Our Investment Criteria

Generation Growth Capital, Inc. invests in established manufacturing, service, and distribution businesses. We consider other industries on a case-by-case basis. These companies generally have enterprise values of less than $30 million and sales ranging from $5 million to $50 million.

GGC’s investment targets are typically well-established, profitable businesses with sustainable niches. We consider select turnaround situations where the fundamental business remains viable but other factors (such as capital structure or parent/sister company problems) have created cash needs.

We usually do not fund business startups or real estate-related opportunities. GGC investments are primarily structured as equity. Subordinated debt and warrant structures also are considered. We invest $1 million to $10 million in each portfolio company. Larger transactions will be considered with select investment partners.

Operating Model: Step One

Strategy & Deal Sourcing

Focus on inefficient lower-middle market dynamic

GGC understands the nuances of the small-business investment process and has experience working with a broad range of advisors to get deals done with relatively little institutional PE.

Utilize all aspects of GGC network

Partner relationships
Operating partner experience
Business advisor relationships

Position as a preferred buyer

With a focus on growth and low-leverage capital structures, GGC is an attractive solution for sellers who are looking for good stewards for their businesses going forward.

Operating Model: Step Two

Research & Review

We're experts in the lower-market small business sector, so we know a company with earning potential when we see it. To better determine if a business has this potential and is worth investing in, we conduct:

Extensive evaluations of management capabilities and “partnership” fit with GGC model
Detailed quantitative analyses
Thorough vettings of market opportunities and perceived risks
Expert assessments of existing and potential operating issues and opportunities
Third-party consultations as necessary

Operating Model: Step Three

Capital Investment

During the investment step, GGC does the following to ensure all parties' success and satisfaction:

Creative structuring of buyout investments, including an attractive price and alignment with the seller
Implementing an appropriate capital structure, depending on the type and amount of third-party financing
- Structure is typically conservative, so as to flatten J-Curve and provide downside protection
Aligning interests with management team through structured compensation and incentive equity
Performing comprehensive legal documentation
Addressing tax implications and other issues

Operating Model: Step Four

Optimize & Add Value

We maintain dual emphases on increasing current cash flows and margins while driving the ultimate exit valuation. Our differentiated capabilities in the finance, business administration, and corporate management disciplines allow us to offer a wide array of services in addition to capital investments, including:

Augmenting existing management teams
Enhancing infrastructure (accounting systems, IT systems, HR policies, etc.)
Providing strategic direction
Focusing on key operating efficiencies
Managing add-on acquisition process
Optimizing capital structure and leading re-financings

Operating Model: Step Five

Drive Exit

Once we're certain we've maximized a company's value as much as possible, we work with management to ensure the continued success of the team and business.

Monthly & quarterly operational reviews
Extensive budgeting

Finally, we explore a variety of exit options.

Strategic investors
Mid-market private equity firms
Rarely through public equity markets

Double Bottom Line Returns

Generation Growth Capital is committed to providing “double bottom line” returns. In addition to generating a market rate of return on invested capital, the second bottom line is the positive impacts we have on the low-to-moderate income (LMI) communities in which our portfolio companies are located. Our companies serve as an example to other entrepreneurs and community residents that attractive investments and opportunities exist in LMI communities. GGC's double bottom line returns include:

Economic Development

Being a catalyst for additional economic activity in LMI communities

Community Benefits

Creating jobs, increasing the tax base of LMI communities, and supporting joint ventures between majority and minority entrepreneurs that may lead to additional economic development and wealth creation

Wealth Creation

Creating wealth for minority entrepreneurs or employees who are climbing the economic ladder (focused especially on employee benefits programs such as 401k(s), savings programs, homeownership/walk to work, etc.)