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In general, when approaching an investment opportunity, we have a two-stage review process before entering an investment. The first process is high-level. If a company does not meet most of the following basic metrics, we generally do not look any further unless there is a compelling reason to suggest that we keep digging.


Stage 1 – “The Gate”

  • Minimum of $10 million revenue and a likely revenue CAGR of 15% over a 2-3-year view. 

  • Revenues that are recurring in nature.

  • Low revenue concentration of customer base for stress resilience.

  • Have a successful track record in deployment of capital.

  • Founder-led and/or economically aligned with management.

  • Demonstrative of our return hurdles on a preliminary “back of the envelope” financial analysis.

  • Although not necessarily a metric, we take a view of the liquidity, the profile of the substantial holdings and any notable historical changes in this regard.

If a company’s characteristics generally meet our Stage 1 due diligence requirements, we move onto our Stage 2 assessment, which is as qualitative as it is quantitative.


Stage 2 – “Detailed Assessment”

  1. Review of financials and annual reports.

  2. Management meeting (This is one of the hardest, but one of the most important parts of the process).

  3. Thesis building:

    • Small revenue share of a large and/or growing market.

    • Management teams with integrity, alignment, capability, and an innovative mindset.

    • Revenue streams that are recurring in nature either through contracts or customer behaviour.

    • A high likelihood of generating a strong and growing stream of free cash flow in the future.

    • Valuation, we get particularly excited when the market does not recognise the room for multiple and/or margin expansion in light of the “structural shifts” we pursue.

    • Risks of the investment.

    • Customer love – the companies in our portfolio tend to have happy customers, are responsive to the technological environment and the social sentiments that consumers seek.

    • Self-propulsion characteristics.

  4. Financial modelling.

  5. Position sizing.

  6. Purchasing of stock.

Stage 3 – Monitoring Whilst in Portfolio


While not exhaustive, some key things we do to monitor existing positions include:


  • Company updates – we review and update the financial models as companies release financial or operational updates.

  • We subscribe to and read industry newsletters and subscriptions for the industries that our portfolio companies operate in. This gives us an insight on “the heat in the kitchen” in the industries. This provides us with a view of the competitive landscape in near real-time and can flag if any of our assumptions are at risk.

  • Communication with management – we have direct communication with a board member or a C-suite executive in 6 of the 9 stocks that we currently hold.

  • We follow the companies and their key personnel on social media.

  • We read Australian news and financial news daily.

  • Via Google Alerts, we use keywords to keep up to date on a broad range of relevant industry news and movements irrespective of geography.

  • We watch overseas markets and major news flow.

  • Listen to what customers are saying – app reviews, Google reviews, Google Trends, web traffic, social media posts, Canstar ratings etc.

  • We review relevant sector data, both domestically and internationally.

  • Are increasingly growing our network of industry experts, particularly, operational experts who inform us of relevant news, innovations and most importantly provide valuable insights into our assumptions. 


Most of the indicators of fundamentals-based success (Or the levers that drive that success) is gauged before and in-between updates. These indicators are found in alternate data. This can give us an edge, particularly for smaller companies, in anticipating company performance and strengthen or exit positions before the market in general.

Stage 4 – Exit Strategy

We generally will exit a position if or when:

  • We have made a mistake.

  • A stock hits its valuation target and we can no longer justify the price.

  • A better opportunity has presented itself.

  • Position sizing - wipe-out threshold

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