Equity Investment Criteria
We are a private equity investment business. That means we contribute our capital into a business for a portion of ownership. We are often referred to as an Angel investor because we hope to help grow very small businesses into much larger enterprises so they can be sold, merged with another business, or even become a publicly traded company. Also, if the business is growing rapidly and the market can sustain a long-term runway, we are comfortable staying invested for a very long time. Our typical investment is under $75,000 and we usually receive a 5% to 40% equity stake, but we can be creative in offering other paths to funding. We have gravitated to the use of stock warrants as our preferred method of being compensated for the risk of backing the business. By being more imaginative in our approach than our competitors, we have been able to make deals where others won't.
For example, we realize most early stage businesses often have a continuous requirement for working capital. We are comfortable offering a line of credit in those instances. We have occasionally offered a product royalty deal, if the business can support it. Also, we are comfortable with venture debt with associated stock warrants in those occasions where it is appropriate. No matter what funding mechanism is used, we will always require equity in the business. |
Our Core Equity Portfolio
Automate the entire W-9 / 1099 process.
The simple way to compare mortgage rates.
Hire trustworthy off-duty firefighters for work around the house!
Position Exited
|
Our Foundational Pillars
- The most important pillar of our investment approach is that the “market” must speak about your product or service. That means you will need customers. It is very rare that we would entertain an investment where you don't have any existing clients. It doesn't have to be profitable, but there should be a clear path to profitability.
- While we invest in a variety of businesses, we will always require equity, usually through stock warrants.
Basic Criteria
If your idea meets these basic concepts, please send a pitch document or executive summary of your idea, and any supporting materials such as financials, to info@tidewaterservices.net - with a subject line of "Tidewater Inquiry". If your business appeals to us, we will quickly schedule a call to learn more. Don't forget to include phone and email contact information.
- The businesses we are interested in are usually early stage, have high growth, and can be in almost any category, outside of the exceptions listed below.
- The business must have clients, some revenue, and a product or service that is understandable and in demand.
- The business should be at, or have a clear path, to being profitable.
- The market size should have a large potential and there should be a business model that is able to scale with it.
- We look for an experienced, resilient, trustworthy team, with a full-time founder.
- We will consider only U.S. and Canadian based businesses.
- Our investment horizon has no fixed time frame, but typically an exit between 2 and 6 years is expected. However, if the business is growing rapidly and the market can sustain a long-term runway, we are comfortable staying invested for a very long time.
If your idea meets these basic concepts, please send a pitch document or executive summary of your idea, and any supporting materials such as financials, to info@tidewaterservices.net - with a subject line of "Tidewater Inquiry". If your business appeals to us, we will quickly schedule a call to learn more. Don't forget to include phone and email contact information.
Advanced Criteria
The Capitalization table (or “CAP table”) is the document that companies use to illustrate to investors the prior capital raise, the allocation for employee stock plans and any commitments for shares in exchange for services. We have created a white paper for the more advanced entrepreneur that describes this extremely important concept. If not documented correctly prior to an investment, it can lead to costly legal fees and lawsuits that can completely derail otherwise promising companies. We encourage every entrepreneur to download and study this document.
Stock Warrants are an additional method for an investor to receive a reward for their taking the risk of helping entrepreneur. To help visitors understand this important concept, we have created a second white page covering this topic. It explains what warrants are, why they are our preferred method of investing, and especially why they are good for the business looking for growth capital. It is available here for download.
The Capitalization table (or “CAP table”) is the document that companies use to illustrate to investors the prior capital raise, the allocation for employee stock plans and any commitments for shares in exchange for services. We have created a white paper for the more advanced entrepreneur that describes this extremely important concept. If not documented correctly prior to an investment, it can lead to costly legal fees and lawsuits that can completely derail otherwise promising companies. We encourage every entrepreneur to download and study this document.
Stock Warrants are an additional method for an investor to receive a reward for their taking the risk of helping entrepreneur. To help visitors understand this important concept, we have created a second white page covering this topic. It explains what warrants are, why they are our preferred method of investing, and especially why they are good for the business looking for growth capital. It is available here for download.
Exceptions
While almost any industry will appeal to us, there are exceptions. We very rarely invest in the following concepts. It does happen, just not very often. The main problem with these commodity-type businesses is that the lowest cost provider wins. To say it another way, we are not interested in trying to out Walmart, Walmart. However, if you have some product or service that is truly unique or even revolutionary, protectable by patents or trademarks where applicable, and a dynamic business plan demonstrating a clear path to franchising, licensing, or another high return path, that will have our interest. You must be able to demonstrate a high-growth future for the business. In that case, please send a pitch document or executive summary of your idea, and any supporting materials such as financials, to info@tidewaterservices.net - with a subject line of "Tidewater Inquiry". As you can see, the following are all either slow growth or commodity-type businesses and are generally not investible unless it has one of the above requirements. Again, you must be able to demonstrate a high-growth future for us to invest.
- Alcoholic and non-alcoholic beverage or food products, or related businesses, such as breweries, distilleries, wineries, farms or farm stands, bars, restaurants, grocery stores, convenience stores, food trucks, etc.
- Clothing, shoes, handbags, personal care products (i.e., hair care, makeup, etc), or related businesses, such as pop-up shops, apparel stores, mall stores, etc.
- Fixed asset businesses such as airports, marinas, flea markets, drive-ins, museums, theaters, forest and lumber businesses, etc.
We have no interest in any of the following types of businesses as they are not investible to us.
- Entertainment type businesses, such as plays, musicals, songwriting or acting services, movies, etc.
- Radio stations, television stations, or their support services.
- CBD, Cannabis, hemp, or tobacco themed products or services, such as smoke shops, pipes, CBD oils, and so forth.
- Sexual themed products or services.
- Gambling related products or services, including fantasy sports products or services.
- Cryptocurrency products or services, such as server processors, or products such as Bitcoin, Ethereum, etc.