Our Approach
- Home
- Our Approach
The Gen3 Approach
Gen3 Innovations Lab will target opportunities located in industries that are
currently experiencing a trajectory of growth and ideally posses the following
attributes:
Financial
- Recurring and contractual revenue streams – Annual revenues over $5.0 million
- Annual EBITDA over $1.5 million
- Cash flow positive for three years +
- Low ongoing capital expenditure needs – Profit margins of 15%
Business
- Strong middle management
- Private and concentrated ownership (70% +)
- Motivated sellers
- Opportunity for Principal to add value
- High operating leverage
- Low customer concentration and churn
- Commercial customers
Industry
- High organic growth potential
- Large, fragmented market
- High contractual customers (recurring revenue) – Non-cyclical
- Competitive barriers w/ IP
Geography
- USA headquartered, but can have a multi-national arm of the business
Financial
- Recurring and contractual revenue streams - Annual revenues over $5.0 million
- Annual EBITDA over $1.5 million
- Cash flow positive for three years +
- Low ongoing capital expenditure needs - Profit margins of 15%
Business
- Strong middle management
- Private and concentrated ownership (70% +)
- Motivated sellers
- Opportunity for Principal to add value
- High operating leverage
- Low customer concentration and churn
- Commercial customers
Industry
- High organic growth potential
- Large, fragmented market
- High contractual customers (recurring revenue) - Non-cyclical
- Competitive barriers w/ IP
Geography
- USA headquartered, but can have a multi-national arm of the business
What We Look For
With committed capital from family offices and without the typical constraints of a traditional private equity fund, Gen3 and their Equity Partners have the ability to provide patient and flexible capital for liquidity or growth along with a long-term approach to building and growing businesses in partnership with its founders and management.
Size & Stage
- Opportunity to invest $5 – $30+ million per transaction
- $10+ million in revenue or bookings
- History of, or a clear path to, profitability
- Typically first-time institutional capital
Investment Types
While we prefer to acquire majority stakes, our mandate is flexible:
- Majority or control transactions
- Structured equity
- High operating leverage
- Low customer concentration and churn
- Co-investments
Business Models
- Recurring or repeatable revenue
- Strong gross margins and unit economics
- High levels of cash conversion
- Attractive reinvestment characteristics
- Long-term sustainable growth
Industries
Our team has the flexibility to invest in a wide array of industries but we have prior experience in the following sectors:
- Vertical-market software
- Communications infrastructure
- Multi-site healthcare
- Business services
- Tech-enabled and information services
- Value-added distribution
- Many Others
Uses of Capital
- Founder liquidity
- Internal growth initiatives
- Acquisitions and industry consolidation
Situations We Avoid
- Start-ups or early-stage companies
- Turnarounds or deeply distressed situations
Size & Stage
- Opportunity to invest $5 - $30+ million per transaction
- $10+ million in revenue or bookings
- History of, or a clear path to, profitability
- Typically first-time institutional capital
Investment Types
While we prefer to acquire majority stakes, our mandate is flexible:
- Majority or control transactions
- Minority recapitalizations (with appropriate governance)
- Growth equity
- Structured equity
- High operating leverage
- Low customer concentration and churn
- Co-investments
Business Models
- Recurring or repeatable revenue
- Strong gross margins and unit economics
- High levels of cash conversion
- Attractive reinvestment characteristics
- Long-term sustainable growth
Industries
Our team has the flexibility to invest in a wide array of industries but we have prior experience in the following sectors:
- Vertical-market software
- Communications infrastructure
- Multi-site healthcare
- Business services
- Tech-enabled and information services
- Value-added distribution
- Many Others
Uses of Capital
- Founder liquidity
- Internal growth initiatives
- Acquisitions and industry consolidation
Situations We Avoid
- Start-ups or early-stage companies
- Turnarounds or deeply distressed situations
Strategy
Here at Gen3 we employ a systematic approach to search. We will organize
her search process based on people, tools, reporting, and sourcing. We believes
the optimal search strategy consists of 90% of time dedicated to targeted
proprietary outreach to qualified companies in a select set of industries, and the
remaining 10% of time dedicated to opportunistic lead sourcing through
intermediaries. Gen3 is currently building her deal pipeline in order to
contact business owners as soon as funds have been committed and wired to
Gen3’s bank account. we currently building her target list of companies using
ReferenceUSA, D&B Hoovers, Axial Networks, PrivCo, and through brokers. Alexis
is also actively connecting with current searchers and successful ETA CEOs, who
are mentoring her and helping to guide her throughout this process.
People
Gen3 intends to hire four interns and organize them in teams of two across
two industries at a given time. Interns will be tasked with data gathering and
analysis, developing initial investment thesis, managing initial outreach
communication with owners, and reviewing confidential information
memorandum (CIM) on prospective target companies. Gen3 intends to
outsource some of the tedious data gathering tasks to overseas contractors
through platforms such as Upwork.
Tools and Reporting
Gen3 uses sophisticated marketing technology to power the search and due diligence process. Tools like customer relationship management (CRM) tool such as Zoho, SalesForceIQ, or Pipedrive are used to manage the communication with owners, brokers, and intermediaries.
A customer relationship management (CRM) tool such as Zoho, SalesForceIQ, or
Pipedrive will be used to manage the communication with owners, brokers, and
intermediaries. Ms. Miller plans to use email automation tools such as Yesware to
send semi-customized emails to business owners. To market Gen3 Innovations
Lab to owners and brokers, Ms. Miller plans to set up a user-friendly website and
design and print business cards and brochures. She will use reporting
functionalities of the CRM and email outreach tool to create weekly metric reports
to gain visibility into her team’s weekly efforts to understand how to iterate and
improve the team’s process.
Our Commitment
We are committed to nurturing a culture of collaboration, integrity, and excellence in every aspect of our operations. Our team is dedicated to providing unwavering support to the businesses we partner with, ensuring that they have the necessary tools and resources to thrive in an ever-evolving market.