What our partners can expect during the investment process

Macrofox provides not just financing but also strategic guidance to startups and high-potential companies. Our key activities involve a meticulous process that begins with identifying potential investment opportunities and extends through a rigorous due diligence process to assess company viability.

Identifying Investment Opportunities

The first step is to identify promising investment opportunities. This process involves scouting startups or growth-stage companies that have the potential for continued and sustainable growth. We look for companies with innovative business models, scalable products or services, strong market potential, and a capable management team.

As in any other industry networking plays a crucial role in discovering these opportunities. Our professionals often rely on their extensive networks, including contacts in industries, academic institutions, incubators, and other investors, to find promising leads. Additionally, many firms proactively search for emerging trends and technologies that align with their investment thesis.

We actively follow market trends and research to identify sectors that are ripe for innovation and disruption.

Evaluating the Business Model and Market Potential

Once a potential investment is identified, we evaluate the company's business model and market potential. This involves understanding how our partner plans to generate future revenue, the cost structure, and the scalability of the business model. We assess the size and growth potential of the market the company is targeting. A larger and rapidly growing market is generally more attractive as it offers higher potential returns.

Team Assessment

The quality of the founding team is a critical consideration. We prefer teams with a strong mix of skills, experience, and passion for their venture. The ability of the team to execute on their business plan, adapt to challenges, and scale the company is closely evaluated. This assessment often involves interviews with the team members, reference checks, and reviewing their past achievements.

Due Diligence Process

Once a VC firm identifies a company as a promising investment, it embarks on the due diligence process. This comprehensive evaluation is crucial to assess the viability of the investment and involves several key components:

1. Financial Due Diligence: This involves a thorough review of the company's financial statements, cash flow projections, and overall financial health. The aim is to understand the company’s revenue model, profitability potential, and financial risks.

2. Legal Due Diligence: Legal due diligence includes examining the company's legal structure, intellectual property rights, existing contracts, and compliance with relevant laws and regulations. This step is crucial to ensure there are no legal obstacles that could affect the investment.

3. Market Due Diligence: Macrofox assesses the niche market in which the company operates. This includes analyzing market size, growth rate, competition, and market trends. Understanding the market dynamics helps us to gauge the potential success of the company.

4. Product or Service Due Diligence: Evaluating the product or service itself is vital. This involves assessing the technology or innovation behind the product, its market fit, unique value proposition, and competitive advantages.

5. Customer and Supplier Due Diligence: Understanding the company's relationships with its customers and suppliers provides insights into the company's market position and operational risks.

6. Strategic Fit: Finally, we firm evaluate how well the investment aligns with its own strategic goals and portfolio.

Decision Making and Negotiation

Based on the due diligence findings, we decide whether to proceed with the investment. If the decision is positive, the firm then negotiates the terms of the investment, which includes the amount of capital to be invested, valuation of the company, equity stake, and the terms of the shareholder agreement.

Post-Investment Activities

After the investment, our role often times extends to mentoring and supporting the company. This support can take various forms, including strategic guidance, network introductions, and assistance in subsequent funding rounds or eventual exit strategies.

Our activities are multifaceted and involve a mix of strategic scouting, meticulous evaluation, and ongoing support for portfolio companies. Our success hinges not only on its ability to identify potential winners but also on its thorough due diligence process to assess company viability and its ability to add value post-investment.