Strong Management
A highly qualified management team is an essential success factor in any company. We intend to invest only in companies managed by health industry professionals with expert knowledge of their business niche and the proven ability to work well together in directing a growth stage company. The management team should also have the leadership ability to execute exit strategies defined at the time of investment.
Cost-Effective Products or Services
We focus on companies seeking to develop more effective, less expensive products are services, which reduce the need for surgery or hospitalization and which provide higher quality care at lower cost.
Proprietary Position
We seek companies whose innovative products provide demonstrable competitive advantages. Such products should be based on proprietary technology or specialized service expertise and should meet significant market needs. In-depth review of patent portfolios is a standard part of our due diligence.
Competitive Advantage
The prospective portfolio company’s products or services should have a competitive advantage in the market place. This requires thorough assessment of known products and products under development based on similar or competing technologies. Therefore, competitive assessment of technology is a critical focus of our due diligence.
Favorable Market
A company’s products or services should address a market characterized by favorable relationships among the variables of size, growth potential and competitive factors. The company’s marketing strategy should be clearly defined and should be consistent with a large or rapidly developing market.
Attractive Investment Terms
The pricing and structure of the investment terms must allow the Fund to meet its investment objectives in the time horizon of our investment. We seek to achieve at least a 3X return of capital with an average holding period of 4 years. Therefore, valuations must be in line with the company’s stage of development, financing history, market conditions, and capital appreciation opportunity.
Appropriate Capitalization
The size of the investment round in which we participate must allow the company to implement its strategic plan. Too often, under-capitalization creates extraordinary risk.
Multiple Defined Exit Strategies
It is our strategy to define multiple clear alternatives for realizing investment returns at the time of investment. Exit strategies may involve sale of securities through initial public offerings, secondary public and private offerings, sales in connection with strategic alliance/corporate partnering transactions, or merger and acquisition transactions. We believe in taking our paid-in-capital off the table when possible.
