We don't select our business partners by using a shotgun approach. Instead we concentrate in areas where we have significant operating and investment experience, including networking and communications, wireless and mobile applications, IT asset management and IT security.
We concentrate primarily on technology companies. We typically invest $5-10 million in successive rounds over the life of a company, with an initial investment in the $2-5 million range. The partnership also seeks out a limited number of 'special situation' technology investments, including investments in later stage turnarounds and restructurings.
We also play an active role in facilitating and financing corporate and academic spinouts. We have funded a number of spinouts originating at Boeing, France Telecom, Hewlett Packard, National Semiconductor, UC Berkeley and CalTech, and have demonstrated a keen ability to build teams around these technologies, culminating in great companies and successful exits for entrepreneurs and investors.
Following is a brief overview of the key investment criteria for Newbury:
We seek to make investments in the high growth industries of IT asset management, networking & communications, wireless and mobile applications and IT security.
We believe that great people are the most important asset in building great businesses. We look to partner with exceptional management teams with unparalleled commitment and track records of innovation and accomplishment. When necessary, we play a key role in identifying and attracting additions to management, but we don't invest in situations where the complete team needs to be replaced.
We do not believe in investing capital and disappearing. When we enter a partnership with an entrepreneur we share a common goal: creating a world-class business. Value creation takes patience, determination and hard work, and we step up to do our part. We provide strategic guidance and advice, make introductions to partners and customers, assist with management team development or help raise additional capital; whatever necessary.
We invest in companies that create products that will solve significant problems for readily identifiable customers. We look for companies whose strategy will allow them to enter a market with potentially rapid growth and establish a leadership position that can be defended. Companies should be targeting a market with annual revenue opportunities of at least $100 million and with annual growth prospects in excess of 30 percent.
As well as having the potential to dominate a niche market position, companies should have unique and superior products or services that provide a defensible and proprietary competitive position. This position can be achieved through intellectual property or other proprietary know-how, key channel relationships, superior product manufacturing or delivery systems, or any other aspect which can create high barriers to market entry.
Technology has led the way in the globalization of many sectors of the world's economies. Entrepreneurs, technology innovations and capable research and development teams are available around the globe, and we actively identify and invest in many such domestic and bi-national companies that have or seek to have operations in both their home country and the US.
We combine rich and proprietary sources of investment opportunities with a set of objective criteria for judging investment valuations. Factors such as a company's historic and estimated future performance as it relates to revenues, profits, cash flows, future capital and stock needs, industry trends and private and public comparable equity comparisons are used to help determine a fair valuation.