Target Company Characteristics:

  • Top-line Revenue: $1 - $5 million (we love businesses with recurring revenue)
  • EBITDA: $0-$1 million with potential EBITDA margins of 10%+ 
  • Annual Revenue Growth Rate: 50%-100%+
  • High Gross Margins: 60%+
  • Capital Efficient: typically bootstrapped to-date (have raised no outside capital), company is near break-even or cash flow positive already (or will be within 12-18 months)
  • Business Stage: core business model proven with significant potential to scale and new business lines already piloted successfully that have massive potential
  • Organical Growth: little to no marketing spend to-date (customers found them and/or the company was scrappy and found ways to market for next to nothing)
  • Market Position: Niche or market-dominant businesses
  • Meaningful Founder/Executive Ownership: 50%+
  • Location: Mid-Atlantic region (with focus on Baltimore City based companies)
  • Strong Management Team: typically founders/executives with strong product knowledge and vision

Target Investment Characteristics:

  • Capital Seeking: $1 - $2.5 million (with assumption that no additional equity capital will be needed in future unless at very favorable terms)
  • Board seats: number of seats commensurate with stake acquired
  • Preferred return: 10% per annum
  • Stake acquired: meaningful minority stake (20-40%)
  • Negative control provisions and approval rights (to mitigate risks of minority position) on company debt levels, acquisition offers, etc.
  • Protective Provisions: right of first refusal on future capital raised, anti-dilution provisions, etc. 
  • Shared alignment, vision, and timeline. We do not invest out of a fund with a defined period (typically 5-7 years) which allows us to take a much longer term view and do what is best for all of the company's stakeholders (we are fine with holding onto an investment if it is throwing off cash). Our investors choose each deal that they invest in...which we believe further ensures alignment. 

Sector Focus:

We will look at companies in any sector but we typically only consider companies where software is critical to their business (if not their core product offering)

  • Business Products & Services
  • Enterprise Software
  • Media & Entertainment
  • AdTech/Marketing Tech
  • E-Commerce
  • HealthTech
  • EdTech
  • FinTech
  • Cyber/Big Data