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 Qualitative Evaluation

After a prospective investment passes our quantitative evaluation, we work with the Deal Partner to assess the qualitative components of the opportunity.

We invest in companies with a competitive advantage that is the result of a unique design, highly-efficient manufacturing process, proprietary supply chain, or an unrivaled distribution channel.  In addition to having a pronounced competitive advantage, companies must also demonstrate identifiable avenues for growth.

As part of this evaluation we examine the following factors: 

Customers, Suppliers and Competition

What is the basis by which customers choose suppliers?  

What is the degree of customer loyalty?  

How financially strong are customers and competitors?  

How easily can customers multi-source product?  

Are there opportunities to acquire (or be acquired by) competitors?  

Can cost increases be easily passed along to customers?



Growth Potential

What are the size and the growth prospects for the market/industry?

What are the barriers to expanding market share?  

What are the marketing and sales dynamics of the industry?

Can the company raise prices?  

What are the capital costs and payback period for expanding capacity?  

Is there potential for the company to expand into related markets?


Management

How capable is the CEO?  

Is this CEO the right individual to grow the company going forward?  

How deep is the management team?  

What management resources is the company lacking?  

What is the level of management and employee loyalty?


Operations

What financial controls are currently in place?  

What is the sustainability and growth potential of profit margins?  

What are the drivers of product costs and how thoroughly does management understand these drivers?

At what sales levels will capital improvements be required?  

What is the adequacy of current plant layout?  

What are the key performance metrics?


 
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