Sydney Hylton

We have been wrong before. We will be wrong again.

That is not just a disclaimer. It is the foundation of how we think about investing and how we strive to get better.

Growth equity investing requires conviction, but conviction without humility is just stubbornness. Many of the successful investment decisions we have made have come from a willingness to keep learning: about a company, about an industry, about our own analytical biases. 

We recognize that we will never have complete information on any given decision. Every decision, including not to act, is based on an inherently uncertain future. We act on the best available evidence rather than wait for certainty that never comes and are open to changing our minds when the core facts change.

We process new information every day, whether about a company, stock, industry, economy, or region. We seek to manage the risk of the unknown through position sizing or deciding to pass on a prospective investment entirely.

These hard-earned lessons have been specific:

• Share prices can detach dramatically from business execution in the short term.
• Incumbent industries are more durable than they appear.
• High entry prices leave little margin for error.
• Visionary founders are not necessarily infallible stewards of capital.
• Durable businesses require positive unit economics and a visible path to increasing profitability and cash flow.
• Holding is an active decision; staying invested carries the same burden of conviction as buying.

We work to minimize these risks, but errors and the resulting learnings are part of the process. We will not get every decision right. Baseball offers a useful analogy. A high hit rate, being right more often than wrong, sounds appealing.   In investing, frequency of correctness matters less than magnitude. A portfolio that is right 40% of the time but generates outsized returns on those wins will outperform one that is right 60% of the time but earns modest gains. We focus on slugging percentage, the size of the outcome when we connect, in pursuit of investments that can truly move the needle.

Humility in investing is not about lacking confidence. It is about staying curious, staying honest, and never stopping the work of improving our judgment.

Our history has given us a lot to learn from. We intend to keep learning.

Investing in securities involves the risk of loss. Past performance is not a guarantee of future results. The securities identified and described do not represent all the securities purchased, sold, or recommended for clients’ accounts. The reader should not assume that an investment in the securities identified was or will be profitable. This material is intended for general informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. It does not consider the specific investment objectives, tax and financial condition or needs of any specific person. This content is developed from sources believed to be providing accurate information. While reasonable care has been taken to ensure that the information herein is factually correct, Zevenbergen Capital Investments makes no representations or guarantee as to its accuracy or completeness. The opinions expressed herein are subject to change at any time without notice.

Markets are short-sighted by nature. Prices move daily, driven by earnings, macro headlines, and sentiment shifts that have little to do with the long-term trajectory of a business. That noise drives short-term reactions, but we rely on patience. 

Our approach is simple: we care about where a business is going, not just where its stock price is today. Revenue growth is one of the purest indicators of customer demand and business health, and earnings and cash flow follow. The factors that drive shareholder value play out over years, not just a single quarter. Holding that view requires conviction that short-sighted investors can be unwilling to follow through on.

Investors typically think about risk as the probability of losing money. We think there’s another side to risk that is underappreciated: the risk of missing a significant wealth creation opportunity. Both are real and both are costly; managing only one of them is not enough.

That framing changes how we ask questions. Rather than focusing on what could go wrong, we focus on what could go right. We evaluate every investment on a five-year horizon, which we believe is long enough to let a great business prove itself and overcome the noise that can dominate short-term thinking.

We start by evaluating thousands of companies. We narrow that list through deep, ongoing research into financial and non-financial growth drivers, upside and downside scenarios, and a deep understanding of what makes a business durable. What remains is a portfolio where each holding is held with high conviction.

The companies we are drawn to are often led by visionary founders who are challenging norms and building something that doesn’t yet have a clear comparable. We believe the market can misprice these businesses because it is focusing on the wrong horizon. When sentiment turns and prices fall, the short-term reaction can be quick. We have learned that these moments can be opportunities rather than decisions.

We’ve held through moments when a company’s stock fell sharply on a strategic misstep, trusting our read on management and the long-term opportunity over the short-term reaction. Our confidence in management teams and their ambition to grow companies compels us to hold through the short-term volatility.

During seasons of heightened market or single stock volatility, we work to take a step back from the noise and hone our focus on the long-term and our confidence in management teams.

Companies that look obvious in hindsight also survived tumultuous moments. Many of the companies we have held for a decade or longer over our history have experienced meaningfully drawdowns of 50% or more. These were not comfortable moments, but discomfort and permanent impairment are not the same thing. Volatility carries risk, but given the right time horizon, it can also present opportunity.

Our typical annual turnover is well below peer average which reflects our philosophy well. We sell when our analysis indicates a lasting decline in a company’s fundamental growth potential, not solely due to a stock’s downturn, market anxiety, or disappointing quarterly results. The criteria for exiting a position are identical to those for entering: the business itself.

We believe that the work of identifying whether a business is fundamentally flawed or simply misunderstood creates edge in growth equity investing.

A longer horizon, aligned with our clients, can create an advantage.

Investing in securities involves the risk of loss. Past performance is not a guarantee of future results. The securities identified and described do not represent all the securities purchased, sold, or recommended for clients’ accounts. The reader should not assume that an investment in the securities identified was or will be profitable. This material is intended for general informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. It does not consider the specific investment objectives, tax and financial condition or needs of any specific person. This content is developed from sources believed to be providing accurate information. While reasonable care has been taken to ensure that the information herein is factually correct, Zevenbergen Capital Investments makes no representations or guarantee as to its accuracy or completeness. The opinions expressed herein are subject to change at any time without notice.

The Pacific Northwest has quietly shaped the future for decades.

Washington’s roots started with timber, fishing and natural resources but from that foundation grew national leaders in aerospace, transportation, telecommunications, and retail. Boeing. Paccar. McCaw. Costco. Nordstrom. Starbucks. The region has never been content with staying in one lane. And then came technology. 

Two companies that reshaped how the world works, shops, and connects, Microsoft and Amazon, both started here. The culture of innovation they created didn’t stay inside their campuses, it spread. It attracted talent, ambition, and ideas that continue to reshape industries far beyond the region. But the story of innovation in the Pacific Northwest didn’t begin with those companies and it didn’t end with them. It is a continuous theme running through the region’s identity.

This region is our home, and home, in our case, happens to sit at the frontlines of innovation.  Not as observers, but as neighbors. Far from Wall Street and consensus thinking, the Pacific Northwest has always been willing to embrace new approaches untethered to legacy systems or processes. That independence of thought has shaped how we invest.

These stories are specific and they are ours:

• We have watched category defining consumer brands emerge from ideas that skeptics dismissed as niche or unproven.
• We watched companies scale from single-purpose startups into infrastructure supporting businesses far beyond their original market.
• We have sat across the table from management teams building customer loyalty into a durable competitive moat.

These were not lucky guesses, but reflect the work we put in. We have attended countless bus tours and networking events, keeping us connected to the local start-up and venture capital community, where we can actively engage in the next wave of innovation.

That thinking flows south. The Pacific Northwest and Silicon Valley are interconnected, forming a continuous corridor of ambition, capital, and invention that runs the length of the West Coast. Consumers here tend to be early adopters of technology, from new devices in their pockets, to new ways of getting around, to new ways of shopping and planning travel online. We don’t just sit back and watch, we participate in the changing of technology.    

Proximity is a benefit, but intellectual curiosity is what we bring to it.

Investing in securities involves the risk of loss. Past performance is not a guarantee of future results. The securities identified and described do not represent all the securities purchased, sold, or recommended for clients’ accounts. The reader should not assume that an investment in the securities identified was or will be profitable. This material is intended for general informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. It does not consider the specific investment objectives, tax and financial condition or needs of any specific person. This content is developed from sources believed to be providing accurate information. While reasonable care has been taken to ensure that the information herein is factually correct, Zevenbergen Capital Investments makes no representations or guarantee as to its accuracy or completeness. The opinions expressed herein are subject to change at any time without notice.

Built on conviction and commitment to growth investing, Nancy Zevenbergen founded Zevenbergen Capital Investments LLC in 1987. Her goal was singular: investing in companies she believed were shaping the future and just as importantly, staying invested.

That clarity of purpose has never wavered.

Nancy’s catalyst came as she watched Microsoft Corporation become a publicly traded company. The research she was charged with was a great learning opportunity but more than that, it was when she fell in love with growth companies. She realized exceptional businesses, backed by visionary leaders, could achieve outcomes that defied conventional expectations. That belief became the foundation of everything we do at ZCI, and it’s the same philosophy we bring to our clients’ portfolios today, nearly four decades later.

The years have provided experience that cannot be shortcut. We have weathered major market disruptions: the crash of 1987, the tech bubble of 2000, the financial crisis of 2008, and the pandemic of 2020. Each cycle tested conviction, and each one confirmed it. Time and again, we’ve seen that exceptional companies find a way to prove themselves. We’ve approached downturns as opportunities rather than reasons to retreat, guided by conviction built through direct experience rather than theory.

Through booms, busts, and everything in between, history has proven that innovation is timeless. Time has only served to reinforce the foundations on which ZCI was built: fundamentals drive stock prices, and high-quality founders and management teams are essential to guiding companies toward their highest potential.

People. Process. Philosophy.

Our conviction was not built overnight. It was earned gradually, over years, decision by decision. Our history shapes how we invest for clients today, informed by every cycle we’ve navigated.

Investing in securities involves the risk of loss. Past performance is not a guarantee of future results. The securities identified and described do not represent all the securities purchased, sold, or recommended for clients’ accounts. The reader should not assume that an investment in the securities identified was or will be profitable. This material is intended for general informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. It does not consider the specific investment objectives, tax and financial condition or needs of any specific person. This content is developed from sources believed to be providing accurate information. While reasonable care has been taken to ensure that the information herein is factually correct, Zevenbergen Capital Investments makes no representations or guarantee as to its accuracy or completeness. The opinions expressed herein are subject to change at any time without notice.