Investment Criteria

Charis Capital Ventures strives to provide entrepreneurs with the support they need to create profitable, growing businesses, while providing investors with outstanding investment returns.

We have organized this section into the following categories:

Our Investment Approach

Charis Capital Venture's investments continue to be found exclusively in the areas of Healthcare and Life Sciences, including associated Information Technologies. While opportunities are viewed individually, we look for the following elements common to all of CCV investments:

The Product(s)

  • Clearly defined market opportunities.
  • Possession of differentiated and proprietary technology advances.
  • Leading edge or breakthrough technology with a proprietary and/or a leadership position.
  • Products which address dynamic markets with high growth rates and substantial size.
The Management
  • Capable management teams with an entrepreneurial vision, drive, and pertinent experience in the tumultuous environment of a high-tech startup.
  • Experienced management identified for all the primary functional areas, usually sales, development, and operations.
  • A pragmatic and credible business model that can deliver attractive financial results.
  • Thoughtful assessment of the risks of the target market sector and those inherent in early stage companies.

Investment Areas

We are looking for home run potential in large and growing markets. Technology shifts happens in waves, and we look for companies that are targeting emerging technology waves. Currently, we are actively investing in the following areas:

  • Bioinformatics & databases
  • Biotechnology
  • Drug development
  • Gene delivery systems
  • Gene therapy
  • Medical devices
  • Molecular diagnostics

Since our fund is targeted at maximizing technology leverage in healthcare and life sciences, we will not invest in retail, franchise, or distribution companies. We also will not invest in real estate, construction, or natural resource harvesting opportunities. We may choose to invest in service companies that have a strong technology component and the opportunity to create proprietary intellectual property. By focusing on major technology innovations, we anticipate developing new leading companies in our target sectors.

Charis Capital Ventures invests in opportunities that offer a strong financial rate of return. But more importantly, a potential portfolio company or technology must offer core strategic value to CCV. We invest in opportunities only where CCV can either enhance a success factor or reduce a risk factor of the portfolio company. Charis focuses on generating opportunities that require relatively small amounts of capital but, if successful, can meaningfully impact CCV.

Our Investment Criteria

We are typically the first institutional investor in our portfolio companies. CCV invests at all stages of the growth cycle, from incubations and seed situations, to mezzanine and technology buyouts.

We also target special situation investment opportunities in later-stage technology companies that can benefit from the same skills and resources we bring to our early-stage investments. These investments could be divisional spinouts, buyouts, recapitalizations, industry consolidations or a variety of other possible transactions in both private and public companies.

CCV employs a disciplined approach to evaluating and investing in new portfolio companies. New investments must demonstrate the key elements common to all CCV investments. Some multi-stage investment opportunities may be described as follows:

  • Seed-stage companies with experienced management teams and/or unique structural advantages in emerging high-growth markets.

  • Early-stage companies with sustainable business models that address specific market needs in rapidly growing markets in the networked economy.

  • Expansion and late-stage growth companies that have reached critical mass and are seeking private equity to accelerate growth and become a dominant player in their markets.

  • "Dot-Com" companies spun-off from existing legacy businesses that benefit from a unique structural advantage due to established brands, management teams and/or relationships that can be better exploited in a separately owned and managed entity.

  • "Roll-up" platform companies formed by experienced management teams who plan to establish dominant businesses through the acquisition and consolidation of several "building block" companies within an industry segment.

  • Buyouts of established, profitable businesses in medium to high-growth areas with experienced management teams and attractive, recurring revenue-based business models.

Early-Stage Criteria

Although we may choose to invest at any stage of a private company's development, we believe that early-stage investments are the best opportunity to leverage our value-added capabilities.

We prefer to deal with an enterprise in its earliest form, and a high percentage of our investments are seed or first round investments. Second round investments are considered where there is a complete management team and demonstrated progress toward market leadership. In all cases, the process will include meetings with one or more CCV principals and, at some point, a presentation to the complete partnership.

CCV target companies should have the potential to attain leadership positions in fast-growing market segments of $250 million or more. Charis will typically invest between $500,000 and $5 million, either alone or as part of a syndicate; we will typically maintain a reserve of 50 to 100% for subsequent financing. We also make seed investments of less than $500,000 to support a promising project until the company is ready for a full round of financing.

Investor Status

Once we've invested in a company, we typically join the Board of Directors. We prefer small Boards that include one or two independent directors. Together, we do whatever it takes to build the fundamental value of the company and support management's vision. Specifically, we can:

  • Optimize business strategies to increase revenues and profitability;
  • Assist management in acquiring complementary product lines or businesses;
  • Help to build strong management teams; and
  • Create strategic relationships that enable management to expand its markets.

As hands-on investors, we expect to have an excellent relationship with the principals and key managers of each company in our portfolio. However, except in highly unusual circumstances, we do not expect to be involved in day-to-day management operations. Our fundamental role remains the creation of value to be realized at a liquidity event. The value creation process requires broad experience, access to quality deal flow, appropriate fund size and structure, and the disciplined implementation of a focused strategy.

Is Venture Capital For You?

Venture capital is not for everyone. You should consider whether venture capital in general, and Charis Capital Ventures in particular, is the right source of capital for your business. The following questions may help you to make that determination.

  • Are you looking for more than $500,000 in funding?
  • Has your company been in business for 2 years or more? Has your company already produced revenues?
  • Do you participate in a rapidly growing segment of the economy? Can your company grow at 20% per year, the rate required by venture capital investors?
  • Are you willing to dilute your equity stake in your company? Are you willing to take advice from your investors?
  • Do you have an exit strategy for your company?

Entrepreneurs who feel their business meets our criteria should proceed to the Submission Page and send us an executive summary or business plan. These documents should include:

  • a description of the business and market, including growth factors and competition,
  • financing requirements, including proposed uses of funding,
  • prior financing,
  • background on the key principals, and
  • a summary of the company's financial history and financial projections.

We do not sign NDAs. We receive so many plans, that if we signed every NDA request, we would quickly be swamped with legal documents. Our reputation depends on our professionalism and our ability to maintain the trust of the entrepreneurs with whom we work. We will take care to keep your materials confidential.

Preparing Your Business Plan

We suggest referring to our Resources page for information and advice on preparing your business plan and approaching venture capitalists, or to our Operations for information on how we review the business plans that we receive. The Internet resources Venture One and might prove especially helpful to first-time entrepreneurs.

A lengthy business plan is less important than a crisp, cogent, and focused articulation of the drivers of market success and the resources necessary to achieve a world-class outcome.

A Short Overview of Our Review Process

When the Fund receives a business plan, one of our Partners is assigned primary responsibility for the plan. The Partner will read the plan and present the business opportunity at our weekly dealflow meeting. At this point, the Partners may decide to contact the entrepreneur for more information.

At any point in this process, the Partners may choose to pass on the particular opportunity. However, we read every bona fide plan and our policy is to notify the entrepreneur whether or not we want to invest in the company.

We generally require at least a month to complete the initial review of a business plan. If we choose to invest, the process can take as long as several months to complete.

For further details, please refer to our Operations page.