The CapSource Funds, L.P. are captive funds owned and managed by Amerimark Principals and their partners. Approximately $50 million is available for investment. The fund is licensed as a Small Business Investment Company (SBIC) by an agency of the U.S. Government.
The CapSource Funds, L.P. provide capital in the form of subordinate debt with attached warrants to growth stage companies. The Funds identify and invest in established companies with a definable growth and profit potential that require additional capital.
Eligibility Guidelines
Eligible prospective companies should meet the following criteria.
Demonstrate a substantial annual growth rate of 20% or more
Have knowledgeable equity shareholders/ownership
Possess experienced management teams with significant ownership
Demonstrate a viable exit strategy
Investment
Philosophy
The CapSource Funds focus on established, well-managed companies that are under-capitalized. Target companies occupy an established market niche and have proven opportunities for profitable growth. The success of these target companies often creates a capital crisis. They have reached or exceeded traditional bank lending limits and must look for venture capital or subordinate debt to finance expansion. The CapSource Funds seeks to avoid under performing companies with limited success potential. The CapSource Funds also seek to avoid poorly managed companies and volatile industries with short product life cycles.
Investment Structure
The Funds make 5-year, interest-only loans ranging in size from $250,000 to $2,000,000 with attached warrants, typically representing 5% to 20% of the company's total equity. Most transactions contain a "put" provision setting forth a buy-back provision, after a specified period of time, for the company to redeem warrants at a predetermined price based upon a predetermined pricing formula. Other viable exit strategies include debt restructure, sale of the company, or an initial public offering (IPO).
SBIC Overview
As an SBIC, the Funds are subject to SBIC rules and regulations. SBICs can invest in companies that have a net worth no greater than $18 million or an average net income that does note exceed $6 million in a 3-year period. The minimum loan term can be no less than 5 years. Investments and/or loans cannot be made to the following business types:
Real Estate Development Firms
Re-lending or reinvestment firms
Newspapers, radio/tv stations, magazine publishers
Charitable, religious and other non-profit organizations
Loan packagers
Multilevel sales distribution plans
Oil & gas exploration companies
Any business who's purpose is contrary to public interest
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