Opportunity
Abundance Partners has always found it most effective to invest with the macro winds at our back. Our track record in assessing and anticipating macro trends has contributed to significant investor returns in the hedge fund since 2003. After five years of private investment activity through the hedge fund, in 2012 the firm noticed a growing funding gap in certain stages of the venture landscape. With the success of Facebook, Twitter, and other high profile tech companies, a large pool of novice capital flowed to companies in the seed and angel stages. Simultaneously, the scale of established venture capital funds continues to grow, with the largest firms capturing a disproportionate amount of funding dollars.
Traditionally, these large venture funds primarily seek investments in later stage companies with higher valuations, in the hopes of billion dollar exits. As a result, many attractive opportunities in the post angel, pre-series B rounds with compelling exit potential in the $50MM – $300MM range, have trouble attracting the capital they need to continue growing. Very few companies, however, achieve the billion plus dollar exit, while many more are capable of the smaller exit. Abundance Private Opportunity Fund was established to capitalize on this “funding gap” to the benefit of both investors and entrepreneurs. While our focus is primarily on the sub $300MM exit opportunities, our extensive deal flow occasionally provides the potential for the billion dollar exit as well.
Strategy
Abundance brings a unique perspective to the investment process due to its extensive experience in both public and private markets. When evaluating investment opportunities our public markets experience has helped to inform our private market valuations and portfolio structure.
Investments in the Fund are balanced across early stage, growth capital, and income generating opportunities, while remaining industry agnostic:
- Early Stage: For our early-stage investments, we look for great teams, vision, and a viable business model that fills unmet needs in the macro environment. Our investments at this stage are typically in the seed round and are sized commensurate with the degree of risk.
- Growth Stage: Our growth-stage investments provide funding for entrepreneurs who have demonstrated a tangible business model with established customers and growing revenues. We look to partner with breakout companies where our investment helps accelerate their business momentum. When appropriate, these investments are in collaboration with other strategic partners to help a company achieve its goals.
- Income generating opportunities: Throughout the course of business there are opportunities that present themselves which are designed to generate significant cash flows for a limited period of time. As a result the focus is not to create enterprise value. While such opportunities do not come along often, Abundance has successfully identified and capitalized on a number of them in the past. When we are not able to find the right companies of this nature to back, we’ll often create them ourselves.
Criteria
While we typically take a broad and opportunistic approach to the investment landscape; there are certain common criteria we seek in the companies we back:
- Exceptional Teams With a Passion to Win: Innovative founders with proven management capabilities, passion for building great businesses, and adaptability to redirect when necessary in an evolving landscape.
- Scalable and Efficient Business Model: Clear business and revenue model to create a sustainable and profitable enterprise.
- Solid Traction: The degree of traction required is relative to the stage of the company’s development. It could manifest in the form of technology development, pilot users, customer traction, or sustainable revenue growth.
- Alignment of Interest: We insist on proper alignment of interests between founders and investors.
- Pragmatic Valuations: We leverage our public markets experience when determining appropriate valuations. Company valuations need to reflect a realistic sense of accomplishment and future potential. We seek to ensure that the risk/reward characteristics are reasonable for both investors and founders.
Abundance is excited to meet ambitious entrepreneurs who share our philosophy and approach. If you fit that category and could benefit from our experience, relationships, and capital we look forward to hearing from you.