Our Criteria

In our buyout portfolio, we invest in two types of opportunities:

• Category leaders, preferably vertical SaaS, that we own and operate
• Search funds that have identified a target acquisition with recent MBA graduates

Financial Profile

• At least $2M in recurring revenue (majority subscription based)
• History of profitability (at least 10% operating margins)
• Preference for high gross margins (70%+)
• Revenue growth rate at least flat 
• U.S. based Fortune 500 customers
• At least 95% gross retention and 110% net retention

Business Profile

• Generally founder run
• Preference for 5+ years operating history
• Operate in large, growing markets
• Have a cost advantage vs. peers
• Founders have a special approach to the market and are able to recruit others
• Disciplined unit economics

Search Fund Criteria

• Invest at time of transaction
• Geographically flexible, preference for Harvard, Wharton, and Stanford grads
• Preferably technology companies

Preferred Verticals

Payroll software, accounting/tax software, CRM, healthcare insurance, tax collection or lien sale software, HCM (learning, talent management, recruiting), sales tax software, workflow automation, CAD/CAM design, procurement software, financial planning software, rating agencies (credit or otherwise), utility management software

Financial Attributes We Look For

• Negative working capital
• Majority subscription revenue
• 95%+ gross retention
• LTV/CAC of 4x+
  
• 70%+ gross margin
  
• History of $500k+ EBITDA profitability
• Survival through downturns 
• Diversified customer base