Investment Philosophy

We understand that investing in private companies can be a daunting task. The inherent risk of identifying early stage companies and investing your hard earned money can be difficult. That’s why Deal Report Pro is here. Our experts sift through hundreds of data points behind companies to identify the most promising deals.

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Our goal is to bring the deals with the best possibility of success across different development stages and industries. 

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Here’s our investment thesis on how we identify promising deals:

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Early-Stage Companies

Many early-stage companies have little more than a business plan. At this stage, the risk is highest, but the potential returns are also very high.

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We look for several factors when evaluating these deals.

·         A solid business plan

·         A management team experienced in building companies or in the industry the company is entering.

·         A plan to scale the business when appropriate

·         A growing industry with opportunities for new players

·         A potential return that is extremely large by any standard.

Mid-Stage Companies

For mid-stage companies, Deal Report Pro looks for all of the attributes of an early-stage company plus more.

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For most mid-stage companies, financials begin to become important. Deal Report Pro looks for revenue or revenue about to begin, a path to a positive gross margin. For other companies, revenues are less important than progress toward their eventual goals.

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Examples of the latter are companies developing drugs or medical devices, mining companies, and the like. What those kinds of companies have in a common is a big potential payoff that is down the road but also fully disclosed. Those companies must have a history of meeting announced milestones and a large end market for its product or service. Ideally, they should have begun entering into partnerships to help them achieve their end goal.

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The potential return on mid-stage company investments can be lower than that of early-stage companies but must still be high relative to historic stock market returns and ideally should offer the potential for investors to multiply their money many times over.

Late-Stage Companies

A later-stage company is one that is set for acquisition or IPO.  For acquisition candidates, companies should have a well-developed product or service, real revenue traction with a positive gross margin, and a path to positive EBITDA. The product has the potential to disrupt its industry or create a new one.  As with mid-stage companies, an adjustment is considered if the company is back-loaded.
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Pre-IPO companies should also be able to show that following an IPO of some achievable size the company will not need cash for at least 18 months.

Later-stage investments should offer a potential return well in excess of the overall stock market over the planned investment period.