Our Strategy‘First Institutional’ Growth Capital

AN ALTERNATIVE TO BUYOUTS

Customized Financing and Value-Added Partnership

We provide creative structured financing solutions that mitigate risk for our investors and limit dilution for our portfolio company partners, aligning our mutual interests to maximize uncapped upside. Our goal is to help business owners to realize the potential of their business without losing control and to manage risk for our investors while delivering significant upside potential.

TARGET CRITERIA

Owner Operated and Established, High Growth Companies

Target Investment Criteria

We focus on lower middle-market companies with:

$10-300MM

Revenue

$1-10MM

EBITDA

30-50%

Growth Rate
  • Independently owned business with no prior institutional equity
  • Established operating history, growing and profitable or with near term path to profitability
  • Short term, discontinuous growth event with 50-100% potential revenue increase during the next 24-36 months
  • Well-defined use of capital: geographic expansion, product line extensions, capital investments, company/asset acquisitions, or recapitalizations

How We Invest

Balancing Risk and Reward to Better Align Incentives

Lateral structures its investments to mitigate risk while partnering closely with business owners.  We typically invest $10-50 million and as much as $75 million in customized structured financing solutions that enable business owners to build durable and great businesses and  to achieve extraordinary financial outcomes.

STRUCTURED RETURN

with 10-14% coupon, 2-3 year tenor 

UNCAPPED EQUITY UPSIDE

20-80% stake, 3-5 year hold

FOCUS ON KEY INDUSTRIES

manufacturing, healthcare, infrastructure, technology 

Beyond Unicorns

A Focus on ‘PANTHERS’

Lateral focuses on businesses that are ambitious, yet grounded in sensible and profitable business models. We call these companies “PANTHERs”.

We avoid speculative startups that seek to invent new markets or companies that have been bought and sold by multiple private equity owners. Our focus on “PANTHERs” is deliberately intended to contrast with “Unicorns,” the term coined for high-risk venture capital backed startups that are valued at over $1 billion.

The “PANTHER” companies we invest in take a conservative approach to risk and look for high probability outcomes. We help “PANTHERs” embrace challenges, navigate transformational growth, and achieve sustainable profitability.