We focus on companies run by long-standing, successful entrepreneurs
- Annual revenue of $3M or more
- $1M to $5M EBITDA
- Sellers offering majority company interest only
- Continuous positive cash flow for three years or more
- Diverse and growing customer base with high retention levels
- Minimal ongoing capital expenditures required
Steady, growing firms in established sectors
- Services, software/technology with minimal manufacturing
- Large and growing industry in a fragmented market
- Non-cyclical industries that display little, if any seasonality
- Low threat of exogenous shocks (e.g. obsolescence, regulatory, legal, environmental, fads, etc.)
- Identifiable growth opportunities
Shareholders looking to divest or exit
- Owner seeking liquidity or exit
- Motivated sellers
- Retiring owner/operator without a successor in place
- Owner desired a more focused role (e.g. technical sales, board seat)
- Serial entrepreneur ready to transition to the next venture
- United States domestic companies only
Our Transaction Focus
Where we play and how we do it
We work directly with growing companies, special situations and buyout opportunities. Giving up a portion of your business for a sponsored minority or majority stake can be a great way to finance growth while concurrently assuaging your company’s diversification risk. We work directly with private equity groups (PEG), high net-worth individuals and corporate investors to find the right fit for an ownership stake in the business. This type of financing arrangement has a number of specific benefits including:
Enhanced input from outside management expertise. Many private equity firms work directly as secondary management, helping to consult the business to its next level of growth. Risk mitigation through better diversification. Entrepreneurs avoid the risk of holding all their assets in a single business by allowing an equity investment to take some money off the table to invest in other more liquid assets. Growth equity investments bring deeper pockets. Growth often takes capital which cash-strapped small businesses are unable to access. Equity investments can help ensure businesses capitalize on growth opportunities by investing with greater resources. Our partner network of private investors brings a strong investment approach to every management buyout opportunity. Whether you’re looking to finance a full or partial buyout of your business, reputable and willing investor buyers can help assist in the buyout.
Like any other approach to financing, the structure of private equity investment deals can be as broad and diverse as the businesses themselves. Numerous and varied methods exist for funding, growing and buying existing businesses and their assets with private funds. Our partners work strategically with owners in equity financings for a strategic growth, merger and acquisition opportunities, co-investment deals in sponsor-led transactions, add-on investments with debt-augmentation, limited liability partnerships and private placement deals. When determining the type of financing needed, our partners take a holistic approach--assessing industry trends with individual company historical performance.
Each method of financing carries with it its own version of risk/return trade-off. And depending on the type and timing of an equity investment, investors will require different portions of the company pie. Private equity, venture or angel investments in startups tend to exact greater equity at the outset. Equity investments in later-stage companies represents a smaller risk for the investors and thus a smaller portion of the equity in the business. Private equity at any stage has particular advantages.
One of the greatest advantages of obtaining private equity funding is the assistance obtained from equity investors. Equity investors are often experienced and knowledgeable managers who can aid consulting input and assistance to both fledgling and prosperous businesses alike. Unlike debt financing, equity owners are share in the gains and not just the pains of the business cycles. This helps align goals of management and investors to ensure growth occurs. Furthermore, private equity financing takes away the risk of a bank securing your home or other assets as collateral in a loan. This can help alleviate some of the risk of capital procurement from the owner founder.
Building outsized returns for individual and institutional investors is what private equity is all about. Some might argue many private equity investments of recent vintage have failed to provide returns commensurate with investor mandates, but there are always outliers and exceptions. Typically private equity investments which perform well have a very tight, developed strategy. They find niches where value is being left on the table and find a way to further maximize theirs and their clients’ goals.