We are not a typical equity firm. We selectively target companies in the lower market (typically companies with less than $5 million EBITDA). We fundamentally improve business operations and accelerate growth. We are not undertaking financial engineering. We think and act like entrepreneurial business owners, not passive investors. We maintain a disciplined focus on the upper and middle segments of the lower market, and seek to make strategy led investments in partnership with business owners and founders. Our focus on strategy-led investments is where the complementary skill set of the partnership between TFCG and company management can be applied to create value. Returns in our model are derived directly from the execution of our investment strategy and from fundamental improvements – operational, managerial, financial – that we enable during our ownership period.
Meet Mr. Burkett
Leader of the Capital Group
“Do not become your own limiting factor.”
Disciplined Core Market Focus
We focus on the upper and middle segments of the lower market. Businesses of this size benefit the most from our direct involvement. It is in this segment of the market where we as a firm have the most to offer. By focusing our efforts here we can produce differentiated results for our investor partners including the owners/founders of the businesses in which we invest. We believe inefficiencies in this segment of the market afford the most attractive investment opportunities from a risk/return perspective. The engine of economic growth in this country is small businesses. By investing our time, effort and capital here, we can help build the next generation of work class businesses, derive differentiated results and create acquisition targets for investors in the lower middle market.
Strategy Led Investments
Our investments may be standalone businesses or may involve the simultaneous acquisition of multiple companies to create the necessary platform to achieve our investment goals. We are generalist in terms of the businesses in which we invest, but the unifying theme of our investments is a cohesive strategy, developed at the outset, that forms the basis of an execution plan that is rigorously pursued to improve the underlying business operations, accelerate growth, create and/or enhance competitive differentiation and substantially boost profitability. Our firm’s structure allows us to be more creative and flexible in the types of transactions we evaluate, and in the manner in which we structure our investments. This allows us to best satisfy the interests of varied constituents – founders/owners, management, lenders, employees and investor-partners – in each individual transaction. We want to “control our own destiny” as much as possible in terms of generating results. That is, we do not rely on economic or other forces that are beyond our control or influence to derive our results. We believe that rigorous execution of a sound business strategy is the key to driving fundamental value and generating results, while best controlling downside risk. We believe that the days of high leverage and ever-ascending purchase price multiples is a limiting model. Without a differentiated business strategy, the ability to generate fundamental value, and thereby derive differentiated results, is severely restricted if not extinct. For a firm of our size, our partners have remarkably diverse backgrounds and skill sets. It is this experience that allows us to work with founders and management to actively assist in the execution of the strategy, rather than to act as passive investors. Change, and the ability to adapt to it, is a business reality in today’s economy. Only by thoughtfully exploiting changes underway in a given marketplace can businesses emerge as leaders in the future.
We partner with founders/owners and senior management of businesses who have created valuable franchise but who, for personal, professional and financial reasons, have reached a stage in their business life cycle where they desire outside resources – managerial, operational and financial – to help them take their businesses to the next level, while also addressing their lifestyle objectives. Our philosophy is to partner with business founders/owners to help them achieve a shared long-term vision for the businesses they have created. We are often the first non-family or non-founder investors in the businesses in which we invest. We do not generally “cash out” business owners entirely – rather we structure our transactions to align interests and allow business founders/owners to benefit from the dramatic value creation that we can create together. Very often, the single largest repository of knowledge and experience about a given business is the founders/owners of that business. We value that knowledge and experience and want to build on it. Only by creating a real partnership can we truly access this value as the foundation for our investments. We provide substantial, tangible value to business founders/owners by bringing a wealth of experience, skills and technology that are not often present in smaller companies. By combining our strengths, we can accelerate growth and value creation beyond that which could be accomplished on a standalone basis. We are business owners and entrepreneurs ourselves, and we welcome and enjoy working with other entrepreneurs.