Direct Private Equity Investment Process
Patience and Perseverance
Success in direct private equity investing
requires patience and perseverance. There is no short
cut. This applies for business owners building an established
business, investors seeking to diversify their portfolios
with alternative investments, and investment managers
who serve investor clients and actively seek companies
that are candidates for direct private equity investment.
Balance Ventures is such an investment advisor. We have
the strength, strategy, patience and perseverance necessary
to succeed in direct private equity investing.
Stages in the Direct Equity Investment
Process
Investors who work with Balance Ventures
can expect a long-term perspective and a focus on our
relationship with them in everything we do. We represent
investors exclusively as their 'buy-side' investment
manager in every stage of the direct equity investment
process.
We use a turn-key, disciplined approach in managing
the direct equity investment process, which generally
unfolds in the following stages:
DEAL FLOW -
full-time, active solicitation and screening of business
plans of potential investment opportunities;
INVESTMENT ANALYSIS
- filtering investment opportunities with disciplined
criteria (desired rates of return and risk, deal structures,
management team profiles, etc.);
DEAL STRUCTURE
- innovative, case-specific deal structures designed
to minimize legal liability and tax exposure and maximize
a portfolio company's ability to grow its business and
generate a superior return on the investment;
TERM SHEET/LETTER
OF INTENT - negotiation of investment terms with
target companies on behalf of investors;
DUE DILIGENCE
- analysis of historical financial results, management
assertions and representations, and extensive background
checks for target company management;
COORDINATION OF DEAL
CLOSING - administration and logistics of executing
the investment, including coordination of legal documents
with legal counsel and determination of best tax treatment
with tax professionals;
OVERSIGHT OF FUNDED
INVESTMENTS - implementation of centralized cash
disbursements and financial controls; representation
of investors on portfolio company boards of directors;
monitoring of financial and operating performance; constant
communication with, and decision support for, company
management.
HARVEST OF INVESTED CAPITAL AND
RETURN ON INVESTMENT - managing
dividends and distributions to investors to ensure pay-back
of invested capital and the return on that invested
capital; may include the potential recapitalization
or sale of the portfolio company or our stake in it,
on a case-specific basis.
Our Target Investment Description and Portfolio Strategy
pages give you insight into how we evaluate potential
investments and the criteria we apply to investment
opportunities. We are focused on absolute returns on
the investments we make and are tied to no benchmark
or index when evaluating the performance of our portfolio
companies.
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