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