Best Practices for Minority Owned Companies Seeking Private Equity Regarding Institutional Funding: Are "minority-owned and/or managed" businesses, defined by the Fund as businesses where
a qualified minority person(s) own a substantial equity stake in the business and are in top management (including Founder,
Chair and CEO,).
Have a strong, proven management team with a long-term commitment
to the company. The management teams have extensive experience in their respective industries, including profit and loss responsibility.
They have knowledge of their markets, the dynamics and main competitors. Many have prior entrepreneurial experience.
If the entrepreneur team does not have extensive experience in building companies, then they have built an advisory
team with specific experience.
If considered startup, then have an operating history
of at least one year and have already developed their key product or service and taken it to market. If
considered an early stage company, in business two years with growing revenues and able to reference customers with a strong
growing backlog of customer orders
The companies are
participating in rapidly growing industries. These rapidly growing markets are big enough to support revenues
from more than one company, or they have vulnerable competitors and barriers to entry.
Have a
compelling simple business model that drives profitability and specific execution strategies
to grow that business as funding is received.
Have an exit strategy that includes
an eventual sale or initial public offering.
Best Practices for Companies Seeking Private Equity Regarding Accredited Investor Private Funding: Are "minority-owned
and/or managed" businesses, defined as businesses where a qualified minority person(s) own a substantial equity
stake in the business and are in top management (including Founder, Chair and CEO,).
Have a management
team that recognizes their weaknesses and welcomes advice and counsel from their angel investors and advisors, and seeks creative
ways to continue to grow their business with limited capital, willingness to trade equity for experience of contract/part
time strategic personnel. The management teams should have extensive experience in their respective industries, including
profit and loss responsibility, and intimate knowledge as to what need their product is satisfying and what
a customer would pay for it. They have knowledge of their markets, the dynamics and main competitors. Many have prior entrepreneurial
experience. If the entrepreneur team does not have extensive experience in building companies, then they
have built an advisory team with specific experience.
If considered startup, then have a well
documented sales, marketing, and operations plan that have realistic growth expectations. Ideally they
have already developed their key product or service and taken it to market, if even with just a client who acts as a beta
tester. If considered an early stage company, in business two years with growing revenues and able to reference
customers with a strong growing backlog of customer orders
Are
participating in rapidly growing industries. These rapidly growing markets are big enough to support revenues
from more than one company, or they have vulnerable competitors and barriers to entry.
Have a
compelling simple business model that drives profitability and specific execution strategies
to grow that business as funding is received.
Have a clear plan of future funds that will be
needed to fully execute and have identified the potential sources for those funds. Have an exit
strategy that includes an eventual sale or initial public offering.
Best Practices for Companies Seeking Working Capital Are "minority-owned
and/or managed" businesses, defined as businesses where a qualified minority person(s) own a substantial equity
stake in the business and are in top management (including Founder, Chair and CEO,).
Have a
qualified and experienced management team that shows an ability to execute and a board of advisors that are active
in helping to build the business. Company is “in business” having proven the basic model
that their product works and customers want to buy it, and they need capital to scale. They can use
purchase orders, invoices, inventory or equipment as collateral for the loan. Best case, they have been
in business two years and are profitable.
If participating in an established market, they have
shown that they have a differentiating feature or means of delivery. They have the potential to grow the
business to multiple locations or to franchise. Have a compelling simple business model that drives profitability
and specific execution strategies to grow that business as funding is received.
Have
a clear plan of future funds that will be needed to fully execute and have identified the potential sources for those funds.
Have a clear means to pay the loan back.