- Focus of the fund is to invest in existing companies with established revenues and a profitable business model, however
- 20% – 30% of the fund will be invested in start-up companies with a successfully proven business model
- The fund invests both in capital/equity of the company, as well as providing mezzanine financing
- In case of mezzanine loans, there are possibilities that the company owners do not have to pledge their shares
- For sums up to EUR 200,000 we finance 100% of the necessary funds
- For sums above EUR 200,000 we finance up to 55% of the necessary funds (the remaining sum can be financed by the bank, owner or another investor)
- Investment can be used to finance both fixed assets and working capital
- The investment cannot be used to finance buyout
- Fund size: EUR 15 million
- Maximum investment amount in a single entity: EUR 1,5 million
- In case of a start-up company the first investment can amount to EUR 50,000 – 200,000 with the rights to invest more and acquire additional equity in the future
- Strong management team (competence, experience, motivation, integrity and energy)
- High growth potential, including markets outside Latvia
- No significant business risks
- Industry is not renown for dumping and price war situations
- Product of the company has a distinct competitive advantage
- Clear and identifiable investment exit possibility
- Transparency of information
- Positive cash flow, that covers mezzanine interest payments
- Potential of significant increase in growth and profitability
- Mezzanine price would consist of a fixed % rate plus a bonus, which depends on achieved financials of the company (i.e. EBITDA growth)
- In separate cases – requirement of collateral
- Mezzanine can be subordinated to a bank loan
- Proven viability of the product and business model
- Existence of first clients
- Big interest from potential customers
- Financial participation of the entrepreneur in the project
The fund invests in different industries
(except the prohibited ones).
- Manufacturing (food, electronics, metallurgy, construction materials, chemicals, pharmacy, processing of agricultural products, timber, engineering and other products)
- Information technology
- B2B services
- Immoral industries (alcohol, tobacco, wagers, weapons)
- Insurance and financial intermediation
- Fisheries and aquaculture (primary production, not further processing)
- Agricultural products and livestock farming (core product extraction)
- Companies in financial distress
FLYCAP VALUE ADDED: INVEST MONEY, TIME
AND KNOWLEDGE, HELP TO FIND BUSINESS CONTACTS
AND SHARE EXPERIENCE.
- The company's strategy development
- New clients, finding export markets (FlyCap have contacts abroad)
- New product creation
- Sales professionals evaluation and recruitment
- Experience in Mergers and Acquisitions
- Accounts receivable risk management and risk mitigation
- Management motivation with bonus system
- "Cross-selling", and "Affiliates" scheme development
- Investment in the latest technology that increases productivity
- Product profitability analysis, exclusion of unprofitable and non-strategic products
- Pricing policy improvement, the introduction of higher mark-up where it is possible
- Achievement of better conditions in the negotiations with customers and suppliers
- Adoption of ISO and "lean management" standards in production process
- Employees evaluation using KPIs and introduction of performance-linked compensation system
VALUE ‘MULTIPLE’ INCREASE
- Corporate governance and the improvement of transparency increases the value of the company (the Fund role in the world has proven)
- The company's turnover will increase and increase the competitiveness of the assessment factor (Multiple)
- New product creation
- Establishing of autonomous and self-sufficient business management and administration
- Organizing the tender at the exit usually results in higher valuation multiple due to competition
EFFICIENT CAPITAL STRUCTURE
- A higher proportion of credit financing structure at a reasonable EBITDA / credit payment indicator
- FlyCap team has extensive experience in achieving better conditions with the banks in complex transactions
- New product creation
- Capital investments vs. rental decisions
- Cash flow improvement due to effective management of working capital
Press release here
Press release here
The suggested approach is to complete the FlyCap application form. Another approach could be sending a company presentation containing answers to questions in application form.
After evaluating the application, FlyCap informs the entrepreneur of further steps. In case of confirmation, a meeting with management and shareholders is arranged.
After the first meeting, an analysis of the company and the transaction is performed. In case of successful results, an agreement of cooperation conditions is negotiated in form of a letter of intent.
An investigation of company’s financial, tax, legal and business position that takes 2-4 weeks, depending on information availability.
During the due diligence, shareholder and investment contracts can be coordinated. If Due Diligence results in success, shareholder and investment contracts are signed and investment takes place.
A member of FlyCap is elected in the company’s advisory or management board. FlyCap team contributes their time, contacts and expertise to help the company develop and increase its value.
After 4-6 years FlyCap plans to sell the shares it owns. Potential exit paths are: company management, other shareholders, strategic investor, financial investor, IPO or other options.
Partner. 5 years of experience in BaltCap, where Jānis managed 5 investment projects. Afterwards he invested and managed assets of private business angels. Janis has been actively involved in managing a portfolio with net worth of EUR 17 million, MSc. degree from Stockholm School of Economics (Sweden).
Partner. 4 years of experience investing and managing assets of private individuals, involvement in 7 investment projects with net worth of EUR 15 million. Before that, 10 years of experience working in the banking sector. Executive MBA degree from Stockholm School of Economics.
Partner. 6 years of experience in consulting and managing investment transactions, involvement in more than 10 investment projects with net worth of more than EUR 14 million. MBA degree in finance from Riga Business School.
Investment analyst. Market research, reporting to investors and FCMC, performing certain CFO functions for portfolio companies. Former experience: Banking & Capital Markets (Latvia); NATO HQ (Belgium). LL.M in Law & Finance, Riga Graduate School of Law.