The Difference

We bring significant value-added resources to our portfolio companies in a segment of the capital markets “orphaned” by larger funds. Our investment thesis begins and ends with people. We value the management teams we’re privileged to work with, respect their hard work, and do not wish to distract them from their operating progress with protracted capital raising efforts.

Most institutional capital today is advertised as “value-added.” Unfortunately, this is not always the case. Below are a few examples of areas where we assist our companies.

People Matter Most

We invest in people. All great companies have one thing in common—excellent management teams. If requested, we help our companies recruit additional talent to their ranks, which is critical to sustaining year-over-year growth. A few of these areas include:

  • Identifying and recruiting candidates for CEO, COO, CFO, VP of Sales, and Board of Director positions
  • Leveraging our network to conduct reference checks on prospective key hires
  • Negotiating compensation agreements and terms of employment
  • Assistance with difficult situations, including severance and release agreements
  • Managing conflict within the executive team
  • Management mentoring
Scaling a Sales & Marketing Organization

We have significant experience and a focus on growing sales organizations. For capital efficient companies, many problems are solved through revenue growth. We can assist on an as-requested basis with:

  • Online lead generating and customer acquisition strategies
  • Recruiting, interviewing, compensating and hiring sales representatives and VPs
  • Creating and troubleshooting sales architecture, starting with lead generation all the way through to customer contracts
  • Determining sales territories, quotas, base rep compensation and commissions, etc.
  • Tracking sales KPIs and adjusting the model accordingly
  • Advising on strategic reseller agreements
  • Pricing strategy
  • Strategic partner and customer introductions, utilizing Eastside’s network
Getting Things Done

Execution is mundane, but it’s the key to sustaining success. Our entrepreneurs don’t have to reinvent the wheel, as we are a resource for best practices related to budgeting, insurance, payroll, benefits plans, office leases, accountants, bankers, lawyers, etc. Here are a few of the areas where we can support our companies if they choose to pull us into these conversations:

  • Financial budgeting and tracking outcomes
  • Monthly financial reporting practices & quarterly Board reporting packages
  • Structuring incentive stock option plans—size, allocations, vesting schedules, termination, etc.
  • Managing intellectual property and licensing agreements
  • Reducing customer churn
  • Managing employee turnover
  • Managing expenses of third-party professional service providers (legal, accounting, software development, etc.)
  • Emergency planning
  • Selecting and negotiating corporate insurance policies
  • Establishing employee benefit plans and targeting fringe rates
Optimizing the Capital Structure

The key to investing in the Capital Gap is to keep the interests of all shareholders aligned. We help our management teams optimize their capital structures by:

  • Working with management to anticipate and asses corporate financial needs
  • Negotiating term debt, vendor, A/R and inventory financing on behalf of companies
  • Providing assistance raising outside equity capital
  • Modeling waterfall analysis to show management the implications of additional capital
  • Assessing tradeoffs of raising additional capital and extending the exit timeline

As entrepreneurs, our team completed more than fifteen acquisitions. As investors, our companies have completed dozens of acquisitions. We know the positive (and negative) impacts these processes can have on a business, and we’re a reliable partner when considering significant strategic investments. We frequently get involved with:

  • Guidance on acquisition strategy
  • Due diligence on target company(s)
  • Negotiating, structuring and executing definitive agreements
  • Transition and integration planning
  • Capital strategy
Making Exits Happen

Liquidity is elusive. Rarely does a successful exit occur without careful planning that starts 2-3 years prior to a liquidity event. We know what acquirers look for, and we start putting those pieces in place on day one. These include:

  • Understanding acquirer’s motivations in the context of industry dynamics
  • Managing customer pipeline and customer waterfall to support growth assumptions and margin sustainability
  • Managing costs to enhance profitability and reduce working capital adjustments at closing
  • Identifying and tracking one-time expenses for potential EBITDA add-backs
  • Completing financial audits for 2-3 consecutive years
  • Anticipating an acquirer’s virtual data room and adopting practices to begin proactively populating it
  • Getting retention/bonus agreements in place with key personnel

We’ve seen the negotiating tools of both strategic and financial sponsors, and we advise our management teams on:

  • The timing of exit processes relative to the market saturation and the expected direction of market multiples
  • Filtering high-level exit discussions with potential acquirers to mitigate operational distractions
  • Assessing management and capital dynamics within potential acquirer
  • Selecting, interviewing, and reference checking an investment banker
  • Negotiating banker’s engagement letter
  • Managing investment banker and shareholder exit expectations
  • Building consensus across Board and all shareholder classes for exit event