Our preferred investment strategy is to make an early stage initial investment (typically post prototype) and then participate in follow-on financings that support the portfolio company’s growth as it reaches its milestones.
We also prefer to make investments with other experienced investors who will continue to support the company as it grows. Accordingly, we seek to co-invest with other venture capital funds and corporate venture teams. Given the right opportunity we will lead a round of financing, but we are also comfortable participating as part of an investor syndicate.
Cycad Group searches for investments in which the risks associated with technology and market development have been adequately addressed. We look for: (i) outstanding entrepreneurial management teams capable of executing their vision; (ii) enabling solutions, disruptive technologies and/or innovative products; (iii) sustainable competitive advantages and/or high barriers to entry such as unique and defensible intellectual property; (iv) large, well defined growing markets with revenue potential exceeding $100 million (v) scalable well defined business models that demonstrate great growth potential; and (vi) an identified exit strategy/liquidity event.
Once we make an investment, Cycad Group views it role as that of a partner; providing enthusiastic support and constructive criticism. As an active advisor to the company we provide entrepreneurs with access to resources that go beyond the investment of capital. We do not want to become involved in the day-to-day management of our portfolio companies. Rather, we look to help enable strong management teams as advisors; assisting management in the development and execution of business and financial strategies. We often seek board observation rights or where appropriate (given the size of investment, the stage of the company, and other investor representation), the right to designate a representative to the board of directors of a portfolio company.