The partners of Agenda Capital have each led several investments and DD processes.
Critical to investment success is the careful selection of which teams and technologies to back, as well as the structuring of the transactions. Having led – and been involved with 30-40 initial investments and numerous follow-on investments – we have seen and learned what works well and what does not.
We will go into some of our considerations relating to the investment process underneath, but not extensively.
Due Diligence – technology, commercial, management, environmental, legal.
We will use legal support for the legal DD, and we may use external resources to confirm our perception of management in a management audit. On the commercial side we may from time to time employ domain experts to validate the technologies, but will perform most commercial DDs such as strategy, customer/partner/competitor interviews, etc. ourselves.
Termsheets and Shareholders Agreements.
We are well acquainted with the latest term sheets and will on a case by case basis adapt and implement relevant protection and control clauses. This could allow greater influence than what our proportion of share capital indicates.
Long Options – will seek to use and incorporate long options
In protecting and increasing the upside in our investments we have very good experience using milestone based tranches and long options when these may be practical to bridge differing perspectives.
Leverage – flexible with regard to leverage.
While balancing risk, we are open to optimise the use of leverage (as seen by the owner/investor) in our portfolio companies, in holding companies and when refinancing.
Instruments – flexible with regard to instrument.
We may use all relevant instruments when making investments, including debt, preferred-equity, equity, warrants, options, etc.
Active risk mitigation – we will proactively manage risk We believe that risk may be reduced by identifying and proactively trying to manage and reduce the potential for, and impact of, various risk elements should they occur. We will do this on a company by company basis.
Alignment relating to growth, strategy and exit – shared goals, KPIs, execution plan and exit vision.
Key to our DD phase and value creation success is the alignment between owners and management with regard to growth and exit strategy. It will be key to our approach that we work with management and co-owners to align our interests, in the DD phase and throughout the engagement period.
We have indicated a 15 – 100 % initial stake of any company. This is meant to demonstrate flexibility in the investment approach, but will also allow for a meaningful capital deployment and ownership stake in any given situation.