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See
also
Post-Investment
Companies
that wish to be considered for an investment should contact us directly
or through a professional intermediary (e.g., accountant, attorney,
banker). Prior to meeting with prospective portfolio companies,
we prefer to review an executive summary, which is screened against
our investment parameters. At this point, our analysis focuses on
management's background and experience, the structure of the industry
in which the prospective portfolio company participates, and the
company's competitive position within that industry, as well as
whether or not a suitable exit strategy is in place.
Once our review of the prospective portfolio company's business
plan is complete, a meeting, or series of meetings, between Allegiance
Capital's managers and the company's principals take place. Typically,
a more detailed business plan is requested from the company at this
point.
After Allegiance Capital's management meets with the principals
and managers of the prospective portfolio company, digests all the
information provided, and performs some independent research, a
term sheet is delivered to the appropriate person(s). The term sheet
is basically a proposal. It is not a definitive document or a commitment.
Its purpose is to communicate and capture an understanding between
both parties. Perhaps most importantly, the term sheet can bring
to the surface potential misunderstandings early in the process.
While each term sheet is tailored to the specific case, all contain
certain common elements.
During this step, a meticulous evaluation of all aspects of the
business is undertaken. This may include discussions with customers
and vendors; background checks on principals and/or management;
a review of the historic and projected financial statements; interviews
with accountants, etc.
While this represents the final step in the funding process, in
many ways it represents the beginning of a long-term relationship
between Allegiance Capital and the portfolio company. During this
step, Allegiance Capital's attorneys prepare the legal documentation
for review and execution.
From
initial contact to closing, it generally takes 45 to 60 days to
complete our due diligence and close an investment.
See
also
Post-Investment
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