Once under review, business plans and mandates are evaluated based on a balance of success criterea. White Cap concentrates on experienced, high-profile management and board members committed to or affiliated with the venture. Distinctive and otherwise beneficial relationships formed with customers or partners are part of the overall evaluation process. Likewise, management's ability to demonstrate continuous growth momentum even under adverse capital market conditions is critical to raising the excitement and attention level within the investment community. Increasing sales, product development, and industry talk from credible sources helps foster an environment where an investment decision will be made, rather than delayed.
Although the institutional investor universe is well established it is always evolving, making it difficult to keep abreast of investment conditions. Our proprietary "Private Capital Market Database" provides unique financing sources and access to other professional advisors. Acting as an intermediary between its clients and potential investors, White Cap provides a buffer against unproductive solicitations, conducts the required due diligence on investor prospects and screens out inappropriate investors, ensuring a smooth fundraising management process. Through our involvement and mediation, management can avoid the more tedious aspects of the capital raising process, and remain focused on day-to-day operations.
White Cap evaluates potential deals through internal research and analysis to determine its capacity to attract suitable funding. Our industry focus and contact network assists clients through due diligence, including a detailed background check on the management team. Developing a strong, compelling investment thesis emphasizing the unique and exciting aspects of the transaction is critical. The sub-points of the thesis should differentiate the company from its competition and clearly illustrate revenue and profit growth. Private investors expect higher returns than public investors to compensate for increased risk and less liquidity. Working with our clients, we structure the security, terms, and valuation that will best meet the market and case-specific requirements.
A private placement memorandum (PPM) should be a comprehensive but concise presentation. It must be of the highest quality and easily understood in order to differentiate it from the competition. In parallel with management's drafting of the PPM, White Cap develops an investor marketing plan and proprietary target list. The heart of the plan consists of a list of potential "lead" and "follow-on" investors that may include private equity and venture capital funds and mezzanine funds, as well as secondary asset sources including hedge funds, pension funds, endowments, foundations and high-networth individuals. White Cap initiates contact with potential investors, forwards placement memorandums to interested parties, places follow-up calls to answer questions, and arranges management presentations. In meetings orchestrated and attended by White Cap, management completes its investor presentation and responds to detailed questions. Subsequent due diligence requests, meetings or discussions are arranged with the goal of moving rapidly to a commitment. In tandem with our client, we negotiate with the lead investor(s) and, immediately thereafter, instruct counsel to draft a Letter of Intent or Definitive Purchase Agreement.
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