Committed To Building Great Companies Firm Overview For Companies      www.lookoutcapital.com
About Lookout CapitalLookout Capital provides a combination of capital and financial, strategic andoperational advisory to...
The StrategyWe invest in and work with companies that exist in the following general categories:       Growth Capital: Op...
The PrincipalsMerrette Moore – Managing Partner  • Co-founder and day-to-day operating executive of Lookout Capital  • Ove...
The PrincipalsTim Lavelle – Head of Investment Banking  • Over 26 years of Investment Banking experience  • Former Managin...
Our AdvisorsLookout Capital has assembled an all-star team of advisors and investors, provenentrepreneurs, executives and ...
Investment CriteriaLookout is addressing a niche currently and historically underserved by the capital markets.Our general...
Pre-Funding ProcessWe segment the pre-funding process into 4 general steps:     1) Initial due diligence               Con...
Typical Deal Structure ExampleBelow is a summary of the deal terms we typically seek to obtain in ourtransactions. Of cour...
Post-Funding Investment Management• Immediately upon investment, Lookout personnel will serve in a part-time  management o...
Why Work With Lookout Capital• We look at our relationships with portfolio companies as a collaboration -- We are a  partn...
Additional InformationWe encourage prospective companies and investors to meet with and get to know LookoutCapital’s princ...
Legal DisclaimerThis document contains forward-looking statements. The forward-lookingstatements reflect our current expec...
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Lookout presentation for companies april 2013

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Lookout presentation for companies april 2013

  1. 1. Committed To Building Great Companies Firm Overview For Companies www.lookoutcapital.com
  2. 2. About Lookout CapitalLookout Capital provides a combination of capital and financial, strategic andoperational advisory to up-and-coming entrepreneurs, small but growingcompanies as well as established businesses. The firm addresses a niche historicallyand currently underserved by the capital markets. Our style of investmentmanagement is to cultivate long-term partnerships between our firm, our portfoliocompanies and our investors.We operate by two guiding principles: (1) We want to help entrepreneurs andmanagement grow their businesses and build great companies, and (2) We arepeople-focused, patient investors who seek superior long-term, risk-adjustedinvestment returns.Lookout has a successful record of private company investing, growing businesses,corporate board service, and working closely with management teams. We are afirm of distinguished financial and business professionals who have demonstratedimpeccable integrity and sound business judgment. We invite you to learn moreabout us. 2
  3. 3. The StrategyWe invest in and work with companies that exist in the following general categories:  Growth Capital: Operating companies generating between $2 to $10 million in revenue that are near break-even or slightly to solidly profitable  Buyout / Controlling Interest: Buyout or controlling interest investments in operating companies with a transaction range of $5M - $20M  Early Stage: Early stage investments in healthcare and ITLookout seeks to only do deals where the interests of our investors and our portfoliocompanies are aligned. We conduct thorough due diligence, providing comprehensiveanalysis to our investors so they can make informed decisions. We get to know companieswell, working with management to construct plans before deals are consummated and thefirst Lookout dollars are invested.Our investment management style with our portfolio companies is proactive and involved.We know the hard work begins after making an investment, so we contribute to ourcompanies’ causes by formally consulting with them and serving on Boards of each.We strive to be a good partner to both our investors and our portfolio companies. In ouropinion, it’s the only way to do business. 3
  4. 4. The PrincipalsMerrette Moore – Managing Partner • Co-founder and day-to-day operating executive of Lookout Capital • Over ten years RTP-area investment experience at MCNC, IDEA Fund Partners and Lookout Capital • Serves or has served on numerous portfolio company boards as a director or observer • Investment deal lead for iContact, an email marketing provider that grew from $1.2 million at the time of investment to over $50 million in annual revenue; Sold to Vocus for $169 million in February 2012 • Currently serving as advising consultant to Rex Health Ventures, an strategic investment fund recently launched by Rex HealthcareBill Moore – Chairman • Founder and CEO of specialty investment bank Trident Financial Corp., an industry leader in raising capital and M&A transactions for financial institutions; Trident was sold to KeyCorp in 1999 • Current Chairman of RTI International, one of the world’s leading nonprofit research institutes • Partner, Franklin Street Partners, a Chapel Hill-based investment management business with approximately $2B under management • Professor Emeritus of the Practice of Finance, Kenan-Flagler Business School, UNC-CH • Interim CEO, MCNC, Inc., Led the highly-successful restructuring and reorganization of MCNC 4
  5. 5. The PrincipalsTim Lavelle – Head of Investment Banking • Over 26 years of Investment Banking experience • Former Managing Director of Trident Financial Corporation • Former Head of Financial Institutions Group at Morgan Keegan & CompanySam Drew – Principal • Integral role in developing deals and guiding portfolio companies • Actively involved in assisting firms in various stages of the growth cycle for his entire professional career • Former civil engineer, being the youngest person in the history of his company to run a division, his consistently posted the highest revenue and gross profits within the company • Received his MBA from the University of North Carolina Kenan-Flagler Business School and was a recipient of the Johnson & Johnson MBA student leadership awardJohn Kane – Associate • Responsible for deal sourcing, deal due diligence, fund raising, and support for the general operations of the firm • Former President & COO of YF Atlantic, LLC, the master franchisee of the mid-Atlantic region for one of the world’s largest frozen yogurt franchises • Founder of Midtown Multisport, LLC, the producer of a series of endurance events throughout the Southeast 5
  6. 6. Our AdvisorsLookout Capital has assembled an all-star team of advisors and investors, provenentrepreneurs, executives and investors capable of identifying and evaluating uniqueinvestment opportunities, including:AdvisorsTom Darden– CEO, Cherokee Funds; Former Chairman, Cherokee Sanford GroupPeter Scott– Former CFO, Progress Energy; Founder, Scott Madden and AssociatesPaul Rizzo– Chairman Emeritus, Franklin Street Partners; Former CFO, IBMChamp Mitchell– Former CEO, Network Solutions; Former EVP & COO RJR Tobacco, Co.;Former Partner, Womble CarlyleChip Andrews – Senior Chairman, FMI CorporationBill Ross– Of Counsel, Brooks Pierce; Former Secretary of NC DENRSusan Gravely–Co-founder and CEO, VietriTim Lavelle – Former Managing Director, Trident Financial CorporationNeil Bagchi – Founder of Bagchi Law 6
  7. 7. Investment CriteriaLookout is addressing a niche currently and historically underserved by the capital markets.Our general investment criteria includes:  Companies that desire and will benefit from operational, general management and strategic input from our principals & investors  Companies providing services or products with a demonstrable, sustainable competitive advantage  Companies either in large, highly-fragmented industries or in markets with high projected annual growth  We are industry agnostic, but will invest only in what we know and understand  Business model of recurring revenue or repeat customers  Companies primarily based in North Carolina, preferably within a 2-3 hour drive of Raleigh-Durham  Companies that are capital efficient and do not require a great deal of capital to scale profitability 7
  8. 8. Pre-Funding ProcessWe segment the pre-funding process into 4 general steps: 1) Initial due diligence Consists largely of getting to know the company management and familiarizing ourselves with company operations and financials 2) Core due diligence The period where we dive into the company’s business and mutually determine whether it is in our collective interest to structure an investment 3) Investment terms negotiation The terms under which we will invest, subject to completion of due diligence, and get involved with the company are worked out 4) Final due diligence and deal closing Due diligence is completed and the investment is finalizedThe entire process typically takes several months, with most of the time being spent with thefirst 2 steps. If a company is responsive, then the process timeline is likely to be compressed. 8
  9. 9. Typical Deal Structure ExampleBelow is a summary of the deal terms we typically seek to obtain in ourtransactions. Of course, terms will vary from transaction to transaction.Typical Terms: • Preferred Stock or Subordinated Convertible Debenture • $500K to $20 million transaction size • Lookout may syndicate or act as a sponsor for larger transactions, but prefers to be the lead investor • 5-8% annual rate, possible PIK in first 1-3 years • Lookout representative(s) on board • Required annual independent stock valuation • Lookout-produced required annual evaluation of updated company strategic plan and projected impact on shareholder value • Active initial involvement by Lookout (via a management services or general consulting agreement) 9
  10. 10. Post-Funding Investment Management• Immediately upon investment, Lookout personnel will serve in a part-time management or consulting role. The portfolio company will compensate Lookout for this service.• We will work closely with senior management teams of our portfolio companies to develop annual operating plans and long term strategic plans• We will have at least one Lookout representative on the Board of Directors• Quarterly board meetings and monthly update calls will be required• Every year, we will require the company get an independent appraisal of company and stock valuation• As it is appropriate, we will assist our companies in any financing, liquidity or exit process 10
  11. 11. Why Work With Lookout Capital• We look at our relationships with portfolio companies as a collaboration -- We are a partner, not just an investor• We are actively involved in providing strategic, operational and financial advisory to portfolio companies -- We want to be hands-on, but we are not micro-managers• We have a wealth of experiences and skills among our principals, associates, and advisory boards from which portfolio companies can draw -- We have a successful record of private company investing, growing businesses, corporate board service, and working closely with management teams• We are patient investors -- We are willing to remain an investor as long as our companies continue to build shareholder value• We can help our portfolio companies find liquidity -- We have a demonstrable track record of and a unique ability to structure exit and liquidity events for companies 11
  12. 12. Additional InformationWe encourage prospective companies and investors to meet with and get to know LookoutCapital’s principals, advisors and current investors. We have additional information anddocuments for review. If you wish to follow up with us, feel free to reach out via the contactinformation listed below: W. Merrette Moore John M. Kane Managing Partner Associate Office: (919) 256-3633 Office: Please use mobile Mobile: (919) 491-1805 Mobile: (919) 720-3980 mmoore@lookoutcapital.com jkane@lookoutcapital.com Also, check out our website at www.lookoutcapital.com 12
  13. 13. Legal DisclaimerThis document contains forward-looking statements. The forward-lookingstatements reflect our current expectations and views about future events andspeak only as of the date the statements were made. The forward-lookingstatements involve known and unknown risks, uncertainties and other factors thatmight cause our actual results, performance or achievements to be materiallydifferent from any future results, performance or achievements expressed orimplied by the forward-looking statements. Given these risks anduncertainties, you should not place undue reliance on the forward-lookingstatements. 13

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