Most of the investment opportunities we receive come to us through relationships with business leaders and qualified intermediaries. Radiant Capital follows a structured and standardised process of screening investment proposals. Normally, the process takes approximately 3-6 months from introduction to investment and depends mainly on the level of preparedness of the company. Well-organised companies with good quality internal processes are able to satisfy information requirements promptly and fall at the shorter end of this estimate. We aim to close deals in the shortest possible time, but the extent and thoroughness of our due diligence is dictated by the level of risk an investment presents, and not by the amount of time available.
- Initial screening: In order for a deal to be considered for screening we must receive a complete business plan including a summary of assumptions, financial projections for the next three years and summary financials for previous years.We screen all business plans received to evaluate their suitability to our style of investment and our return expectations. During this process we evaluate certain aspects such as profitability of operations, viability of expansion and suitability of management team. If our internal investment criteria are satisfied we deploy additional resources to study the business in greater detail.
- Preliminary Due Diligence: At this stage a senior member of the investment team gets involved in deeper discussions with key members of the management team. Meanwhile, more detailed financial and market information is collected from the company and external resources.
- Term Sheet Discussion: If our initial assumptions about the prospect bear out, we will discuss terms including valuation; if a general agreement is reached a term sheet is issued at this stage. If executed we retain exclusive access to the deal for a limited period of time.
- Due Diligence: We engage leading professional firms to carry out detailed financial, legal and technical due diligence. Simultaneously we instruct our selected law firm to prepare legal documentation.
- Closing: Once the company has completed conditions precedent the process moves to a close and we fulfill our commitment to finance the company.
Most companies find this process intense as well as rewarding because this is often the first time the promoters get a detailed third party evaluation of the strengths and weaknesses of their business in an environment where all parties are determined to find solutions to any challenges which emerge As an investor, this process helps us build a foundation of trust and confidence with our potential business partner. It also allows the promoter to understand what drives the investor, helping to develop a positive working relationship in the future.