What We Look For
A Large Market Opportunity
We look for companies with a market opportunity that is large enough to provide ample room for growth over several years. In addition, we are particularly attracted to companies that have positioned their products or services to capitalize on major structural changes within their target markets.
A Clear Sustainable Competitive Advantage
A company must be able to articulate a simple, clear business plan that explains why it will be a winner and how it can sustain a winning position over an extended period of time. We look for sources of competitive advantage based on unique market position, a novel competitive strategy, specialized expertise, patents, trade secrets, or similar.
Stellar Management
We believe strongly that even a great idea has little value unless there is a great management team to turn it into reality. We look for experienced management that has domain expertise in the company’s business area, a track record of prior success, and the drive and passion needed to overcome the many inevitable obstacles on the road to success.
An Attractive Financial Model
We expect a company’s management to provide an attractive but realistic financial model that shows how it will make money, how much capital it will need, and how value will be created for investors. We look for businesses that can deliver strong margins, have low to medium capital intensity, and a high degree of financial and operational scalability.
High Exit Potential
In evaluating any investment, we carefully consider the available avenues for the company to achieve a successful exit. We are attracted to investment areas where strong valuations exist for comparable public and private companies. We also look at the history of M&A activity in the specific investment area and the number and quality of potential acquirers. Finally, we also prefer to see that a company is addressing a large enough market opportunity to make a future IPO a meaningful possibility.