No matter the industry or business segment, we help our operators navigate the rapidly changing technology landscape, allowing them to apply real-time technology solutions to their journey, helping create the potential for outsized competitive advantages in their industry.
We are looking for the best and brightest.
Long established partnerships with top business schools and business school professors help us find our future CEOs
We have a rigorous screening process to evaluate our candidates
We are looking for a mix of rigor, work experience and academic business excellence
Real Time Analysis.
We partner with our aspiring CEOs on all phases of pre-deal diligence
We make ourselves available to our entrepreneurs and take a hands-on approach throughout the diligence process
We analyze data rooms, including CIM review, draft LBO models, customer contracts, and value creation strategies
We will only consider investing in deals that meet our risk and return thresholds (target a gross 35% IRR) 1
A Macro View On A Business’ Potential.
Investment Committee includes members with years of operational expertise who have spent most of their careers in the lower middle market
Independent Next Coast financial model required for all investments, including scenario analysis
Thorough deal memo circulated to the IC, including description of business, deal structure, return potential, analysis of competitive landscape, assessment of value creation opportunities, and a recommendation from the team
1 According to the Search Fund Study of 2022, led by the Stanford Graduate School of Business, the average asset class returns are of 35.3% Gross IRR, 5.2x Gross ROI
We are looking for the best and brightest future CEOs. We run a stringent selection process of applicant screening to ensure there is a solid fit between our aspiring operators and Next Coast.
CEO Identification
Initial Interview
Non-Biased Scoring/Ranking System
PPM Review
Additional Diligence
Capital Commitment
Our approach to what makes a great lower middle market business opportunity is largely industry agnostic. Instead, we adhere to a short list of long-standing guiding fundamentals we believe are crucial to achieving outsized returns:
Significant recurring revenues (>65%) / solid EBITDA margins (>15%)
History of stable cash flows / low capital expenditure requirements
Low customer concentration
Not a distressed or turnaround situation
Non-competitive acquisition process – proprietarily sourced and negotiated
Avg. transaction multiple of 5x to 6x EBITDA (roughly half the buyout industry average)
Proforma business leverage < 3x Debt/EBITDA
