Overview of Investment Interests
Ecosa Capital will specifically target high-growth companies that seek an alternative source of financing to conventional providers in the marketplace – private equity investors, banks, and asset-based lenders. By speaking with hundreds of entrepreneurs and alternative sources of financing in these markets over the last few years, we found green companies are seeking funding from sources that understand their markets, share their ethos, and therefore, evaluate risk more appropriately.
Target Markets
We will invest in three segments where sustainable business principles and practices provide competitive advantage:
1. Food & Agriculture – natural, organic and local
2. Energy – renewable, clean and efficient
3. Building Products – appropriate, recycled, and renewable
We have chosen to begin our efforts by focusing on these areas because they are underserved large and fast growing international markets. They also have the potential to provide significant deal flow and risk diversification with significant cost discounts and price premiums to traditional competitors in the same markets. We intend to raise subsequent funds to invest in companies addressing the markets for clean water and waste mitigation. Ecosa’s value proposition is well understood by business owners and investors in these areas.
Client Profile
Ecosa intends to invest in small to mid-size, profitable, environmentally friendly firms that require cash-flow or asset-backed debt-based financing to achieve the next stage of their growth. We will seek to invest in entities that, as a general matter, have been operating for at least two years and that such companies will have consistent histories of cash flow, demonstrated market differentiation, and well-defined opportunities for growth. Ecosa expects that, as a general matter, these companies will have financial backing provided by private equity, venture capital funds, banks and/or other financial or strategic sponsors at the time Ecosa would provide growth capital.
We anticipate that our portfolio will be comprised of investments in private sustainable companies in their emerging or expansion-stage. Such companies will generally use our capital to finance organic growth, equipment, acquisitions, and general working capital. They typically will have the following characteristics:
1. Strong management team;
2. Large addressable market;
3. Defensible market position;
4. Operating history of at least two years;
5. Annual revenues over $2 million;
6. At least one year of historically positive EBITDA;
7. Preference for debt capital to grow business; and
8. Product or service in one of Ecosa Capital’s target markets.
We anticipate that our portfolio will be comprised of investments in private sustainable companies in later rounds of financing, which we refer to as expansion-stage companies. To a lesser extent, we make investments in established companies comprised of private companies in one of their final rounds of equity financing prior to a liquidity event such as an anticipated merger, acquisition or initial public offering, or select publicly-traded companies that lack access to public capital or are sensitive to equity ownership dilution.