Criteria

Kaizen Private Equity seeks investment opportunities in companies with 3 fundamentals and the potential for organic or acquisition-driven growth. We invest from $5 million to $15 million of equity over the life of each company, depending on the strategy and capital requirements of the business. In each portfolio investment, we apply a growth-oriented approach while leveraging our deep industry knowledge. When selecting prospective investments, we place particular emphasis on certain attributes, including:

Differentiated Product or Service

We seek companies that provide a clear value proposition to their customers through a considerably differentiated product or service offering, which generally allows the company to command a premium price, generate a premium profit, or significantly increase market share. This is not only achieved through unique product or service features. Differentiation may also be achieved by delivering high-quality, cost-effective products or services faster than the competition.

Defensible Competitive Advantage

A competitive advantage may result from intellectual property, proprietary business processes, or value-generating positions that cannot be easily recreated or imitated. Such an advantage can potentially yield above-average profitability or superior financial performance. When working with businesses, we focus on enhancing those properties and processes that create an advantageous competitive position.

Recurring Revenue Model

Generating and maintaining cash flow is essential for growth. Recurring revenue models increase the probability of success by offering predictability through the growth phase. We place particular emphasis on customer retention as a strategy for long-term, sustainable growth.

Diversified Customer Base

Dependence on a small group of customers can adversely impact a company. Rapidly expanding businesses can not afford the disruption from the loss of a single dominant client. A diversified customer base allows the company to avoid concentration risks and maintain a more balanced approach in customer acquisition and retention.

Strong Management Team with a Proven Track Record

We partner with companies that have a h3 management team in place, or with proven executives in search of a new platform company to run. Additionally, we can assist in recruiting talented professionals with a record of excellence to complement the existing team members. At all stages, we work with senior management to help accelerate the growth of the underlying business.