Private Equity and Venture Capital Support

Target companies for Private Equity investments are in a mature stage with an established historical background. In successful PE investments, we seek to help the PE firms based on our research and analytics expertise with the following support services -  

Identifying target firms for PE investments is complex due to the availability of various target companies with different structures. While identifying the target companies, we focus on the following: 

• Overview of the target company’s business 
• Brief analysis of the target company’s financial performance based on its Key Performance Indicators
• Overview of the target industry or the company’s focused segment 
• Valuation of the target industry to assess its suitability for investment  

We also assist in preparing pitchbooks, investment memos, teasers, investment committee memos, etc., for any identified target companies, which helps investment teams in PE companies evaluate the suitability of the target company.  

 PE firms have an investment team that coordinates with the Investment Committee and assists in negotiating the deal with the target company. Initial Due Diligence holds an important place as the suitability of the target company is the very base of the successful execution of a PE deal.  

 We provide support in conducting initial due diligence and its related questionnaire using the following approach in screening the top-quality target companies -  

•  Historically profitable and cash-generating companies, which are currently underperforming 
• A lower failure risk and firm tangible asset base
• Companies exhibiting lower productivity but showing potential to improve 
• Companies operating in defined markets with less complicated products or services 

Further, we assist the investment team in preparing a brief investment proposal covering the precise but essential aspects of the private equity deal, such as the business model, industry overview, financial performance, and projections based on management’s growth plans.  

It is essential to build a detailed operating model for the target business based on reasonable forecast assumptions. This helps PE investors to understand the drivers of potential return for the acquisition. Our experienced team of analysts has the expertise to work on renowned databases along with strong research skills, which aid the investment team in preparation of an internal operating model made of -

• Detailed revenue and cost breakdown owing to specific drivers and assumptions. 
• Expected financial performance of the company 
• Detailed analysis of investment targets
• Valuation using the DCF approach 
• Comparable Company Analysis 

 A preliminary investment memorandum is a compilation and summarization of the detailed investment model and a comprehensive investment thesis conducted previously. After conducting a final due diligence, which includes interaction with third-party consultants and addressing key issues pointed out by the investment committee, a final investment memorandum is prepared. Our strong analytical skills and experience in developing high-quality research reports help us deliver point preliminary and final investment memorandums. Sections in the investment memorandums include - 

• Executive Summary
• Company Overview
• Market and Industry Overview
• Financial Overview
• Key Risks 
• Valuation Overview
• Exit Options and Timings
• Recommendations and Proposed Project Plan 

After a successful investment, it is imperative to monitor the portfolio through performance metrics tracked across the portfolio companies. We provide investment monitoring services to PE firms like:

• Periodical tracking of the key performance indicators and the company’s financial performance
• Tracking of any deviation between actual performance & expected performance
• Tracking the impact of any change in the portfolio company’s competitive landscape or position, industry prospects, growth opportunities, management team, etc. 

Along with monitoring portfolio performance, we are also keen on boosting the portfolio’s performance by providing some valuable insights to the portfolio companies, which will boost their performance and help realize better returns for PE fund investors -

• Analysis aiding additional revenue generation and cost reduction 
• Suitable initiatives for expanding the company’s market size 
• Strategies to enhance competitive pricing and position 

Exit Strategies for PE investment companies include an Initial Public Offer, strategic acquisition of the target company by another suitable company, secondary sale of the acquired stake to another private equity group, repurchase of the PE company’s stake by the promoters, and liquidation. In any of the above cases, the first key step is to comprehensively analyze the company's future and decide the exit strategy. We provide exit support to the PE firms or companies in the form of -

• Detailed driver-based financial model incorporating financial projections
• Detailed company valuation justifying the company’s value to future buyers 
• A summary of the updated industry overview and any additional growth drivers and opportunities 
• Suggestion of suitable exit strategy and identification of potential buyers after exit  

Finding new investment opportunities for VCs can be a challenging task, which private equity firms similarly face. An additional challenge is that the target startup companies fall short of any historical background to be relied on as they are in an early stage of development. We also present our research in a high-quality presentation format applicable to the pitchbooks, investment memos, teasers, investment committee memos, etc., prepared by us. We provide the following support services from early to late-stage VC firms for a successful VC investment - 

 For any venture capital fund, screening quality is critical to success. Screening aims to pick quality companies from potentially thousands of investment opportunities consistent with the VC funds’ philosophy, stage, sector preferences, and other criteria. We provide support services for conducting preliminary scrutiny to assess the startup profile and its suitability. Our preliminary scrutiny contains-

• Executive summary 
• Market potential and size
• Industry opportunities 
• Competitive landscape 
• Management summary
• Financial Analysis

 A detailed company evaluation takes place after the preliminary screening and identification of target companies. We provide detailed company profiles of the target companies, which include important aspects like -

• Study of project profile
• Track record of the entrepreneur
• Market potential
• Technological feasibility
• Financial Projections 
• Future growth drivers and opportunities  

A detailed evaluation helps the VC firm make the final decision regarding the risk-return spectrum. With our strong graphic and presentation skills, we provide high-quality presentation support along with research.  

 A term sheet is a non-binding document highlighting the basic terms and conditions of the investment agreement. This helps VC firms in deal negotiation with the target companies and provision of funding. The terms of the deal should be flexible and safeguard the interests of both parties. We assist VC firms in preparing suitable term sheets for covering the following key aspects - 

• Amount of money to be invested
• Type of investment
• Valuation of the company
• Details of dilution in ownership
• Peronei Valuation 
• Management and Board Seat Rights
• Planned Exit Strategy 

 The target companies in the VC fund need to bear favorable key financial metrics to win investors' confidence. As the target companies are in an early stage of business development, keenly monitoring and evaluating these target companies in a VC fund becomes crucial. We provide the following support services for monitoring and assessment of VC Fund’s performance - 

• Periodic data updates of the portfolio companies 
• Identification of further industry opportunities and growth drivers 
• Strategies for entering the product market and grow
• Tracking of drivers on financial as well as operational front  

Common exit plans for VC investments include mergers and acquisitions, selling of business, and taking the company public through an IPO. Drafting a suitable exit plan for VC investments can be a bit more complex than PE investments, as the target company is still in an early stage and may be required to remain private before meeting certain conditions and going public. 

Determining an exit plan is crucial for VC companies to realize the investment and profit/minimize losses. We build exit valuation models for the portfolio company to justify the valuation to potential buyers. Our team of analysts supports VC companies and firms in preparing exit plans to identify the suitable timing of exit based on factors such as -

• Nature of the ventures and prevailing competitive environment
• Financial Projections and Exit valuation of the target companies 
• Extent and amount of financial stake
• Availability of suitable potential buyers  

Deal sourcing, execution, and monitoring support for Private Equity and Venture Capital across the investment life cycle.

Support to identify the investment targets, company profiling, teasers, industry overview etc.

Support for analysis of investment targets, valuation using DCF, comparable company analysis, etc.; industry drivers, due diligence support etc.

Support for tracking the performance of portfolio companies, variance analysis, reasons for underperformance etc. 

Support to drive growth at portfolio companies: Revenue growth, cost reduction initiatives, process optimization, competitive intelligence etc.

Build valuation model for the portfolio company to justify valuation to potential buyers, track deal activities in the sector to understand valuation range, pitchbooks, etc.