Investment Criteria

Superior Management
The common denominator among Northwood’s successful investments over the years has been the excellence of company management. As a result, we partner exclusively with management teams that have proven track records of success. Northwood provides meaningful equity incentives to the management teams of its portfolio companies.

Industry Focus
Northwood invests across a wide range of industries with an historic concentration in the telecommunications, manufacturing, retailing/consumer, financial services, and service-oriented business sectors. We prefer to back experienced management teams in businesses that we can readily understand. Northwood tends not to participate in the real estate, energy, software, or hardware sectors. While we acknowledge the importance technology plays in any company, we typically do not invest in companies for which the development of technology is a critical success factor.

Investment Size
Northwood’s typical venture capital investments are in the $2 million to $5 million range, depending on the company’s stage of development, funding needs, and risk profile. We often participate in “follow-on” private equity financings, and may target a total investment of $5 million or more over the life of any portfolio company.

Our typical management buyout investments are in the $2 million to $10 million range. Northwood both sponsors transactions and participates in buyouts structured by others. Our targeted enterprise value for buyouts is in the $15 million to $100 million range.

Company Location
Northwood invests primarily in companies located within the United States, and to a limited extent, internationally.

Investment Horizon
Northwood’s typical investment horizon ranges from four to seven years. However the extended term (i.e., lengthy maturity) of our investment funds encourages a longer-term investment perspective than that of our peers. For example, we have held a number of investments for more than ten years.  Our unusual flexibility in holding periods is highly valued by our management partners.

Investment Process
Our preference is to first receive an executive summary of a business opportunity, and if interested, to request a complete business plan. Assuming a favorable review of the business plan, Northwood would meet with the management team to further understand the opportunity. We then conduct due diligence, meet the remaining members of the management team, negotiate the terms of our investment, and complete the legal documentation. In the appropriate circumstances, we are able to consummate transactions with industry-leading timeliness.