Golden Technology looks for the following qualities in new technology ventures:
1. The Market - The market is large, preferably growing and on the verge of (or currently undergoing) paradigm shifts. The shifting market is creating an unmet need or a new opportunity related to the activity of market participants. These participants and their needs are readily identifiable and/or measurable. Adequate numbers of customers/buyers (do currently or will at the right time) possess urgent motives and adequate budgets to purchase the offering. Markets consistent with our focus in energy and the environment receive the most attention.
2. The Offering – The offering is “game changing” and a clear and compelling message about the offering can be readily constructed for the market. The offering is based on deploying proprietary and reliable technology to meet the market need/opportunity. The offering delivers a substantial and readily measurable ROI for the buyer. In the absence of a directly measurable ROI, the offering is “oxygen” for the buyer and due to a fundamental market change the buyer cannot survive without it. There is a compelling top line and earnings impact associated with delivery of the offering.
3. The Business Model – The business is a first mover. It is defendable and/or differentiated from the competition. The production/manufacturing, sales and operations models are scalable and the model produces attractive margins. There is definable, maintainable direct and/or channel access to customers. There is minimal friction in the sales process.
4. The Management Team – The people are capable, highly motivated, passionate and personally and financially committed to the venture. Members of management are clearly and equitably aligned with each other and with other stakeholders on the up and downside.
5. The Transaction – The transaction is straightforward, without any financial or legal frictions and free of unnecessary contractual complications that translate into costs, risks or upside financial limits. The opportunity can be adequately capitalized to flow cash and readily prepared for subsequent venture financing or a liquidity event. The
valuation is attractive.
6. Stakeholder Alignment – Stakeholders share agreement/interest in the same tangible and intangible aspects of the opportunity. Examples of such alignment may include sharing of ideals, agreements on business strategy, desired time to exit or financial vs. strategic interests. We believe that strong stakeholder alignment significantly improves the business dynamic.