Avalon Equity Partners -- Frequently Asked Questions



		Frequently Asked Questions What is Avalon? In what types of companies do you typically invest? What is the investment process? What is involved in the due diligence process? How long does it take to receive funding? What stage of investment do you prefer? What is the average size of each investment? How do you source deals? How do you finance each investment? What information do you need about my business? How is Avalon different from other investment firms? How active a role will Avalon play after investing? Do you have a geographical preference? 1. What is Avalon? Avalon is a New York based investment firm targeting investments in the broadly defined media and communications industries. Avalon invests upwards of $10 million per transaction in stable, growth-oriented media companies with minimum Revenue and EBITDA of $25 million and $5 million, respectively. 2. In what types of companies do you typically invest? Avalon invests in companies with an excellent management team, significant growth potential, and a strategic competitive advantage. Avalon does not invest in early-stage companies without the ability to obtain debt financing. We concentrate our investments in the broadly defined media and communications industries. 3. What is your investment process? Avalon begins the investment process by sourcing deals through its extensive network of industry contacts, including investment bankers, colleagues, portfolio managers, co-investors, etc. The Avalon investment committee then reviews and filters out investment parameters that match our core investment principles. Next, the investment committee coordinates the due diligence process and begins a thirty to sixty day review of the materials. Finally, the principals review the findings of the investment committee and meet with management to work towards closing. The process generally takes five to ten months, however this can be expedited depending on the opportunity. 4. What is involved in the due diligence process? The investment committee has deliberate processes in place to analyze each prospective investment. Our due diligence process typically involves an extensive review of the management team, the industry and market opportunity, the company's products or services, current customers and potential sales leads, vendors, past financial statements, financial projections, and legal documents. Having all corporate documents, financial statements, relevant industry and competitive analysis, and references ready is very helpful and accelerates the funding process. The investment committee will provide a detailed information request list at the onset of the process. Avalon also has several outside firms in place for external due diligence, if necessary. 5. How long does it take to receive funding? The Avalon principals will respond to your financing needs as quickly as possible. You can expect an initial response within a few weeks, but the investment process will take longer as illustrated in #3 above. You should expect the entire process to take anywhere from five to ten months, as we meet with management, conduct extensive due diligence, and fully document the investment. 6. What stage of investment do you prefer? We prefer to invest in existing business concepts that have a proven revenue model and a recurring customer base. We provide the capital necessary to enable our companies to ramp operations, increase marketing and sales efforts, continue product innovations, and finance strategic mergers and acquisitions. 7. What is the average size of each investment? Avalon generally invests $10 to $100 million per transaction for companies with market capitalizations from $25 to $250 million. Avalon has the resources, contacts and creative financing ability to provide the ideal financing structure for each transaction. 8. How do you source deals? The Avalon team maintains an extensive network of contacts within the media and communications industry. With a combined 40 years of industry experience, the principals have a full network of industry experts with whom we share deal flow. In addition, Avalon is frequently contacted by sponsors, investments bankers, and other industry players searching for credible investors with the proven ability to get deals done. Please send an email to dealflow@avalonequity.com to submit a transaction to our investment committee. 9. How do you finance each investment? Avalon is backed by a substantial institutional investor to source deals within our core expertise. The principals have built an excellent relationship with this sponsor which has given us the opportunity to put over $100 million to work each year. 10. What information do you need about my business? In order to consider an opportunity, the Avalon investment committee requires an offering memorandum including, but not limited to, an executive summary, a description of the business, market opportunity and competitive analysis, proposed financing, use of proceeds, management resumes and historical and projected financial information. After reviewing the offering memorandum and pending preliminary approval, the committee will provide a detailed due diligence request list outlining the documentation we require. Each due diligence request list is tailored to the specific opportunity. 11. How is Avalon different from other investment firms? Avalon is unique in its focus on operationally driven value creation. The Avalon team has the ability to aid in strategic direction, staffing, internal reporting, policies and procedures, vendor negotiations, customer relationships and many other day-to-day activities. Avalon's overall philosophy is to centralize processes, and decentralize management with a high level of portfolio oversight and strategic input. 12. How active a role will Avalon play after investing? We require board representation and certain decision-making capability. However, we do not typically get involved in day-to-day operations unless requested by management. 13. Do you have a geographical preference? While we generally explore investments in the continental United States, we will never overlook an opportunity based on geographical location.