Investment Criteria

The table below outlines the numerous criteria that we use when evaluating a business. These criteria are a general guide that we use for evaluating businesses and not a set of absolute requirements for our investments.

Company

• Recurring revenue with durable competitive advantages
• Minimum three-year history of profitable growth
• Loyal and diverse customer base with high retention rates
• Strong middle management team and culture that values quality and teamwork
• Readily identifiable growth opportunities

Financial

• Revenues ranging from $5 to $50 million
• Stable and recurring cash flows of at least $1.5 million
• Minimum operating margins (EBITDA) of at least 15%
• Limited capital expenditures and working capital requirements

Industry

• Fragmented niche industries
• Growing markets
• Low external risk factors
• Low cyclicality
• Representative industries include:
  • Healthcare services
  • Light manufacturing
  • Energy services

Context

• Owner/operator seeking to retire without clear successor
• Company in need of additional management and/or board expertise to capture long-term growth opportunities
• Owner/operator in need of liquidity and wishing to diversify personal net worth