Investment Thesis

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The firm typically makes investments in companies with enterprise values between $10 million and $30 million, providing equity capital of $2 million to $7 million from the Inflection funds and as necessary we have and can augment our equity scale capability with co-investment from Limited Partners in Inflection Funds. We seek to generate attractive rates of return for our investors by partnering with management teams to execute transformational business strategies at portfolio companies

Our strategies include implementing many or all of the following core tenets: best-practice programs to reduce costs and improve efficiency; investment in revenue-building opportunities (R&D capabilities, new product development and introduction, manufacturing capacity additions, new market expansion); working capital reduction and non-core asset divestitures; and aggressive add-on acquisition programs. In employing our value creation strategies, generally we use a lower degree of financial leverage than that employed by many other private equity firms and rely more on asset selection (industry, management teams and situations) and transformation through strategic plan implementation to generate returns.

Inflection Capital devotes careful attention to industry selection and sub-sector investment thesis development, due diligence, transaction execution, and investment monitoring. Primary responsibility for each potential investment is assigned to a transaction team led by an Investment Partner and joined by an Operating Partner. These responsibilities begin at the transaction sourcing stage, where Inflection’s operating leverage, combined with the broad networks of our Investment Partners and Operating Partners, lead to a consistently deep and relevant flow of potential transactions.    

Once a potential investment has been identified, our team works with management to achieve in-depth understanding of the company’s business and markets, including evaluating and quantifying opportunities for increasing revenue and profitability. They also perform extensive business, legal and accounting due diligence, culminating with the preparation, in close collaboration with management, of a detailed three to five-year business plan. The management of each portfolio company is responsible for achieving the performance targets set forth in this plan. Although we establish a close working relationship with each portfolio company, Inflections’ professionals are careful to respect the division of responsibilities between investors and operating management.  

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