The Process
We’re There Every Step Of The Way
HOW WE DO IT
Discovery. The purpose of the initial connection on a project is to determine if your company fits within our scope of interest (what we’re looking for and if we are confident we can help). If it does, there is a high likelihood we can create a financial solution for you through our relationships and expertise with angel funds or debt and equity sources.
All you need to do to start the ball rolling is to provide us with a copy of your Company Overview or enter the information on our Contact Us page. That will get us talking.
Analysis. We do a prescreen of your company and business model to develop a strategy for the best capital structure and source. We match-up to our financial groups that…
• Have the best domain experience and interest in your market
• Are seeking companies attracted to the commercial traction your company has achieved
• Have targeted your geographic area for investment
Selection. We conduct discussions with our top candidates. The application and screening process varies with each of these financing source. We’ve been through the process hundreds of times, and stand beside you as you prepare and present.
Deal. Our job is to see that you secure funding. And that doesn’t happen until your deal closes.
With $1.2B of transactions behind us, we think we’re pretty good at what we do.
WHAT WE’RE LOOKING FOR:
Over the last four decades, SFCG has served as strategic advisors to more than $1.2B in early-stage and middle-market transactions ranging from angel capital investments to leveraged buyouts and recapitalizations.
Early Stage
The first thing we look for is the size of the problem that the you, the entrepreneur, intends to solve. We will need to know the number of people with the problem and the price they would pay for the solution. We have an equation for measuring problem sizes and potential markets.
Second, we investigate the solution that you intend to apply to the problem, and here we look for its elegance. By that we mean, what keeps someone else from doing it along side your launch. Is it protected by a patent or is it first to market or does it have a moat around it that will prevent or delay competition?
Third, our preference for type of venture is one that disrupts a tired old industry. This increases the likelihood that a larger player in that industry would make an acquisition offer for the intruding company once it demonstrates some success. Thus, we have a pretty good idea of our exit strategy as we bring capital into the company.
Fourth is the entrepreneurial team. Ideally there are at least two people – the creative, exuberant, hard-charging, “force of nature” CEO and the measure thrice, cut once, detail-oriented, wizened COO who focuses the company on the core operations. If we cannot have that, we may choose to add the COO to provide wisdom, experience and attention to details to the CEO. Exuberance plus experience in the form of at least two people at the top is the ideal make-up of the entrepreneurial teams that we back.
We have a long history of working with clients to locate early-stage funding sources. Our sources of capital have historically been our group of 100+ accredited investors as well as institutional sources mentioned in our company stories.
Growth Stage (Lower Middle Market)
Our growth-stage financings provide ramp-up funding for companies that have shown solid market potential. We are often asked to raise follow-on capital for the companies we provided the early stage funding, bringing our relationships and expertise to the table.
We are frequently sought after to assist smaller, growth-oriented companies (revenues >$10M+) in acquiring larger companies with creative debt structures, thus preserving the buyers’ equity.