Small Business Growth Fund

The SMB Growth Fund is our first PE fund. Traditionally a growth engine in a recovering economy, today's small and medium-sized businesses (SMB’s) are faced with unprecedented funding and business development challenges. Our fund will align a select few of these companies to a high value outcome by focusing them on profitable market targets, creating transformative strategies for growth and leveraging our business development services to create what we call ‘tuned in’ breakthroughs.

There are at least three major distinctives involved in PEP’s approach to small business that make this a unique investment opportunity for investors tired of the “hit and miss” nature of traditional VC investment.
 

·         A tuned-in, diversified portfolio with a management strategy to accelerate growth.
·         PEP commitment to the model by bringing two existing businesses to the table.
·         Investor-friendly business model.
 
The first distinctive is in our approach. PEP does not just acquire an interest in selected businesses and wait for those business to – hopefully – generate a return. PEP consults with businesses within three distinct growth areas – green technology, physical security and information technology - that have unique business offerings but that are challenged from a management and growth perspective. Only after PEP has identified a relevant business development strategy for increasing a company’s value is it acquired, and always with PEP taking a controlling management role in the company. In that way, PEP can assure a much higher probability of success within the businesses it acquires, based on the extensive experience and capabilities of the PEP leadership team.
 
The second distinctive is that PEP is contributing two businesses with over $7 million in 2009 revenue to the fund, valued conservatively at 10% of the fund value. Further, it is bringing five potential acquisitions that PEP principals have developed a relevant business development strategy that is ready to be applied. By contributing these two existing, growing businesses, PEP is showing our full commitment to the success of the fund by bringing already performing assets to the table. By bringing with us five already-developed deals, PEP is showing the ability to “jump start” the performance of the fund and thus bring quicker returns to the investors.
 
The third distinctive is the investor-friendly PPM that separates this fund from any other that we are aware of. Unlike other funds, in this fund the investor comes first. PEP will only take a 2% annual management fee, and there will be no transaction fees except to replenish reserves at cost for services. Beginning at year 3, 25% of available profits will be distributed. Further, PEP will not participate in the returns from these investments until 100% of investor dollars are returned, and will receive a sliding scale of investment thereafter.
 
For more information: Download fact sheet here.
For more information: Download PPM here.