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Our diligence process is rigorous, reviewing the technology, the market, the competitive landscape, intellectual property and regulatory and reimbursement issues. In parallel, SCP Vitalife prepares an assessment as to potential exit paths. We follow up our initial assessment with discussions with potential customers, doctors and strategic partners in order to evaluate the true commercial potential of the technology. Once the potential portfolio company clears these hurdles and financial terms are agreed upon, the final step in the process is the approval of our investment committee. Investment criteria The Fund will typically invest in companies in the early stages of development. These companies will have demonstrated a well-defined and thought-out business strategy and hired a strong core management team and professional leadership. The most important criteria for investment consideration include: • Breakthrough platform technologies • We must feel very confident that the technology/product has potential to be a large commercial success and will not result in a company that has a great technology that is highly regarded by experts but is a limited commercial success. • Well-crafted business model • We expect a company's management to provide an attractive but realistic financial model that shows how it will make money, how much capital it will need, and how value will be created for investors. We look for businesses that can deliver strong margins, have low to medium capital intensity, and a high degree of financial and operational scalability . • Strong position in markets with large sales and profit potential • We look for companies with a market opportunity that is large enough to provide ample room for growth over several years. In addition, we are particularly attracted to companies that have positioned their products or services to capitalize on major structural changes within their target markets . • Solid intellectual property • We want to be invested in companies whose intellectual property gives them the freedom to operate while providing strong barriers to entry . • Capable management team • We believe strongly that even a great idea has little value unless there is a great management team to turn it into reality. We look for experienced management that has domain expertise in the company's business area, a track record of prior success, and the drive and passion needed to overcome the many inevitable obstacles on the road to success. • High exit potential • In evaluating any investment, we carefully consider the available avenues for the company to achieve a successful exit. We are attracted to investment areas where strong valuations exist for comparable public and private companies. We also look at the history of M&A activity in the specific investment area and the number and quality of potential acquirers. Finally, we also prefer to see that a company is addressing a large enough market opportunity to make a future IPO a meaningful possibility
SCP Vitalife Advantage for Entrepreneurs In addition to a thorough market analysis we take pride in our history of providing hands-on assistance to our portfolio companies with strategy, regulatory issues and business development. A unique feature of SCP Vitalife is having investment professionals in both the U.S. and Israel . Given our managers' depth of experience, we have access to a large network of health care-focused professionals as well as strategic partners and investment banks. SCP Vitalife is a partner in Technion Seed (www.technionseed.co.il), the new incubator from the Technion Institute (Haifa). It is an alliance of Technion Israel Institute of Technology and four venture capital companies that will invest in and support seed stage start-up companies located in Israel.
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