What We Look For

investment criteria

We invest in many types of businesses in many types of industries and have had successful partnerships with the owner/managers that run them. In an effort to make thing simple, the below is what we look for when investing. In essence, this is our investment criteria.

  • Strong owner-manager with a significant stake in the company
  • The owner-manager wants a partner
  • Enterprise value of $5-$25 million and sales of $10-$50 million
  • The business is in the manufacturing, distribution or service sectors
  • The business is profitable and has been operating for at least three years
  • The company can either self-finance or, in the opinion of the General Partner, obtain third party financing

Momentum Value

In addition to our general investment criteria we also look at the standard business characteristics that have proven to be successful through our experience in many industries. We call these characteristics Momentum Value. They are as follows:

  • High performance owner-manager
  • The business can scale up
  • Culture of continuous innovation
  • A strong balance sheet
  • Good margins in its industry
  • Conservative accounting policies
  • Significant market share position
  • Brand recognition
  • Diversified customer base
  • Strong customer loyalty
  • Healthy competition
  • Culture of profitability

How we Align Interests

The Shotgun Fund works differently from other funds, in that we don’t just invest in your company, we partner with you. It’s because of this philosophy that it is imperative to assure that all of our interests are aligned to create value throughout the life of the investment, and why we both sign an Alignment Agreement at the beginning of our partnership. Here are the main points of our alignment agreement:

  • The joint preparation of a strategic plan. The first step of which will be to develop a 100 day action plan.
  • Our shared objective is the building of a great business that can be sold within a time frame agreeable to both partners for a winning return.
  • We work together with the investee operator to build a team that will grow value.
  • We agree to work as a team to prioritize ideas and bring structure and discipline to the strategic plan

Transactions we don’t do

  • Companies looking for short term financing
  • Companies looking for a quick fix to a long term problem
  • Companies that don't have free cash flow
  • Owner managers that do not want a new partner
  • Owner managers that are not interested in selling the business in a 5-10 year timeframe.

Have a Shotgun Situation?

call us now at 416-367-3617, or fill out the form below!