Private Equity Investments
Unlike publicly reporting companies, investing into a private enterprise requires a much higher level of due diligence. This is even more of an issue when we are considering investing into more complex and technology based companies. While this process can become arduous, when we find a “diamond in the rough” the results are even more rewarding. Based upon years of investing experience, as well as our background in management consulting and investment banking, we incorporate a loose but structured system to grade the health and potential profitability of a company.
A S.M.M.A.R.T. Approach
Prior to considering an equity position in a private company, we rate the enterprise on several factors using our proprietary algorithm for both measuring the health and operations of a given enterprise. Drawing upon Taurino Capital’s background in management consulting and investment banking, we are seeking to efficiently measure a company’s current status, as well as potential for increased growth and/or decreased cost savings which will translate into a bottom line increase in the enterprise value. Dubbed the S.M.M.A.R.T.P. system our approach to analyzing company potential based on the following factors:
SALES
Nothing happens in business until a sale has been made. Therefore when analyzing a company we seek to know what are the sources and quality of the company revenues? How unique is the sales process? Is it dependent on one person or factor, or can it be duplicated? What is the cost of acquiring a new customer and is the model(s) of distribution sustainable? What systems or processes can be added to increase revenues and what additional costs does that entail? These are a few of the questions that we must understand prior to investing into a private company. In almost all cases we are seeking to add value to the company and an increase in organic, profitable sales is one of the most direct ways of achieving this goal.
MARKETING
Marketing is almost always a deciding factor of any company’s success and will usually dictate its position in the marketplace. With proper marketing the company will have a steady source of sales which translates to a healthy enterprise value. In the last 25 years the internet has changed the rules of marketing and almost every company is paying attention to its online presence including social media. Marketing is a science and an art form that we take very seriously at Taurino Capital. Consumer behavior and what drives people to respond is a subject that one can spend a lifetime mastering. When we analyze a company we seek to understand exactly how the company is marketing itself and how that translates into branding and imaging. We can usually add value to a company’s marketing efforts as this can directly affect the value of a company .
MANAGEMENT
Management makes all the difference! When we invest into a company we are really making an investment into the people who are guiding the vision. Experience has taught us that an excellent manager can make a mediocre company great while a bad manager can ruin even the best situation. At Taurino Capital we look at ways that managers can optimize their staff starting with their number one employee, themselves! We have spent years trying to isolate the factors that makes the difference between a top performer and an almost ran. We have identified some common characteristics and have developed ways to incorporate these traits into our own managers. When we analyze a company we look not only for those people who may already exemplify the mark of greatness but who also can be coached into a position of maximizing their potential for success.
ADMINISTRATION: ACCOUNTING, LEGAL, HUMAN RESOURCES
Marketing is almost always a deciding factor of any company’s success and will usually dictate its position in the marketplace. With proper marketing the company will have a steady source of sales which translates to a healthy enterprise value. In the last 25 years the internet has changed the rules of marketing and almost every company is paying attention to its online presence including social media. Marketing is a science and an art form that we take very seriously at Taurino Capital. Consumer behavior and what drives people to respond is a subject that one can spend a lifetime mastering. When we analyze a company we seek to understand exactly how the company is marketing itself and how that translates into branding and imaging. We can usually add value to a company’s marketing efforts as this can directly affect the value of a company .
RECRUITING
Sports teams are obsessive about which players they can recruit. They understand that the difference between winning and losing comes down to the talent of the players on the team. We see business in a very similar way; it all comes down to hiring and retaining great talent. What motivates people to work at one place versus another? Is it just about money? Convenience? Employee turnover can be detrimental to the long term profitability of a company and so once hired, retaining talented employees can be just as important. Through a variety of bonus and incentive programs, talented employees can be recruited and retained so that the company can continue to experience growth for the benefit of all stakeholders. The balance between people and profits is an important factor that we look at prior to investing into a private company.
TRAINING
Training of new hires as well as existing employees can make the difference between a good and great company. Consistent and engaging training can be viewed as not only a way to improve employee performance but also as an additional benefit to further motivate employees. The main challenge is how to create engaging training programs that both educate and bring fulfillment to employees without a sense of boredom. When dealing with talented, intelligent people training must be well thought out or it can be detrimental to employee morale. At Taurino Capital when we analyze a company we can always see a direct correlation between the quality of the company and its training programs. If the company is lacking in its training programs we insist on designing and implementing programs as part of our involvement.
PRODUCTS & SERVICES
The company’s products are the final step in our analysis. If the above mentioned factors are not in place that will affect our decision as to whether and/or how we invest into the company. At Taurino Capital we continuously seek to gain efficiencies through data analysis and improvements to processes. Most importantly we analyze how well and to what degree does a company’s products meet the customer’s needs. Our philosophy is that successful companies come as close as possible to meeting or exceeding customer expectations while maintaining a reasonable profit margin. Quality is always more important than profit in this equation and if we cannot deliver both then we decline to be involved. We seek production processes that are scalable and sustainable. When all of our requirements are aligned we invest into a company with as little delay as possible.
Interested in working with Taurino?
We are ready to invest and finance companies whose vision and goals are aligned with our own. Contact us to see if we match up.