We carefully screen investment opportunities to establish whether they are consistent with our investment strategy. Specifically, we look for the following characteristics:
REVENUE GROWTH: Does the company have long-term internal revenue growth potential? Is the market for the company's service or product growing? Is there a legitimate opportunity to acquire other firms in the same industry on attractive terms?
RECURRING REVENUES: Does the business generate recurring revenues from customers? Over what period of time do customers re-order? What is the rate of customer churn? Why do customers switch?
STRONG MANAGEMENT: Does the team have a clear plan for growing the business? Are the key members of the team in place? Is the management team investing personal capital alongside investors?
HIGH EBITDA MARGINS: Does the business have attractive and sustainable operating margins? Does revenue growth produce operating leverage?
MODERATE CAPITAL INTENSITY: What are the working capital and capital expenditure cycles and requirements? What is the return on tangible capital for the business?
We seek to invest in and build companies in cooperation with experienced and entrepreneurial managers. We typically play active roles on the Boards of Directors of our portfolio companies, working with management to formulate company strategy, develop operating budgets, arrange additional financing rounds, and identify and recruit seasoned operating executives and Board members. We do not get involved in day-to-day operations, but rather support strong management teams whose incentives are aligned with our own. In every transaction we seek to forge lasting, career-long relationships with our portfolio company managers.
Comments from CEOs we work with