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Small Business Focus

GCP focuses on small businesses.  The benefits of this focus include:

  • Minimal competition from other investment firms
    • Private equity firms focus on businesses with revenue greater than $10M (lower middle market) to achieve the scale required to meet needs of their institutional investors
    • Venture capital firms require extremely high growth companies and often overlook value oriented companies that generate dependable cash flow
  • The number of small business owners looking to exit will increase over the next ten years as the baby boomers approach retirement
    • 2013 saw a 56% increase in business sales versus 2012, with retirement cited as the number one reason for selling
  • Small businesses with aging owner/operators present several key levers to increase value:
    • Owner/operators decrease focus on new sales/marketing strategies as they approach retirement
    • Most small businesses do not have the scale needed to optimize expenses
    • Average sale price of small businesses is only 2-3x EBITDA