Frequently Asked Questions
Technology Partners
I have tried, or am in the process of trying, to raise early-stage/venture capital. Why are you asking me “what do we buy with your technology?” No one has ever asked me that question before.
Because if your technology fits our profile (see homepage for screening criteria) yet is struggling to reach its commercial potential, we set out to acquire the infrastructure through which to commercialize your technology rather than attempt to convince someone else to do it (via a license) or build a company around it from scratch (via early-stage investment).
How does TCP’s Technology-Driven Growth Acquisition strategy relate to me as a technologist/technology entrepreneur?
You’ve created disruptive technology and tried to do what everyone advised (license, sell it, strategic corporate partnerships, joint ventures, raise early-stage capital to build a company) and yet you are still struggling to commercialize it…or maybe you’ve shelved it. In TCP’S strategy, rather than trying to push technology into the market utilizing any of those techniques, we seek to acquire operating companies whose product or service can be immediately unfairly advantaged by virtue of your technological innovation. We turn the model around; rather than being a seller/licensor of technology, we are acquirers of infrastructure.
I have struggled to raise early-stage/venture capital, how do you expect to raise enough money to acquire a lower-middle-market operating business?
As investment funds become increasingly larger, so do investors’ obligations to their Limited Partners to deploy capital in larger sums. Therefore, we are seeing an unusual financing market where “it’s easier to raise $50 million than $5 million.
How does TCP's strategy advance my interests?
TCP accelerates, and de-risks, the commercialization of technology by acquiring infrastructure rather than attempting to raise venture capital to then, attempt, to build a company from scratch through which to capitalize on the potential of your technological innovation. In other words, why build it (which can take years) if we can buy it (which will take months)?
Do you invest in or acquire my technology? What does a Technology-Driven Growth Acquisition look like for me?
No, we neither invest in nor acquire technology. We are investors OF technology, not investors IN technology.
There are many ways we can structure a deal depending on the interests and motivations of the parties. Our priority objective is the alignment of everyone’s interests. A typical Technology-Driven Growth Acquisition entails the investment of your technology (in the form of a license or a stock participation) into a TCP acquisition whose product or service can be immediately differentiated by virtue of the unfair advantage the technology provides.
Having invested your technology into the “launch pad” acquisition, the technologist will realize new advantages. For instance, you will be a significant minority shareholder in (or licensor to) the acquired operating company, you may find yourself with a title, salary, and working capital (R&D budget) to continue to advance future generations of the technology.
Instead of spending years trying to build a company, you WILL instead find yourself directly participating in explosively growing a company, ultimately realizing value from your technology and equity stake on a much accelerated timeline.
The incentive for the technologist is an accelerated realization of value from the technology by virtue of acquiring infrastructure rather than spending money (if you can raise it) and time (if you have that luxury) attempting to build it from scratch.
What sort of technology do you want me to be on the lookout for?
TCP seeks immediately-deployable technology (i.e., technology that does not require any additional time, money, regulatory/agency approval(s), or market validation in order to be immediately commercially deployed and accepted) that is disruptive but struggling to achieve commercial success.
Do you only want to see technology in a certain space or of a certain type?
No. We are technology and industry agnostic. What matters to us is that it is immediately deployable, in other words, the technology development risk has been eliminated; it is disruptive in one or more applications but is struggling to achieve commercial success.
How do I get compensated for referring TCP a technology?
When you refer a technology to us that leads directly to the acquisition of an operating company, we pay a ($20,000) referral fee at closing.
Can I participate in one of your deals instead of taking my referral fee in cash?
Yes, if you choose to instead participate in the deal, we pay a modest premium in private stock in the deal. So, for example, if you were to be due a $20,000 referral fee at deal closing, we may instead offer you $25,000 in stock participation.
Referral Partners
Why should we consider funding TCP deals?
TCP sources and structures legitimately proprietary deals that make sense and for which you will not overpay. We do not participate in competitive auctions and thus achieve outsized risk-adjusted returns for our funders.
How does the TCP strategy result in faster technology commercialization and value creation with lower risk?
Rather than embarking on a multi-year process of raising multiple tranches of early-stage capital to build a company from scratch, we seek to acquire existing lower-middle-market (<$150 million revenue) operating companies that already possess all the attributes one would otherwise attempt to assemble (management, customers, contracts, earnings, cash flow, etc.) that enables us to evaluate the strategic potential of an existing product or service to be disrupted to the benefit of our acquisitions. The objective is to create a match that enables our acquisitions to capture market share WHILE increasing margins.
How does TCP define proprietary deal flow and why does TCP believe their deals are proprietary?
We are not interested in, and do not participate in, competitive situations that are being auctioned to the highest bidder. We believe that by first identifying the unfair technological advantage (i.e., “Silver Bullet") BEFORE we set out to identify the best company as a match, we are then partnering with underutilized technology to acquire otherwise undifferentiated operating companies in fragmented markets to everyone’s (technology’s, acquisition’s, funder's) advantage.
Does Technology Capital Partners engage in growth equity or leveraged buyouts?
We are a leveraged buyout firm. We pursue acquisitions of lower-middle-market businesses after first identifying disruptive technological innovation capable of infusing an unfair advantage into our acquired company(ies). Unlike early-stage investors, our acquisition targets’ existing cash flow and assets enable the financial flexibility to structure our acquisitions utilizing modest levels of leverage.
Capital Partners
How does the TCP approach benefit the acquired company?
TCP’s Technology-Driven Growth Acquisition strategy benefits existing operating companies in highly competitive markets populated by numerous undifferentiated competitors…essentially doing the same thing the same way as everyone else. In other words, industries populated by companies who, lacking a strategic competitive advantage, often compete based on geographic presence, superior customer service, or lower prices.
TCP’s objective, which we maintain accrues to everyone's benefit, is to locate the immediately deployable, disruptive and unfair advantage that will enable our acquired company(s) to grow very rapidly and very profitably, create jobs, retain and attract top-notch management talent while taking market share from peers AND charging a premium price for their product or service.