Introduction
At Ironwood Investment Management, LLC, we believe that diligence is one of the defining factors that sets thoughtful investors apart in small-cap investing. While data analysis and financial modeling are vital, we find that the most valuable insights often come from seeing the businesses we invest in up close: meeting leadership teams, touring facilities, and understanding operations firsthand. This approach provides us with a deeper appreciation for how companies create value, navigate challenges, and position themselves for potential growth.¹
Why Diligence Matters in Small-Cap Investing
Small-cap companies often operate under the radar. They can be early in their growth trajectories or focused on specialized markets that require a nuanced understanding to evaluate properly. Because their stories are less told, investors cannot rely solely on financial statements or quarterly reports to assess their long-term potential.
Diligence allows us to bridge that gap. By engaging directly with management and observing operations firsthand, we gain insight into a company’s strategy, culture, and execution capabilities. This approach helps us form an informed perspective about whether the business is positioned to capitalize on potential opportunities in its sector.²
Through this disciplined process, we strive to identify companies that not only demonstrate strong fundamentals but also exhibit leadership and innovation aligned with sustainable, long-term value creation.
Research in Action: Visiting Aspen Aerogels
A recent visit to Aspen Aerogels, headquartered in Massachusetts, exemplified the importance of this research-driven approach. Our team had the opportunity to meet with Neal Baranosky (Investor Relations), Donald Young (President & CEO), and Grant Thoele (CFO & Treasurer). Speaking directly with company leadership provided meaningful insight into how Aspen Aerogels is advancing its strategy and operations.
The visit included a tour of the company’s manufacturing facilities, offering firsthand visibility into its production capabilities and technology platform. Seeing the operations in person allowed us to better understand how the Aerogel Technology Platform® supports multiple applications, from energy infrastructure to electric vehicles.³
Aspen Aerogels’ innovation in electrification and sustainability aligns with major trends shaping the global economy, including clean energy and resource efficiency. While financial reports can illustrate metrics and forecasts, being on-site deepens our perspective on execution quality, product differentiation, and management vision.
This type of diligence reinforces our belief that long-term investing success is driven by understanding the people and processes behind the numbers.
A Disciplined Approach Rooted in Research
At Ironwood, the investment philosophy of our Small Cap Core Strategy (SCC) has always centered on discipline and research. We take a bottom-up, fundamental approach, carefully analyzing each company’s financial health, management quality, and strategic positioning. Site visits, management interviews, and on-the-ground engagement are extensions of that research discipline.
By combining quantitative analysis with qualitative understanding, we aim to recognize businesses with strong governance, innovative capacity, and sound financial frameworks. We believe this multi-dimensional approach allows us to identify potential opportunities that might be overlooked by investors relying solely on secondary data.
The diligence-driven process of our SCC strategy also provides an opportunity to evaluate environmental, social, and governance (ESG) considerations firsthand. Observing how a company manages sustainability initiatives, employee safety, and community engagement helps us gauge long-term resilience and alignment with broader market themes.
Connecting Diligence to Performance Track Record
While we avoid making forward-looking predictions, we believe that consistent diligence has contributed to Ironwood’s long-term performance track record. Our emphasis on engagement and firsthand evaluation enables us to make investment decisions grounded in conviction and understanding.⁴
Over time, this consistency builds a foundation for clients who value transparency and thoughtful portfolio construction. Diligence also provides context during periods of volatility: when markets fluctuate, our familiarity with each company’s strategy and leadership helps us maintain perspective and make informed adjustments where necessary.
In our experience, there is no substitute for being there, meeting the people behind the business, understanding how they think about risk and opportunity, and seeing how their strategic plans translate into real-world action.
Why Work with Ironwood Investment Management, LLC
At Ironwood Investment Management, LLC, diligence is more than a step in our process; it is a core philosophy. We believe that understanding companies deeply is essential to aligning investments with clients’ long-term goals. Our disciplined research framework, combined with direct engagement, helps us uncover potential opportunities and build informed perspectives across sectors and market cycles.
By emphasizing transparency, research, and integrity, we aim to deliver value beyond numbers, helping clients navigate an increasingly complex investment landscape with confidence and clarity.
For investors seeking a team that takes the time to understand each company’s story and the forces shaping its future, we invite you to learn more about our approach.
Ready to take the next step?
To explore how Ironwood Investment Management, LLC’s research-driven process can help identify potential opportunities aligned with your investment objectives, visit our website or contact our team to start a conversation.
📞 Book a Free Consultation with Ironwood Investment Management, LLC [HERE]
Additional Ways to Contact Us:
Phone: (617) 757-7600
Email: info@ironwoodfunds.com
Website: https://ironwoodinvestmentmanagement.com
Footnotes
¹ “Investment Due Diligence: The Foundation of Informed Decision-Making,” Journal of Portfolio Management, 2023.
² “Small-Cap Companies: Understanding Growth Potential Through Qualitative Analysis,” CFA Institute Research Briefs, 2024.
³ Aspen Aerogels Investor Relations Meeting Notes, Ironwood Research Archive, 2025.
⁴ “Long-Term Investing and the Value of On-Site Research,” Investment Strategy Quarterly, 2023.
People Also Ask (FAQs)
What is the role of diligence in small-cap investing?
Diligence helps investors gain firsthand understanding of small-cap companies, providing insights beyond financial statements to identify potential opportunities.
How does Ironwood Investment Management, LLC approach small-cap investing?
Ironwood applies a disciplined, research-driven process that includes direct engagement with company leadership and operations.
Why visit companies like Aspen Aerogels in person?
On-site visits offer a valuable perspective on management execution, innovation, and sustainability efforts that can’t be seen in data alone.
How does diligence strengthen Ironwood’s performance track record?
Diligence reinforces informed decision-making, helping Ironwood maintain a consistent, research-based investment process aligned with client goals.
Important Disclosures & Disclaimers
Performance Statistics – as of Q3 2025
This blog post is for informational purposes only and should not be construed as investment advice, a recommendation to buy or sell any security, or an offer of investment advisory services. All investments involve risk, including potential loss of principal. Past performance does not guarantee future results. Small-cap investments may be subject to higher volatility and additional risks compared to large-cap investments. Please consult with qualified financial professionals before making investment decisions. Ironwood Investment Management, LLC is a registered investment adviser. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.
Ironwood Investment Management®, LLC (Ironwood) is an independently managed investment advisory firm providing investment advisory services to institutional clients, mutual funds, and high-net-worth clients.
The firm is a registered investment adviser with the Securities and Exchange Commission. SEC Registration does not imply a certain level of skill or training.
Accounts in the Small Cap Core composite include separately managed, fully discretionary, fee-paying portfolios. Portfolios are invested in undervalued securities, the majority of which will have market capitalizations under $2.5 billion at cost, including securities with growth and/or value characteristics. Securities are considered undervalued when management believes the current share price does not accurately reflect the long-term economic value of the underlying company.
Ironwood Investment Management, LLC claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Ironwood Investment Management, LLC has been independently verified for the periods January 1, 1999, through December 31, 2021. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis.
The Small Cap Core composite has had a performance examination for the periods July 1, 2002, to December 31, 2021. The verification and performance examination reports are available upon request. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
The creation date of the composite: July 2002. Performance inception date of the composite: January 1, 1999. Prior to July 2002, portfolios were included in the composite when at least 75% of the portfolio was invested in equity securities and when at least 75% of the portfolio was invested according to the investment style of the composite. Subsequent to July 2002, portfolios are included in the composite after the first full month of being fully invested.
Returns are presented gross and net of management fees and include the reinvestment of all income. Net returns are calculated based on the highest fee of 1.00%. Investment management fees are 1.00% on the first $25 million, 0.90% on the next $25 million, 0.80% on the next $50 million, and 0.75% over $100 million on an annual basis, and a client’s return will be reduced by these and other related expenses. The actual fee charged to an individual portfolio may vary by size and type of portfolio and may be negotiated. Actual investment advisory fees incurred by clients may vary.
The Russell 2000 Index consists of the 2000 smallest stocks in the Russell 3000 Index, representing approximately 8% of the U.S. equity market capitalization. The indices have been reconstituted annually since 1989. Ironwood returns and Index performance reflect reinvested interest income and dividends in U.S. dollars.
A list of composite descriptions and a list of limited distribution pooled fund descriptions are available upon request. Past performance is not indicative of future results. Policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request. Prior to May 2006, the Firm was known as Ironwood Capital Management, LLC.
Past Performance is Not Indicative of Future Results
The performance data provided in this blog reflects past performance, which may not be representative of future results. Investing in small cap stocks and other securities involves substantial risk, including the potential loss of principal. There is no guarantee that any investment strategy will be successful.
Forward-Looking Statements
This blog contains forward-looking statements, including expectations or forecasts about the performance of the market and specific securities. These statements are based on Ironwood Investment Management, LLC’s current beliefs and expectations but are subject to change without notice. Actual results may differ materially from those expressed or implied due to various risks and uncertainties, including market conditions, economic factors, and changes in government policy.
No Offer or Solicitation
This blog is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities or investments. It is not intended to provide investment advice or to serve as a recommendation regarding any investment strategy. No client-adviser relationship is formed by reading this blog.
Conflicts of Interest
Ironwood Investment Management, LLC may hold positions in or recommend securities discussed in this blog. Clients should carefully review any investment strategy before committing to ensure it aligns with their investment objectives and risk tolerance.
Regulatory Disclosure
Ironwood Investment Management, LLC is a registered investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.