PROCESS

Two major factors get us excited about an investment opportunity: A compelling business plan and connecting it with the entrepreneurs who came up with it. Sure, we want to invest in people with the vision to go after compelling business opportunities. But in addition to grasping unique business opportunities, we need to relate to the people who spearhead the business. Usually we receive a business plan and/or executive summary before meeting with the management team. Then we spend time with the team to assess whether the company meets our investment criteria and, just as importantly, whether we feel we can work effectively with the entrepreneurs in the good times – and the uncertain times. Once we have met with the management team, we generally need to conduct professional and customer references, market and financial analysis, and negotiate the terms of investment. This process, depending on our other commitments and the opportunity at hand, can take from several weeks to several months. We make investment decisions as a team, with one Principal coordinating the process.

CRITERIA

This is what we’re looking for:

• Companies whose focus is on health care, information technology, wireless infrastructure and Internet technologies and services.
• Driven entrepreneurs who have the vision to see what is possible – and the capability to make it happen.
• Large, growing markets that can support the long-term growth of a new company and potential multiple players.
• Proprietary products or services that allow for significant revenue growth and strong profitability as that growth is attained. Multiple barriers to entry, few competitors and first mover advantages are the factors that may affect a company’s opportunity for strong revenue and profitability growth.
• Ability to access the public markets in the future for growth capital and ultimate investment liquidity.
• Most investments will be in established companies requiring expansion capital.

You must be able to answer the following questions in the affirmative:

• Is the management team strong with relevant experience and subject-matter expertise?
• Does the management team have the ability to assess the marketplace continually and respond accordingly?
• Does the company have the potential for a significant impact on its target customers?
• Is the market opportunity large with the capability to support multiple players?