Investment Criteria

Slack Water Capital® provides equity gap funding to entrepreneurs and self-funded searchers acquiring controlling ownership of small and medium-sized businesses. We are seeking to invest in businesses and entrepreneurs featuring a combination of the following characteristics:

Industry

Mature, stable, and growing
Relatively simple product or service
Low risk of technological obsolescence
Primarily non-cyclical demand
Highly fragmented with opportunities for consolidation
Example industries of interest include:
- Home services
- Facilities services
- Skilled trades
- Professional services
- Value-added distribution
- Specialty manufacturing.

Geography

U.S.-based businesses in states or regions with favorable trends:
- Growing population
- Ease of doing business
- Attractive tax environment
- Availability of high-quality employees
Non U.S.-based businesses located in countries with:
- Developed rule of law
- Stable political environment
- Stable taxation and fiscal policies
- Stable currency

Business

Market leader or pathway to market-leadership
High level of recurring or re-occurring revenue
Limited level of project-based or one-time revenue
History of growth and profitability
Opportunities for growth and operational improvement
Low level of capital and working capital intensity
No material customer or supplier concentration
Strong management team and no key person risk
EBITDA of approximately $500,000 - $5,000,000
Fair purchase price and transaction structure

Operating Partner

History of academic, professional, and personal achievement
Highly motivated, passionate, energetic, persistent, and humble
Strong analytical and financial acumen
Excellent communication skills and ability to build rapport with people from diverse backgrounds
“All-in” mentality with a significant personal investment and/or personal guarantee of acquisition debt financing
Will manage the business full-time as their sole professional focus

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If you are an acquisition entrepreneur or self-funded searcher with a business under LOI that meets our criteria, and are looking for a value-add equity partner, we would love to hear from you!

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