Investment Approach
Target Companies and Investment Criteria
We search for and target companies with revenues in the $5-$25 million range that are profitable, or almost breakeven, and are located in New England or the Middle Atlantic states. We are opportunistic and do not specialize in specific industries or sectors. In the past we have invested in software, manufacturing, business services, medical devices, semiconductor and EV charging companies. We work with and support companies that have proven their product or service in the marketplace and need capital to accelerate their growth. Many of them have recurring revenue streams and a scalable business model. Many of them are also qualified small businesses (QSB) as defined by the Internal Revenue Code. Most importantly we invest in proven management teams with disruptive ideas that can break their industry’s molds, which may offer tax benefits under certain conditions.
Deal Size and Structure
Our typical financings are between $6 - $15 million. Rather than maintain a general-purpose fund, we create an investment vehicle called a “Focus Fund” to invest in each company. This enables us to customize each financing to meet the unique needs of a portfolio company. Sometimes this means a debt offering with warrants, sometimes only equity, in most cases we raise both debt and equity. Very often we raise multiple rounds of financing for a portfolio company. Over the past twenty years we have completed over 42 investments in 17 portfolio companies, raising over $350 million.
Investor Base
We market each Focus Fund financing through our affiliated broker-dealer, U.S. Boston Capital Corporation, to a wide network of qualified high net worth investors. Many of these investors have participated with us for over twenty years and have a long-term investment perspective. We uncover opportunities in alternative investments to which our network would not typically have access. Because we invest our own money in each investment, our incentives are aligned alongside the investors within each company through the Focus Funds.
Post Deal Involvement and Exit Time Horizon
After a financing, we try to be a value-added partner with management, typically acting as a very active board director or board observer. Our capabilities are not limited to finance - we are also experienced in strategy and operations. We offer very strong networks who can help company management in specialized areas. We have a flexible time horizon and are never in a rush to exit – we have the patience to help companies mature. Our success is dependent on the success of the companies with whom we work.