MENTOR’s investment criteria are not confined by heavy reliance on certain industries. The existing portfolio and areas of interest encompass a wide variety of areas:
- Business &
- Consumer, Distribution & Logistics
- Healthcare &
- Industrial Technology
- Information &
Lasting Investments Begin with Solid Ideas
In the confusing world of venture capital and private equity, it can be daunting to be tasked with developing a structured investment approach. At MENTOR, we balance our investment structure to address both the needs of the portfolio company and the liquidity requirements of an investment fund. Unlike an investor in public equity securities who purchases an existing security in the marketplace, MENTOR negotiates and structures its investment to leverage features that enable management to have considerable latitude in daily operations.
MENTOR makes "positioning investments," thus leveraging our investment capital to attract significantly greater financial resources from extensive relationships with institutional investment funds and private capital sources.
Our ultimate objective is to create value for all shareholders and therefore liquidity time horizons may differ. This gap is bridged by using a combination of features, which may include a preference on sale or liquidation in order to provide a measure of protection against loss, as well as covenants designed to provide greater powers in the event of poor performance and ability to accelerate sale of its position.
To this end, a variety of securities can be used including:
- Subordinated notes
- Convertible preferred stock
- Royalty streams
- Common stock
- Puts and calls and other redemption features that are combined to align all participants
MENTOR will only consider financing seasoned management who have demonstrated success in building companies, and, preferably, those who have generated liquidity for themselves and their shareholders. Portfolio companies must meet rigorous criteria and demonstrate a demand pull approach to marketing, i.e., products or services sold to the consumer, OEM, or direct to the business user must be in "demand" because of quality, price, performance and/or service features.
At this level, MENTOR focuses attention on the operating efficiencies necessary to support growth in increments. MENTOR helps management establish milestones in response to a constantly updated Business Plan. The Business Plan serves as a dynamic operating roadmap monitoring the following crucial aspects of the business:
- Cash Flow
- Manufacturing Capacity
- Team Building
- Personnel Recruitment
A strong foundation can help assure profitable growth, proper spending of cash resources, raising follow-on capital at the right time, and recruiting to fill-out the management team.
MENTOR's investment objective in these later stage opportunities is to partner or act as a sponsor with seasoned management in business expansion through timely execution of financing the appropriate capital structure, contributing to formulating business strategy and regular monitoring operations through board or advisory participation.*
MENTOR invests its capital and then works with management to raise subsequent funding through our extensive relationships with private and institutional investors. With MENTOR's guidance, companies have demonstrated their ability to raise additional capital. Special Situations represent a broad spectrum including:
- Venture Capital Expansion, which is the providing of working capital as a company approaches breakeven and/or seeks to rapidly move beyond breakeven.
- Mezzanine Expansion financing is generally associated with profitable company expansion, and may include product line extensions, industry consolidations and acquisitions.
- Leveraged Transactions are principally associated with either leveraged/management buyouts or recapitalizations to enable private/family businesses to provide liquidity for retiring owners or estate planning.
*Micro-Cap Public Companies with capitalizations under $100 million are out-of-favor due to the contraction of research firms and additional demands from Sarbanes-Oxley. Nevertheless, value exists in such companies at this level and raising capital through Reverse Mergers and PIPEs also minimizes the time and cost of obtaining capital for expansion.