Potential companies should meet several of the below criteria:

  • Industry
    • Sizable and growing
    • Sticky business model with recurring revenues
    • Fragmented market
    • Straightforward operations
    • Minimal cyclicality
  • Company
    • History of profitability
    • Unique competitive advantage with potential for continued growth
    • Low working capital needs
    • No strong customer or supplier concentration
  • Financial
    • Minimum annual EBITDA of $750,000
    • Minimum EBITDA margin of 15%
    • Revenue between $1,500,000 and $20,000,000
    • Minimum of 50% recurring revenue
    • Historical revenue growth of at least 5% annually
    • Three year history of profitability
  • Owner
    • Owner is seeking to retire or exit without an obvious successor in mind
    • Owner wishes to have a reduced role in the business going forward
    • Owner is looking to divest a non-core asset