Below you will find useful FAQs about our Capital Data Center product.
Here are most of the FAQs that include how we went about classifying and listing the companies.
1. How did you find and build one of the most extensive capital databases on the Internet?
A. We spent hundreds of hours scouring the Internet searching each of the capital sources we list. We visited every site, if they had one, and noted all the criteria they list. We continued to type new searches into the various engines until we couldn’t find any more capital sources.
2. How are the types of investments classified?
A. Seed – This is normally going to be very small amounts (thousands to millions) and is mostly invested by Angel Investors and Venture Capitalists. Usually, companies are just being formed and have little to no revenues when searching for this stage of investment.
Many times the only way to contact or pitch to Angels is to know someone who knows someone. Therefore, they usually don’t have complex websites, nor do they list their contact information. The VC’s are easier to get a hold of since they are mainly companies, but they will primarily be looking for a short pitch of your idea consisting of about 10 Powerpoint slides. Many times this is called an elevator pitch. A lot of the companies that do Seed Capital have helpful tips for Entrepreneurs and list what and how capital seekers should go about searching and presenting to them.
Early-stage – Companies looking for this type of investment normally have already started producing some revenues and may or may not have already raised some funds from either Angel Investors, or Venture Capitalists. This stage is mainly populated by Venture Capitalists, but some Angel Investors and some Private Equity companies also live here.
Growth – This type of investment is mainly done by Venture Capital companies and Private Equity companies. It is also a category in which we put financing companies such as bridge loans and other bank type financing. Mezzanine Debt can also be included in this category, but we have a separate identifier for them in our database. This category is quite encompassing due to the many different players that really provide similar capital. The structure might be very different, but the purpose is mainly for growth and cash flow management. PIPE’s (Private Investment in Public Equity), and Recapitalizations could also be included in this category, but we have also input separate identifiers for them as well.
Buyout / Acquisition / Management Buyout - This type of investment is mainly for Private Equity. This stage of investment is for companies looking for a change of control. These sources generally take a majority stake in a company, but some are open to minority stakes. If the company listed that they were open to minority positions on more than an opportunistic basis then we noted it. This stage can entail public or private companies that are looking to change their ownership structure. Many times the sources wish to keep management in place.
Turnaround / 363 Asset Sales - This type of investment is usually done by firms specifically interested in finding companies in distress. The investment is usually much riskier, and bankruptcy and other financial situations are the main hunting grounds for firms investing in this type. A capital source did not get listed as interested in Turnarounds unless they specifically stated so on more than an opportunistic basis.
3. What is an Add-On?
A. An Add-On is basically a strategic acquisition by a financial buyer. A Private Equity company with a platform company in an industry is usually interested in building up that platform to reach a critical size at which point they can bring the company public or sell it. This is similar to the way public companies buy smaller firms. Most of the time the Add-On criteria is simply “Is it a good fit to our current platform?” Revenue size is less a concern, as is profitability, since adding to the platform will change the expense structure and marketing structure of the Add-On anyway. That said, the Add-On has to be worth their while. Add-Ons are going to be mostly concentrated in what is called the Middle-Market. The Middle-Market is defined differently depending upon who you talk to, but it is in the general revenue range of $10 million to $500 million.
4. Can anyone gain access to your database?
A. We have started offering our research services as the only way for others to access our database. Utilization of the database is only as good as the personal running it. We feel this is where we add value. We also think many potential users would get quite frustrated trying to figure out how we categorized items and why they can’t “make it work”. We will soon be making our database available on a subscription basis, but until then you may contact us about specific custom searches for a nominal fee.