Investment process
Sakal Ventures was established to provide an avenue to invest in late-stage private companies. Our focus revolves around identifying companies with: wide economic moats, immense competitive advantages, highly disruptive technologies, proven revenue generation, and valuations above ($ 500mm – 5 bill) Sakal Ventures focus on mature companies offers out performance of other investment classes, but they frequently have a shorter time to liquidity with less risk. Typically, we make investments in companies that will have a liquidity event in 1 – 3 years.
A series of proprietary screens are run on a weekly basis to scout for interesting opportunities based on valuations, industry trends, and shifts in the macro environment.
Screens are employed to find companies that are capturing exponential growth, employing revolutionary technology or processes, and redefining their respective businesses.
In-depth financial modeling across various projections.
Distinct Strategies.
Ideas from industry experts in conjunction with investment team’s thesis.
Sakal employs a diverse team that consists of : former hedge fund managers, financial analysts, equity traders, technology advisors, wealth managers, and entrepreneurs.
With relationships from Wall St. to Silicon Valley, Sakal employs it’s network on a daily basis.
This allows Sakal to view the world of investing through a lens privileged to very few.
Consistent observation of the market regarding industry and company insights. Consultations with close relationships and industry experts to vet internally generated ideas and new opportunities. Extensive monitoring of companies and industries to potentially initiate investments
- Quantitative Screens.
- Qualitative Assessments.
- Constant Analysis.
Assessment of key business drivers and industry specifics. Evaluation of recent price performance. Analysis of company annual/quarterly reports, earnings transcripts, company presentations and broker publications. In-depth research of past 5 years of industry data in order to accurately forecast the next 10 years.
Detailed financial modelling with I/S, B/S, and CF/S projections (three-statement models). Comparison to broker models to question assumptions and error check. Discounted cash flow model. Residual income model. Historical, trading & transaction multiples. Base Case, Bull Case and Bear Case target prices.
Decision and position sizing is made by the Investment Committee. Additions made opportunistically if price further decreases/increases.
Daily monitoring of portfolio companies. Position exited if price target nears or underlying assumptions change. Continuous monitoring post exit as a stock at the right price level could become reintroduced into the portfolio. Liquidity event: i.e company going public or a merger or acquisition.
Per the chart, after 20 positions no further significant risk reduction is achieved; most of the benefit happens up until 8 positions.
Typically 8–12 companies are selected.
Diversification is achieved not only by arithmetic, but also by understanding business models and cash flows. Sakal strongly believes it is favorable to fully understand fewer companies than randomly investing in 100+ companies.
“Diversification is to protection against ignorance. It makes little sense if you know what you are doing”, Warren Buffett.” Sakal shares this opinion and is convinced that extensive research allows a concentrated portfolio approach.
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+1.786.828.5976
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partners@sakalventures.com
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3323 NE 163rd Street, Suite 604
North Miami Beach, FL 33160
Sakal Ventures Series Fund LLC
