In reviewing prospective Portfolio Companies and selecting investments for the Fund, the Fund Manager will take into account such factors as:
Company’s overall growth prospects
Competitive advantage due to technological edge and/or strategic positioning including:
- Attractive initial valuation, or displays high growth potential
- Clear and growing market opportunity, preferably with a global perspective
- Clear path to value creation and realization
Financial strength and depth
- Intellectual property rights
- Advantages in critical supply chain management
- Access to key customer relationships
- Production efficiencies
- Access to key employees
- First time mover advantage
High-quality management team who adhere to the highest standards of transparency and accountability, including:
- Reasonable profit margins.
- Capital resources.
- Potential return on investments.
- Conducting a legal and background check employing an external consultant or private investigator to conduct legal due diligence on the Portfolio Company and management
- Possessing research and development capabilities or willingness to develop skills and implement appropriate business processes
- Abides by all applicable regulations
- Possesses an ownership and management succession plan
All the above-mentioned factors shall be considered in developing the form of financing and participation that the Fund will engage with the Portfolio Company.
In order to mitigate the Fund’s investment risk, as well as to verify the financial viability of a target company, each candidate company, first and foremost, is expected to be able to compile the necessary financial statements (or projections, in the case of start-ups) and a solid business plan to gain access to financing by the Fund.
In order to protect its interests, the Fund shall seek membership on the boards of directors of each of its Portfolio Companies in which it holds 10% or greater stake. The Fund will also use other appropriate means for verifying that a company is committed to improving its business tactics, such as working closely with the donor community that is currently implementing projects to support business development initiatives in Palestine – specifically those organizations that have imposed requirements on targeted companies to adopt their programs and participate in all business development services provided by the donor organization.