Target Investment Description
Target Company Profile
Balance Ventures' target investments are small or medium
size, privately-held companies with sales in the range
of $2 million to $30 million per year. Target companies
are usually in non-cyclical industries with established
product acceptance, product recognition, and product
endurance in their respective markets.
A target company generally has normal working capital
needs and usually has immediate capital expenditure
needs to support long-term growth. It has no history
of significant labor/employment issues, environmental
exposure, or legal problems that have distracted the
management team from its focus on growing the business.
It is not near bankruptcy or in 'workout' or 'turnaround'
Balance Ventures actively cultivates leads from its
network of various business relationships for introductions
to entrepreneurs who may or may not be looking for investment
capital or whose businesses may or may not be for sale.
We make direct contact with these entrepreneurs to inquire
of their plans for growing their businesses, to discuss
their financial needs in achieving their goals or desire
to plan for succession, and to explore the possibility
of partnering with us to reach those goals.
Target companies are usually in Texas and the Western
United States, though we review excellent investment
opportunities from other regions of the U.S. and from
Balance Ventures seeks investments in established, 'old
economy' companies. Early-stage, gene-splicing startups
may be better served by a seed-stage or angel investor
or traditional venture capital firm. Most of our target
investments are in manufacturing, consumer products,
media and marketing/distribution businesses. We also
target investments in ancillary businesses that provide
marketing, production, distribution, and administrative
or other synergies for existing portfolio companies.
of Target Companies
Balance Ventures prioritizes investment opportunities
in companies with cash flow and strong balance sheets.
Ideal target companies can support some leverage (debt).
Target company revenues should be diversified among
a large customer base, or any concentration of sales
among a few, large customers should be mitigated by
verifiable, stable, long-term relationships with those
customers. Target company cost structures should provide
economies of scale to achieve improved gross margins
and operating margins with any incremental growth in
Every direct private equity investment requires a unique
approach and a unique structure, depending on the goals
and desires of the owner/manager/entrepreneur and of
Balance Ventures and its investor clients. Therefore
we negotiate the terms of each deal structure (e.g.,
amount of capital invested, ownership interests of the
various stakeholders, and provisions for how and when
these stakeholders will get paid) before executing the
investment in the target company.
Capitalization of the acquired company immediately after
the investment may include varying proportions of seller
financing (through a note receivable or milestone earn-out),
bank debt, subordinated debt, direct private equity
from Balance Ventures and its investor clients, and
management equity (from the existing owner/manager).