy is to grow to a size where we can self-fund our investments from the cash flow of our portfolio companies. Until we reach this point, we will consider future capital infusions from existing shareholders or new partners.

There are four ways in which we think about fundraising:

• One-off individual investors. This would be the case if a person or entity approached us to invest significant capital. When this happens, we would certainly entertain the offer.

• Acquisition-specific raises. While we do not expect this to happen frequently, if we identify a company that meets or exceeds all of our criteria, we may decide to raise capital specifically to acquire it.

• Larger raise at a future date. There is always the chance that, once we have a few years under our belt (including several years of financial results), we’d consider a more significant fundraising event.

• Open annual fundraising period. Annually, we open a fundraising period (from December 15th to January 15th) for existing and new shareholders who wish to invest in the fund. During this period, we will also be open to buying back equity if we believe it to be the best decision for the remaining shareholders.

Looking Forward to 2026: Optimistic, but Prepared

2025 was the belt-tightening, conservative year we expected. Both of our teams used the year to double down on their strategic areas of focus–efficiency, customer service, and team unity for Gerald; acquisitions and evolved service offerings for Alloy. While organic top-level growth was hard to come by in 2025, we’re proud of the way the teams have positioned themselves for the future.

If we had a theme for 2026, it would be: Optimistic, but Prepared. We’re confident that the work our teams have been doing to find organic growth will pay off; the only question is when. Both Alloy and Gerald have restructured their growth teams to succeed in the current challenging environment and capitalize on economic tailwinds when they arrive.

At the same time, both teams know that until growth picks up more consistently, they should continue to focus on operational efficiency and sound financial performance.

To that end, we have four main goals for 2026 that apply to both of our portfolio businesses:

1. Continuing to obsess over customers

We know that no matter what is happening in our business, the industries we’re in, or the global economy as a whole, we will be ok if we are obsessed with delivering a valuable service to our customers. This will always be at the forefront of our efforts.

2. Doubling down on net new growth

Net new growth (net new sales for our teams) has been scarce over the last few years. Our teams will continue to search for new and innovative ways to attract and convert new customers.

3. Embracing and leveraging AI

Every industry will be, and most in fact already are, affected by artificial intelligence (AI). Our teams are looking at how AI can help them today and how it may disrupt their industries in the future. Our fund, from our GP team to our LP shareholders, has vast technology and innovation experience, and we expect to be leaders in AI in our industries.

4. Seeking strategic bolt-on acquisitions

Both of our portfolio companies will be seeking attractive bolt-on acquisitions in 2026 and beyond. We believe this is one of the most efficient and strategic ways to grow our businesses, and we have extensive experience to leverage in the M&A space.

Additionally, I should point out that we are, and will always be, focused on capital allocation. Today, this takes the form of debt management, cash flow strategies, and acquisition capital strategies. As our fund grows, Raj and I’s main roles will be CEO partnership and capital allocation.

Conclusion

We ended last year’s letter with this salient line from the late Charlie Munger:

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

We will continue to work hard for our team, our portfolio companies, our shareholders, and the broader world, and will try our best to be as “not stupid” as possible while building Purpose Group.

This year, we’ll end with a Warren Buffett quote that we believe encapsulates our journey:

“Our ambitions have no finish line.”

Jeff and Raj

Purpose Group