Arena’s investment criteria include:
Strong management. A strong management team has deep domain expertise, an experienced track record within the targeted industry, fiscal prudence, entrepreneurial drive, and a history of success.
Sustainable competitive advantage. Company is developing innovative products and services with demonstrable competitive advantages that are not easily duplicated by competitors and that provide an immediate tangible value to customers.
Favorable market. The prospective portfolio company’s products or services should address a market of sufficient size and growth potential as well as one with a rational competitor structure. We prefer to see markets greater than $500 million but will consider smaller sizes for market share leading companies.
Visibility of Exit. An initial public offering within a 36 to 48 month timeframe is feasible, and an exit through a strategic sale is a viable alternative.
Capital-efficiency. Business models that have significant opportunity for operating leverage (e.g., scaling without substantial increases in fixed costs or capital expenditures) and have recurring revenue.
