When evaluating investment opportunities, the Principals intend to study key aspects of prospective portfolio companies, including:
Composition of the board of directors and management, including their backgrounds, track records, venture capital funding, and corporate exercises or mergers and acquisition deals that they have undertaken.
The experience and execution capability of the management team, and its ability to identify product needs, significant market potential and cross-application potential. The management of portfolio companies should preferably have proven records of leadership, in-depth sector understanding, the ability to attract the best people and adapt in dynamic, highly competitive environments.
The exclusive nature of the company’s technology, scope of protection of its intellectual property and the extent of existing and potential competing technologies. The portfolio company should have intellectual property and product differentiation with long term defensibility, first-mover advantages and scalability.
The company’s cash burn rate, cash funding position and ability to mobilize sufficient capital to fund its research and development and other business development work.
The existence of significant entry barriers which will allow the company to build sufficient lead time over potential competitors. Such barriers to entry can come in the form of proprietary technical know-how, patents, capital requirement, market access, regulatory requirements, etc.
The existence of market potential; particularly, segments within industries that have very large market sizes, rapid growth, high profitability, favourable timing, and attractive competitive dynamics.
Sale, merger or listing exit potential within two to three years including follow-on investments.
Scope for collaboration with the Fund’s other portfolio companies to build portfolio synergy through leveraging complementary products/ services, business linkages, partnerships, and management resources and expertise.