The Fund will target companies with information technology products and serrvices that have one or more of the following attributes: revenues up to $50 million in annual sales; customers who can attest to product and service quality; companies that have achieved profitability and positive cash flow but need equity capital to cover the negative earnings and cash flow while increasing marketing, production and sales. Target companies should have experience and highly motivated management, and ideally, meaningful personal investments in their respective companies.
The Fund’s investments will be made through equity, equity equivalent and venture capital related investment transactions with management of selected companies. While the investment strategy is to seek capital appreciation through securities that have preferences to common shares or that have redemption obligations to limit downside risk while retaining the equity upside, the Fund’s investments also may provide dividend and interest income in certain situations.
The Fund’s industry focus will be investment opportunities in the Internet cloud technologies sector. The Principals believe that companies operating within this sector are creating technologies that will allow their customers to conduct their businesses in a more cost effective, timely and efficient manner. As a result, NextGen feels that targeting these companies will provide a more predictable, sustainable, and ultimately valuable portfolio for the Fund. Consideration will be given to companies in the following sectors: Healthcare, Business Enterprise, Financial Services, Education and Government.
The Fund will invest principally in companies headquartered in the mid-Atlantic region, although it is permitted to invest elsewhere throughout the United States and Canada. NextGen Managing Directors believe the mid-Atlantic region has been traditionally underserved by venture capital firms, that there are a significant number of attractive investment opportunities and, based on their prior experience investing in this region, that being located geographically close to Fund companies permits greater personal interaction and value-added contributions, and that currently there are extraordinary opportunities to obtain attractive pre-investment equity valuations in dynamic well-positioned, regional, private companies.