Signal Peak Ventures makes seed and early-stage investments in information technology and life sciences companies that have the potential to become significant stand-alone businesses. We will also invest in later stage companies under special circumstances. Our investments range in size from as little as $250,000 to as much as $5 million. Typically, we invest $2 to $3 million initially and expect to invest $5 to $10 million over the life of a company. Factors of importance in appraising a prospective investment's potential for capital appreciation include the following:
The Management Team. A management team with exceptional credentials and an overriding motivation to succeed. The Fund may also back companies or concepts with an incomplete team, with the intent to help complete the team. The Fund's objective will be to complete the team with individuals that have previous operating experience in the industry, are self-motivated, have a high degree of urgency, and a long-term commitment to the business.
Large Markets. Large and growing markets that allow companies to expand rapidly to significant size in two to five years. Also attractive is a strong position in an established or niche market, or an early position in a rapidly growing market with a large potential size that will enable the companies to achieve a meaningful level of sales.
Entry Barriers. Intellectual property, proprietary product lines or other competitive advantages, which enable the business to achieve above-average earnings.
Business Model. A business with potential for large margins and significant free cash flow.
Attractive Deal Structure. A reasonable valuation of the venture at the time of investment, to provide a substantial return-on-investment opportunity commensurate with risk.
In summary, Signal Peak invests in companies that can demonstrate a large market opportunity, superior competitive position, proprietary product or service, tangible customer benefits, and future liquidity. Above all, Signal Peak will look for a superior management team with the discipline, experience, and drive necessary to build a company that is the leader in the marketplace.