Penn Ventures targets investments in rapidly growing manufacturing, technology, and service companies with revenue typically in excess of $1.0 million and equity valuations typically less than $25 million. Each investment is selected after a critical review of a number of factors, including the strength and execution skills of management, the size and relative dominance of the company within its industry and the markets it serves, distinct competitive advantages and opportunities for accelerated growth, and strength of management information systems and financial controls. Penn Ventures aggressively pursues those best-of-breed companies that are executing on their business plan and possess a carefully considered path to profitability. The overall portfolio objective is a diversified portfolio of companies whose industries may broadly include:

Agribusiness Energy and Environmental Technology
Basic Manufacturing Marketing and Distribution
Biotechnology and the Life Sciences Materials Technology
Computer Hardware and Software Networking Systems
e-Business Infrastructure and Interactive Media Powdered Metals
Education Products and Services Telecommunication Technology
Business Services Publishing

– where compelling market opportunities exist companies in other industry niches will be considered.

This investment focus reflects the backgrounds of the principals and the economy of Penn Ventures’ target geography. The Fund may occasionally invest in other types of innovative product or service companies with high growth potential. Under SBA regulations, Penn Ventures is restricted from investing in companies whose principal business is re-lending or re-investing (e.g., investment firms, leasing companies, banks); many kinds of real estate projects; single purpose projects; offshore businesses; passive businesses; and businesses using 50% or more of the funds to buy goods or services from an associated supplier.

In addition, regardless of the industries in which they operate, Penn Ventures expects that portfolio companies will share one or more of the following characteristics:

  • Management teams with skill, experience, and depth either currently in place, or capable of readily achieving these standards with selected additions;
  • Predictable and growing revenue and earnings or excellent revenue and earnings potential;
  • Successful products and/or services, with strong market positions or potential;
  • Proprietary products or services;
  • Proven technologies or market niche(s) that form the basis for market leadership;
  • Solid and growing bases of satisfied customers;
  • Strong or improving performance, in terms of revenues, profits, and cash flow;
  • Unexploited product development, market penetration, and/or profit improvement opportunities tied to defined capital needs currently unmet by other funding sources;
  • A business plan supporting the ability to increase company value through revenue growth and/or operating improvements generating higher gross margins and net profitability;
  • An identifiable two to five year investment exit potential.