What HLVP Is Looking For In Potential Portfolio Companies
(What HLVP Is Not Looking For)

Strong management teams with relevant experience: We invest first in the team and secondly in the products and markets. We understand that small companies don't have the luxury of having a robust management team in every aspect of your business. We do expect you to explain the relevant experiences and positions of your team and why this is an advantage in your markets. We also expect you to define the positions that you will need to fill as you grow and what schedule you expect to complete your team--and if HLVP could be of help. When your team is incomplete, we expect you to recognize and explain what is needed to complete the team.

Companies with exit plans: The only way HLVP can meet its obligations to our Limited Partners (investors) is to provide a liquid return on their investment. This means that we must invest in companies that have exit strategies within the 10-year window of our partnership. Exits can take place via merger and acquisition by a public company, via IPO (for a very limited number of companies that meet the ever-changing requirements of the public market and investment bankers), or by spinning out some of your technology into a subsidiary that could be merged. Where you wish to retain the long-term control of your primary company, we can be of help in setting up subsidiaries for spin-out, and/or licensing your technology to other companies. This is a way to provide you with the financial return of some of your technology along with the opportunity to retain control of your company with additional income.

Products meeting demonstrated and pressing needs: There must be a demonstrated market for your products/ services/technologies. The users in the defense and/or security markets must have strong requirements for your products and they must have demonstrated this with written requirements and funding. Homeland Venture Partners is not interested in a technology in search of a market.

Dominance in your market/technology niche: You must plan to have or already have a 25% market share in a well-defined niche (i.e., you can show how to sell cost-effectively into that niche). The niche can be within an existing market or a new market that can be separately identified with its own funding stream. HLVP is particularly interested in products that have an order of magnitude advantage over competing products and/or technologies, and/or those that bring together combinations of existing products and/or services to provide entirely new and valuable defense/intelligence/homeland protection products.

High growth potential: HLVP is looking for companies with products that can grow into annual revenues in the range of $100 million to $500 million. This will provide the exit multiple adequate to be attractive to your founding team as well as HLVP and subsequent venture capital investors. It is acceptable if the full potential is realized after the portfolio company is acquired by a large established company.

Sustainable competitive advantages: HLVP is only interested in companies that have high barriers to entry for your competition. This can be in the form of solid patent protection for your technologies and products; in trade secrets; highly classified program access; and other forms that fit your company. In general, we are not interested in those companies that are merely first in a technology that can easily be copied by your competitors, particularly your large competitors.

Companies looking for mentoring and support: HLVP is not a "hands-off" investor. Our team of Managing Directors, Technology Advisory Board, consultants and support team have considerable experience in the markets of interest to the Fund and we are looking to provide active guidance to our portfolio companies. Our team has successfully grown high-tech companies with high-multiple exits to provide good value to our investors. We expect to provide you with mentoring where you need it. We expect you to manage your business, but we expect to provide strategic guidance where it will benefit your company.