Investment Criteria
A time tested approach towards investing
Industry
- Growth industry
- Lack of dominant competitors or customers
- Limited landscape risk (including technology obsolescence, regulatory risk, legal risk, environmental risk, major cyclicality, fads/trendy)
- Low operational complexity
- Profitable, not in decline, and attractive to lenders
Company
- Growth potential via organic sales growth, geographic expansion, product/service extension and follow-on acquisitions
- Strong middle-management willing to remain
- Motivated seller for non-business reasons
- Long product/service life cycles, not subject to rapid technological change or obsolesce or requiring substantial additional R&D
- Product/service differentiation exists or can be created
- Stable contractual relationships
- Reasonable valuation
Financial
- Predictable, stable, and recurring revenue
- History of profitability, currently generating $1-5 million of EBITDA
- Strong EBITDA margins
- Low to moderate capital intensity, creating the ability to generate high returns on tangible capital
- Cash flow and assets sufficient to attract and service proposed capital structure