Investing requires confidence, so we’re willing to bet that all investors worth their salt would answer the above question with a resounding “yes!”
But is it really so easy? None of us has a crystal ball after all. Nevertheless, investment advisors bear the burden of reading the market and making determinations that, at times, appear no more accurate than divination. What signs can investors use to gauge market opportunities and generate results for their clients?
At Quadrillion Capital, we’ve spent nearly a decade establishing a process for transforming middle-market businesses into winning success stories.
Part of this process is knowing which market sectors and company types offer the most potential for return. These days, Manufacturing 4.0, tech-enabled services, and cloud infrastructure are all hot topics – but this is just one piece of the puzzle. There are plenty of other questions to consider when you start drilling down into each company’s structure.
● What type of equity control, capital structures, and fiduciary oversight does the company have?
● How far along are they in their digital enablement with respect to the cloud, business process automation, data integration, artificial intelligence (AI) implementations, and business platform deployments?
● Is governance accounted for across key performance indicators (KPIs) and objectives & key results (OKRs)?
● Are line operations handled efficiently? Have they embraced Lean Six Sigma or other efficiency tools?
In other words, there are no superficial ways to know whether a company’s juice will be worth the squeeze. But there are ways to tell when investors are backed by a thorough, time-tested evaluative process.
At Quadrillion Capital, we take the above elements and combine them with a proprietary process to identify and home in on opportunities. Without giving away the “secret sauce,” here’s a bit of how our assessment process looks:
● Broad lead qualification
● Detailed scoring to filter unqualified prospects
● Thorough industry/situational screening based on each deal’s context
● More in-depth investor returns screening for potential ROI
● Further due diligence beyond LOI(letter of intent) stages
Based on this assessment process, we aren’t afraid to admit that our team closes only one deal per 100 investment opportunities we evaluate – only 1% of all potential deals, and sometimes even less.
From there, we apply other strategies(such as our unique 10^15 assessment plan) to further cultivate investment opportunities and filter out the options with the best potential for our clients. It’s a more meticulous vetting process than you’ll find at many investment firms, and our system is constantly improving over time.
One of the trickiest aspects of spotting market opportunities is that the window opens fast and shuts even faster. There may be less time for deliberation than you’d like, and you may be tempted to pull the ripcord without doing your due diligence. Obviously, companies should avoid this approach. Instead, it pays to work with those who have been therebefore and have systematic ways to locate this potential. Then you can strike while the iron is hot.
Interested in learning more about how Quadrillion Capital’s proprietary approach leverages these opportunities?
Click here to download our whitepaper, “The Trillion Dollar Opportunity: How to Benefit From Investing in Private Middle-Market Companies” and get the inside scoop on how to identify opportunities before they disappear.