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Investment Assessment Criteria

The IAC consists of twelve (12) elements organized into three categories: 

 

Management/Controlling Shareholders

    1. Integrity – Integrity and reputation of the business partners must be unquestionable
    2. Entrepreneurial Passion/Enthusiasm – Existing businesses with a passion to grow or new businesses with an entrepreneurial person
    3. Track Record – Quality and experienced owner, sponsor and management team with proven track records in relevant industries
    4. Financial Partnership – Business Owner/entrepreneur must have a significant financial stake
    5. Congruent Goals – No conflicting goals or interests

 

Company and Product/Service

    1. Competitive Edge – The company should have an identifiable competitive edge within the industry with strong sales potential of the product/service
    2. Product/Service Feasibility – Product/Service demand and technology must be proven.
    3. Market Potential – Sales Potential of the product/service. Growth potential of the market. Niche Market

 

Investment

  1. Strategy – Well-conceived investment strategy plan in place. Investment should be friendly in nature.
  2. Size – Equity investment between $500,000 and $5 million; and representing no more than 50% of the common shareholding of the company.
  3. Target Market – Investments should be within the sectors and industries identified.
  4. Identifiable Exits – There must be a well-defined exit strategy.

After a company has passed the Investment Assessment Criteria, then an Investment Rating measuring the various risks associated with the project shall be assigned. Each rating class will be assessed a different hurdle rate (IRR) for the expected return. As a result, a two-dimensional risk/return perspective will be used in the evaluation process.

The Investment Rating System for investments made by the VCEFL will contain five (5) rating classes IR1 to IR5. IR1 is the least risky risk level and will be assigned the lowest hurdle rate (IRR). The IR5 rating will correspond to the most risky and be assigned the highest hurdle rate. These Investment Ratings are judgmental and based on the information provided and assessment of the probability of loss.

 

Venture Capital Equity Fund Limited

Victor E. Bruce Financial Complex
6-10 Post Office Street 
Scarborough 90012
Tobago

Phone: 868-299-0771 ext. 2702; 2705
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