Renovus typically commits $5 million to $15 million per investment and focuses on cash flow positive businesses with less than $10 million EBITDA. Additionally, Renovus evaluates potential investments across the following criteria:
Compelling Customer Value Proposition — Delivering a unique and valuable product or service is the key to a sustainable, long-term business. An education program whose graduates see a significant increase in their salary relative to the cost of the program (i.e., an attractive return on their investment) is a good example of a compelling customer value proposition.
Mature & Defensible Business Model — Renovus seeks to invest in companies that have a proven and stable business model. It avoids companies that compete primarily on price or are in sectors where business models are subject to rapid change.
Positive, Stable Cash-flow — Renovus prefers companies with positive earnings and limited exposure to the economic cycle.
Meaningful Growth Opportunities — Renovus focuses on investing in companies that can put the invested capital to good use for growth. The fund is most interested in businesses with revenue growth potential of 10%+ per annum.
Low-risk Investments — Renovus avoids companies where there is a potential to lose all of its invested capital. These include companies with unproven business models or limited track record of profitability as well as profitable companies that operate in markets that have a history of dramatic change, which can lead to the collapse of market participants.
Ability to Add Value — Given the team’s experience in education investing, Renovus is well-positioned to add value to its Portfolio Companies. Renovus will focus on businesses where the involvement of its team can create meaningful value through strategic initiatives like acquisitions and development of new business lines as well as operational improvements around better management incentives and use of metrics.