Investment Criteria

Konza Valley Capital, Inc. (KVCI) primarily invests in lower-middle-market companies based in the Midwest. The majority of our investments are in established businesses in the manufacturing and business services sectors, although we are not restricted by industry.

Role of KVCI

Beyond possessing solid private equity investment experience, KVCI is uniquely focused on long-term strategy and sustainable growth for our portfolio companies. For us, making decisions that support the best interest of the business comes ahead of an immediate investment return.

In our acquisitions, we are open to holding either majority or minority positions. While we don’t seek to play an operational role, we generally hold a seat on the Board of Directors and advise on strategic decisions.

Size

EBITDA: $1MM–$10MM

We invest in lower-middle-market companies generating EBITDA between $1–$10 million, with an optimal range between $2–3 million.

Location

Midwest + Beyond

KVCI primarily invests in Midwest companies, although our partnerships span the United States.

Industry

Manufacturing + Business Services

Our investment activity is not industry-exclusive, although manufacturing and business services are of particular interest.

Stage

Later

Financing is usually provided at later-stage expansion financing, acquisitions, ownership transitions, management buyouts, turnarounds or recapitalization opportunities.

Approach

We believe that people, not capital, are the primary ingredient to any successful private equity investment.

Accordingly, we seek to invest in companies with experienced, committed management teams and an exciting or unique market opportunity that offers excellent growth potential.

The long, demanding process of building value in a business ultimately rests in the hands of the management teams that we back. Their experience, judgment and long hours will be the most critical element in getting the job done. We, however, are often able to provide management assistance to add value to the business building process. Once we have made an investment, we do everything possible to help ensure the success of each portfolio company as we have an “invested” interest to do so.

For this blend of private equity and management talent to be successful, we must find management teams with whom a genuine partnership attitude can be developed.

We welcome being called upon by management to provide ongoing assistance in most any situation. Not every venture will require the same degree of assistance, but we take very seriously our commitment to help KVCI portfolio companies grow and prosper. Building a strong working relationship between management and investors is not only mutually satisfying but is also a key to a company’s success and the ultimate achievement of our mutual objectives.

We value long-term strategy.people.integrity.growth mindsets.strong management teams.resilience.process optimization.

Financing Structure

Flexible Debt and Equity Solutions

We develop flexible, equity-oriented investment structures for growing companies with unique financial requirements and assist in securing additional financing sources to ensure the best possible capitalization to meet a company’s needs. As an SBIC, we have the capability to access additional capital through SBA funding.

Typical investment structures include common or preferred stock, convertible preferred stock or notes, common stock warrants and subordinated debentures. Our investment may consist of any combination of these securities and are generally structured with repayment terms and exit provisions. KVCI is an evergreen fund with longer holding periods (typically 8–12 years), which allows us to weather market fluctuations and maximize company growth potential.

Process

Application + Review

The basic steps below provide a high-level overview of the evaluation and investment process with KVCI and do not necessarily spell out all back-and-forth communication.

Contact us for an initial discussion.

We encourage an initial contact by phone, letter or email inquiry to discuss basic fundamentals of the business.

Share a business plan.

Prior to a meeting with management, we prefer to review a business plan or executive summary of the proposed venture. We can usually provide an indication of interest within two weeks.

Dive deeper into the details.

Assuming response is positive and there is mutual interest in proceeding further, we will arrange a meeting and typically request more business plan details to fully analyze the opportunity. From here, we may move into our due diligence process, expanded upon below.

Deal or no deal.

After a thorough evaluation and analysis, KVCI may submit an investment proposal to company management. If all parties are in agreement, the partnership begins!

Elements of a Business Plan

The business plan must serve to inform us about the specifics of the business opportunity and should include the following:

Company history
Description of products/services
Overview of business strategy
Management profiles and resumes
Profile of the industry and competition
Marketing and distribution strategy
Manufacturing process and production assets
Current and historical financial statements
Projected financial statements and assumptions
Proposed financing structure, if known
References from customers, vendors, service providers and lenders

Due Diligence

During the “due diligence” process, we continue to evaluate the opportunity while further developing our investment proposal. Typically, this includes a visit to the business premises and verification discussions with management’s references, company accountants, attorneys, bankers, vendors, stockholders, industry experts and other resources that may assist us in our evaluation. The entire process may take a few weeks to a few months depending on the complexity of the business, availability of information and the transaction contemplated.

If the resulting analysis is favorable, we structure an investment proposal tailored to fit the company’s specific financing requirements. Upon acceptance by management, we work with the company’s accountants and attorneys on the appropriate legal documentation necessary for consummating the transaction.

We strongly encourage the submission of business plans. All business plans and related information are always treated in the strictest confidence and responded to in a timely manner.

Long-Term Capital. Strategic Investments.

Explore opportunities to grow with KVCI.

Investment Strategy