Uncovering the Right Opportunity

An investment thesis is always evolving. We have made money for our investors and ourselves by
uncovering companies with these characteristics:

INVESTMENT THESIS: TECH STARTUPS

  • Seed Investments, rounds prior to Series A (typically valuations $3M to $30M)

  • Serving a big market, solving a big problem, or demonstrating the ability to dominate a niche.
  • Act as a “painkiller” that solves an existing problem instead of a “vitamin” that is simply better/faster, cheaper. (Unless they can sell their version via a new marketing channel or method).
  • At least $12,000 per month recurring revenue proving they have “Product Market Fit.”

  • Displaying “First Mover Advantage” preferred to companies with intellectual property

  • Have at least 2 co-founders. Companies with only one founder are to be avoided.

  • Patents are only as valuable as the cash flow they produce in most cases.

  • Can surge over the internet
  • If they are consumer-facing, can they use digital marketing such as Facebook, Instagram, and Tiktok to rapidly expand sales.

  • Companies who have been in business for 4 years or less

  • In many cases, the companies have already been “pre-screened” for us by being accepted to YC, 500 Startups, or Liquid2, etc.

  • Recommended or co-invested by the personal network of the co-founders of Greenwood & Cavalier

  • The two co-founders are well suited for each other and have different backgrounds, education, skills, abilities, and experiences

  • Co-Founders that have “Skin in the game” and do not draw salaries that will burden the young enterprises

  • Co-Founders that have terrific energy, are well educated, and have worked in a startup before they started their new venture

  • The completeness of the management team at the time of the investment with enough dedicated full-time people to make the company work

  • When investing beyond true Seed Rounds (sometimes called Seed Round 1, Seed Round 2, or a Growth Round) the company should have an outstanding sale growth curve

  • At least one of the co founders has a proven ability to raise money from investors

CASE STUDY

Modern Message

Modern Message is a leading provider of cloud-based resident engagement, loyalty, and rewards solutions for the multifamily real estate industry. One of our G&C team members discovered the Dallas, Texas-based company. Initial investments were made when the company had a valuation of $3m in 2017. In the summer of 2018, an SPV was created for a follow-on investment at a valuation of $23m. Real Pages bought the company 18 months later for $65m cash.

CASE STUDY

VOYCE Global

VOYCE Global a leading Medical Language Translation Service for hospitals. Voyce provides access to certified medical interpreters on-demand, 24/7, in 240+ languages. A member of the G&C team uncovered this investment through the Entrepreneur in residence at the University of North Carolina Kenan-Flagler Business School. Initial investments were made at a valuation of $15m, then again at a valuation of $28m, and a final investment was made at a $35m valuation. Sales growth has surged from $5.2 in 2019, to 2020 $7.3m, 2021 $23, and 2022 $34m. In 2023 the company hit an annual sales run rate of $100m.

CASE STUDY

Laundry Sauce

Laundry Sauce is the world’s best-smelling laundry detergent sold direct-to-consumer using only digital marketing channels such as Instagram, Facebook, and TikTok.
Two members of the Greenwood & Cavalier team first invested in February of 2022 when sales were approximately $200,000 per month.
Sales growth has been as follows: $40,000 for 2021, $3.4M for 2022, and in 2023, the company had its first million-dollar sales month in July, and finished the year at a run rate in excess of $30M.

INVESTMENT IN PRIVATE DEBT

With investments in more than 160 companies, many growing rapidly, the opportunity for private direct lending is often prevalent.  G&C team members have put together two well-secured private loan pools for 2 startup companies, one in Boston and the other in Arizona, both paying 16% interest with quarterly payments.

INVESTMENT IN PRIVATE EQUITY

The G&C team has been involved in the purchasing, growth, and sale of many lower-middle market private companies. We actively seek lower middle market companies with an EBDITA of $1m to $5m.