KNOWLEDGE GUIDE.
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Theses - How to Ideate:
There are a few ways to Ideate, but the most common type, and the one investors seem to favor is a top down macro view
This means thinking about what is a macro trend you are seeing in the world (ex. Climate Change, Aging older population, On-shoring of manufacturing) and then look at what the consequences are of this trend
What type of businesses are needed to fill these needs in the market?
Who are the most difficult vendors? What is the worst part of the process? How can it be improved? What would you like to see done differently?
Check out this article from Pacific Lake about their industry ideation:
A Practical Guide to Industry Analysis: The 4 + 1 Industry Search Framework | Pacific Lake
Private Company Data:
Some companies (like Grata) use web scaping or other tools to get data on private companies. When you have a thesis, check to see if that type of company exists and if there are enough for targets that you could contact
Most investors recommend having 50-200 targets within a specific industry and that are Search sized companies
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Primary Desired Characteristics
Enduring profitability
Modest growth
Fragmented industry - no dominant players with disproportionate purchasing or pricing power
Limited exogenous risk - potential for economic cycles, regulation, tech, etc. to meaningful hurt business is low
High barriers to entry
Ideally recurring revenue business model
Seconday Desired Characteristics
Exceptional reviews
Expensive and complex integration with customers
Relatively low portion of customers budget
Churn below 25%
Low customer concentration (1 above 10%, 5 above 25%)
Revenue growth is organic (from market growth, price increases, new products vs. acquisitions)
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Deal Sourcing Resources:
Email Campaign Resources:
As deliverability challenges increase, the importance of proper email setup, email warming, and email verification is of the utmost importance at the onset of your search.
Look out for spam traps, and email addresses that can cause issues
Important Outreach Metrics
CTR (Click through Rate)
NDA’s signed
CIM’s reviewed
LOI’s sent
Seller Meetings
*There is no 1-size-fits-all approach. It’s on you to build your own outreach strategy and set realistic goals that match your most honest, authentic outreach strategy.
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Funding Models:
Deal Math:
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RHV Capital
AppWrap
Archipelago Capital Partners
Cerralvo Capital
Anacapa Partners
Reframe Capital
Sage Capital Partners
Next Coast ETA
Peterson Partners
Relay Investments
Housatonic Partners
Blue Frame Capital
Search Fund Accelerator
Operand Group
Ashford Venture Partners
Cromwell Harbor Partnership
Workbench Capital
Hunter Search Capital
Vonzeo Capital
Granite Point Partners
Snowdon Partners
Shore Capital Partners
Feta Fund
Trilogy Search Partners
Partner Ventures
JB46
Istria Capital
Kinderhook Partners
Fruition Capital
Halstaatt Family Legacy
Northspring Partners
Footbridge Partners
Smash Ventures
Goodwin Proctor
Grata
Axial
PrivSource
SourceScrub
Ankney Law
Sidley Austin
Tree and Leaf Partners
The Nashton Company
The Foss Mountain Company
Ravencourt Partners
Relay Ridge Capital
Stanford Graduate School of Business
Thayer Street Partners
Paul Hastings
Live Oak Bank
Beacon
Mainshares
Metabolic Solutions
Drip Capital Partners
Freda Capital
Kiva Capital Partners
White Cedar
Alta Lake Partners
Appleby Succession Capital
Amitz Capital
Ascent Spring Partners
Bema Capital
Beacon Legacy Partners
Blacktop Equity Partners
Blackberry Trail Capital
Birch Heritage Partners
Bridgeway Management
Brickworks Capital
Bonsai Group
Buffalo Point Partners
Camillus Partners
Carson Capital
Crest Lake Partners
Crescent Way Capital Partners
Dekos Capital
Deer Point Partners
Crosswalk Capital
Dhandho Capital
First Light Capital Partners
Founder Legacy Partners
Galanthus Partners
Hive Capital
Heritage Oaks Holdings
Hamilton Hall
Live Spring Capital
Liri Capital
Lionfield Capital
Laurel Tree Partners
Keel Boat Capital
JDXpert
The Next Story
Miller Family Legacy Partners
Melrose Legacy Partners
People First Capital
Inspire Horizons
Parkland Field
Parkhill Capital Group
Osprey Equity
Emerald Square Ventures
Allievo Capital
A Candle Co.
Cedar Lake
BakerHostetler
Parkside Financial
Boulay
HMB Legal
BankProv
Mowery & Shoenfeld
Symphony Risk
Oberle Risk Strategies
Pioneer Capital Advisory
Choate
SMB Law
Viso Capital
Baton
Miller Cooper & Co
Holland & Knight
First Bank of the Lake
Sead Software
Kilpatrick
Miles & Stockbridge
DLA Piper
AllianceBernstein
Centri Business Consulting
Next Gen Partners
Two Bridges Legacy Partners
Marion Equity Partners
CloudStreet Partners
Barn Ridge Partners
MKH Capital Partners
Badlands Capital
Baker Newman Noyes
Broadtree Partners
Rand & Co
Mission Veterinary Partners
PMP Marketing Group
Long Horizon Partners
Radnor Lake Capital
MARS Energy Group
Elmore Companies
Willow Hill Capital
Shad Collective
Ensemble Schools
NCFDD
Boyd Group Services Inc.
4H Group
Fresca Mexican Foods LLC
V Capital Holdings
Engine Capital
Visconti Capital
ARGO-EFESO
Skyharbor Capital Partners
70 West Capital
Streetlight Capital
Buck Jack Capital
Woven Care
Castle Tire
Castle Capital
May Lake Capital
Garnett Station Partners
Garnett Station Partners
Edessa Growth Partners
Tornum Capital LLC
Small Bear LLC
Down Harbor Partners
Whitehall Partners
Bradford Lane Capital
Lullwater & Co.
Cumbria Capital LLC
Gastro Center of Maryland
Maryville Crest LLC
Atlantic Duct Cleaning
J. Tortorella Swimming Pools
FusionSite
rentandes
Local Infusion
Orono Group
Colca Capital
Projetech
Performance Systems Integration
CEC
Semify
ZBS Partners