How We Invest

Executive Summary

THE VERTE OPPORTUNITY FUND (“Verte” or the “Fund”) is an affiliate of Verte Capital, LLC and works in association with Pi Analytics, LLC. However, its stake holders are private investors interested in financial returns on investments primarily focused within the federal opportunity zones. Although the Fund will consider companies as potential investments, it is under no obligation to invest in any particular company unless the Fund, within its sole discretion, wishes to do so. The focus of Verte is to speed development and commercialization of paradigm-shifting seed and early stage companies with an emphasis on technology, life sciences, food and health. In addition, Verte plans to leverage technology assets coming out of the private sector as well as educational, research institutions and national laboratories. Verte will also serve as an advisor and potential investor to those interested in exploiting existing products and technologies within the United States.

The Fund has four main goals: 1. Be a catalyst for high growth businesses; 2. Serve as an essential component of the developing entrepreneurial ecosystem; 3. Support “Impact Investing” (investments where the intention is to generate measurable social impact alongside a financial return); and 4. Provide attractive returns for its investors.

Although one of Verte’s missions is to be supportive of and consider potential financing of seed and early stage opportunities (as well as other opportunities unrelated to the opportunity zones) that meet Verte’s standards for investment (typical of most early stage venture funds) Verte is under no obligation to invest in any particular company if not consistent with the best interests of the financial goals of its share holders. In this regard, Verte believes business success in early stage ventures must focus on (1) great leadership; (2) experienced team efforts; (3) focused execution; (4) continual updated business planning; (5) a scalable product or technology; (6) sufficient capital resources; and (7) strategic and competitive analysis.

Verte views itself as a “management development company” rather than a traditional “Venture Fund” since its focus emphasizes rigorous management skills in the exploitation of seed and early stage opportunities.

Investment Thesis

We invest in early and growth‐stage companies who may scale effectively in rapidly growing markets, are apt to dominate a given market, and display an exit potential.

Invest – Verte Opportunity Fund provides financing to chosen companies in exchange for an equity share or convertible notes in the company.

Early-Stage – There are many different stages of a business, making up its entire life cycle. The definitions of these different stages can be rather broad and may vary widely, depending on who you ask. Early-Stage, to our Fund, means the company has a fully-developed prototype of its product or service. A company at this stage is beyond startup stage and has begun operations, but may not yet be at the point of commercial manufacturing or sales. Their products or services may or may not be commercially available, or the business may have a few initial customers.

Growth-Stage – At this stage, companies have had their first initial orders, or perhaps a few customers. These companies are showing the ability to grow, but may not be able to fulfill or support large orders and need financing to effectively scale. As they reach scale, these companies may become public or be acquired by larger companies.

Companies – These are business enterprises, or firms, set up to conduct commercial business that maintains both the goal of longevity and the objective of future growth.

Company Attributes – No one wants to wait around on a team that accomplishes nothing, wastes time, or spins its wheels. In order to gain investment from one of our funds, a company needs to demonstrate the ability to innovate grow quickly in its early stage and scale effectively in its growth stage. The fund evaluates its potential investments across the company’s life cycles

Apt to Dominate – Market dominance is typically defined as the strength of a given product, service, or brand, relative to competitive offerings. Businesses in line to receive an investment from Verte Opportunity Fund must be able to clearly demonstrate these strengths. Businesses who are poised to dominate their given market usually can fall into three categories:

The business may be a Market Leader, with a brand new product in a new market. They also could be a Market Challenger, which may produce a better product or an improved service, that may capture market share. Firms may even dominate by being a Market Specialist, where they completely fill a niche market.

Given Market – Companies seeking investment should clearly understand their customers, and the competitive landscape.

Display an Exit Potential – As with any investment, the potential to make a return on that investment is the key determining factor. The Fund does not invest in what are known as lifestyle businesses, where the aim of the business is to sustain a particular income level for the founder. A return on investment for our Fund is typically produced by having a liquidity event. The two most common types of liquidity events are direct acquisitions by other corporations or private equity firms or an initial public offering (IPOs). The company may also merge with another to have a liquidity event. A company must be able to demonstrate the capacity to have a liquidity event in order for it to receive an investment from Verte Opportunity Fund.

The Verte Opportunity Fund – uses this Investment Thesis because it helps remove some of the emotion from our investing. We highly believe that a disciplined Investment Thesis can be the foundation for a profitable portfolio.

Early Stage Capital

At Verte, we know not everyone is cut out for “start-ups.” There are easier ways to make a living. Yet you insist. Dismiss the odds. Defer the niceties that others take for granted. That’s why we celebrate entrepreneurs. We have founded “start-ups,” worked at “start-ups,” and honor “start-ups.” We know it’s not just a job. It’s your life’s work.
It’s ours too.

In detail…

We look for “start-ups” and “early-stage” companies founded and led by passionate entrepreneurs with business concepts that match our experience and interests. Our focus is on companies that pioneer new approaches to disrupt large industries in markets already characterized by significant spending. These tend to be big disruptive ideas that are ripe for reinvention and have the potential to rapidly scale to market leaders. Our team prefers to roll up our sleeves to help build iconic companies from the beginning.

Verte focuses on “early-stage” venture capital investments in technology-enabled businesses that disrupt existing, multi-billion dollar industries. We seek opportunities where we have confidence in the entrepreneur, are excited by the business concept, and believe there is an attractive investment opportunity.

We enjoy building from the beginning true partnerships with the founders and management teams of our companies, so that we can have maximum impact on their paths to success. This involvement can take many forms beyond capital; we work closely with companies on their business models, implement scale through partnerships, and share our experiences in developing world-class brands.

In detail…

Our approach to investing is reminiscent to the early days of venture capital. It was about smaller funds, with fewer deals, and real hands-on collaboration between the name partners and the entrepreneurs they backed. We have had great success building companies, and we are passionate about helping the next generation of entrepreneurs change the world. We look to do a few things big and well – and build lasting billion dollar companies.

Verte invests in companies that can change the world. What we do is unique and different. We are focused. Our sweet spot is on businesses that empower consumers and disrupt existing, multi-billion dollar industries. We invest in “speed-ups” –helping companies take ideas from niche to mass and scale to capitalize on huge market opportunities. We are highly selective – typically investing in only two or three new companies per year. We are very hands-on and a true partner, working relentlessly with management teams, over a long period of time, to help build their businesses.

Growth Stage

We invest growth capital in extraordinary companies and entrepreneurs that can change the world. We help companies take ideas from niche to mass and capitalize on multi-billion dollar market opportunities.

Companies

We look for companies that are attacking large, traditional industries with innovative new products and services. Many existing industries are on the brink of disruptive change, driven by new technological possibilities and consumer psychographic trends. We aim to transform significant markets by leveraging technology and new approaches and in the process create massive value in our companies.

In detail…

We are business builders, not just investors. We get involved in “speed-up” situations where we believe our capital, time, and expertise can uniquely make a game-changing difference. Verte brings our tremendous passion, relentless focus, renowned reputations, unparalleled contacts, and unwavering commitment to helping build companies. We believe in a “built to last” approach, preferring to invest with a longer-term horizon to maximize both impact and returns.

It takes talent and passion, not just capital, to build great companies. At Verte, we have collaborated extensively with each company we invest in or acquire, developing an accelerated growth strategy, building a world-class management team, assembling boards of directors to extend the company’s expertise and influence. Moreover, we forge strategic alliances, positioning each company as a revolutionary in its field, disrupting the normal way of doing business.

Success in new markets is won by those who rapidly build momentum and aggressively lead the field. Verte focuses on building companies that can hasten “tipping points” and benefit from the change they help bring about. We take a long-term view when developing the companies in which we invest, looking closely at intersecting broad trends to ensure that our offerings will be of great value to consumers—and economically sustainable.

A Venture Capital Opportunity Fund

We focus on rapid-growth, high-yielding “start-up” investment opportunities

Team

Our priorities are uniquely built around supporting the entrepreneurial ecosystem and fully empowering the businesses that are revolutionizing their industries. With shared goals in mind, we strive to provide our clients with a full range of services that encourage growth and promote success.

In detail…

At Verte, our goal is to inspire, support, and grow the entrepreneurial ecosystem. With mutual and parallel success as our driving force, we provide our investors with a multitude of tools that help cultivate their business goals, both big and small.

We take pride in our established market relationships and are excited to offer our clients access to our expansive network of experts, our working alliances with many Universities and research institutions, and our connections with industry-leading financial organizations.

What’s more, we excel at recognizing commonalities, potential, and shared drives between companies and connecting them to one another, ultimately facilitating relationships that benefit both businesses.

With Verte serving to enable client success, we look to create an environment of transparency, teamwork, synergy, spirit, and collaboration. And what that looks like, is up to you. Our team has many years of experience serving as members of advisory boards, communication liaisons, and as brand representatives. The Verte team has the capacity and range to fill a void, help build a relationship, or enhance business as usual.

In detail…

We focus on helping high-potential companies accelerate their progress. But because every company has a different path to success, and every founder wants different things from their investor, this assistance takes numerous forms. It may include collaborating with management on company strategy and on building effective management teams; sales and business development leads and introductions; recruiting management or value-added board members; helping management devise a process for successfully on-boarding and integrating new team members; helping management implement a system for identifying the key metrics or performance indicators of the business and aligning the company around implementation; focusing on the consumer experience; assisting in the process of raising additional capital; and helping drive the liquidity process.

We look for businesses with innovative products and services in large markets that address significant customer needs. We like disruptive business models that eliminate intermediaries and shorten value chains. We favor marketplace opportunities-specifically, businesses that utilize existing infrastructure, excess capacity and, whenever possible, create recurring revenue streams. We prefer businesses that leverage a technology advantage and create a natural barrier to entry. We encourage a disciplined commitment to milestones and we appreciate capital efficient companies.

Early Market Share

We need to see early traction, because we’ve learned data is the best evidence of what resonates and what doesn’t with consumers.

Exit Strategy

Exit strategies are often overlooked with early stage “start-ups.” We specifically plan investments around the ability to exit early. We work with the founders to plan for and develop today’s process around a concentrated strategy to exit.

In detail…

Entrepreneurs live for the struggle of launching their businesses. But one thing they often forget is that decisions made on day one can have huge implications down the road. You see, it’s not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out.

Verte helps our investments, no matter what stage the company is in, to not only consider an exit strategy, but also create a plan. At Verte, we think of it this way: the business is an asset in which we have invested money. It has a revenue stream that supports your salaries and possibly a sizable distribution of yearly profit. It should be increasing in value so that when the time comes, Verte will be able to harvest additional wealth.

Planning an exit strategy is the most commonly overlooked consideration of a business strategy, yet the exit strategy plays a key role in determining the strategic direction for Verte OZ Fund investments. Vertet proactively plans an exit strategy with business owners, more over our previous track record of of exits proves this successfully.