FAQs
FREQUENTLY ASKED QUESTIONS
What is a Private Placement investment?
Private placement investments are early stage investments in emerging companies that will, hopefully, become successful large companies. Private placement investments typically are not publicly traded on any stock market.
What is Private Equity?
Private Equity is a broad financial term that refers to any type of contribution of value to an asset base that is not freely tradeable on the public stock or bond markets. Private equity is generally cash. Unlike publicly traded stocks and bonds, participating investors own an interest in the tangible assets of the companies and projects they join. In the past, private equity projects were reserved for the very wealthy. In today's business environment, individuals of high-net-worth are finding that they can participate in those same opportunities.
Why does SCI focus on small and micro-cap companies?
This segment of the public equity market presents significant investment opportunities. Because of our experience in this sector and because of the inefficiencies inherent in researching these companies, we can see advantages that others often miss.
Why is Private Equity so popular?
The success of true private equity investors has received a lot of attention in our modern market. Turbulent public markets, economic uncertainty, out-of-control commissions, indefensible corporate salaries, and rewards for poor performance have created a general lack of trust in behemoth corporations. All these factors lead many savvy business people to want to place their cash directly in real cash-flowing assets they can see managed by people they can trust.
Who qualifies as an "Accredited Investor"?
To participate in any SCI investment offerings, you must be accredited which means you are one of the following:
- Any director, executive officer, or general partner of the issuer (Sponsor) of the securities being offered or sold, or any director, executive officer or general partner of that issuer.
- Any natural person whose individual net worth, or joint net worth with the person's spouse, exceeding $1 million at the time of the purchase.
- Any natural person who had income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse exceeding $300,000 in each of those years and has a reasonable expectation of the same income level in the current year.
- Any trust with assets in excess of $5 million, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that s/he is capable of evaluating the merits and risks of the prospective investment.
- Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000.
- Any entity in which all of the equity owners are Accredited Investors.
How can my company introduce an investment opportunity to SCI?
Business plans or enquiries should be directed to SCI International , 555 Hennessey Road, Causeway Bay, Hong Kong or email info@smallcapinvesting.com
Is Private Equity right for me?
During your consultations with SCI, we will have a candid discussion to determine if Private Equity programs are right for you. If Private Equity is a good fit for you, we will develop a strategy to give you a balanced portfolio.
Why are private equity projects so successful?
- Private equity managers tend to be very conservative.
- Private equity managers require a steady stream of reporting and exhaustive research.
- Private equity managers are quick to capture new innovations that will improve portfolio profits.
- Professional private equity programs are not "Top Heavy" with many levels of bureaucracy.
- Private equity managers focus on results and performance, with an eye towards the golden egg at the end of the process.
- Furthermore, at SCI international we ensure success by constantly strengthening projects with diversificationwhich adds stability to each portfolio.
What kinds of transactions do we typically invest in?
SCI International invests in both private companies as well as micro-cap public companies. In most cases we use an approach that stresses our involvement. We work to add value during a two to five year investment horizon. When we make an early stage investment (Seed or First Round), we look for a long-term vision, for an extremely management team capable of growing the business. In later rounds, we look for rapidly growing companies, poised to be leaders of large markets and led by a high quality management team.
Who are SCI International?
SCI International was founded in year 2000 as a diversified investment firm focused on value-added alternative investments. SCI has three product areas: Private Equity, Small Cap and Indirect. While each fund has its own dedicated team, the teams work together synergistically to pursue great investment ideas by sharing ideas & research.
What type of exit strategy is SCI looking for?
SCI's preferred exit strategy depends on what is most suitable for the portfolio company and can include an initial public offering (IPO), merger, acquisition or management buy-back.
What is the process after I submit my executive summary for review?
After we receive your business plan, an SCI executive will review and evaluate your opportunity for investment. If we determine your opportunity is not a good fit, we will inform you that we are not pursuing an investment. If we determine that your opportunity may be a good fit, we will contact you to request more information. If we are interested in learning more after reviewing this information, we will setup a conference call or face-to-face meeting to get to know you, your team and your opportunity in more detail.
What is an attractive time period for a company's exit strategy?
Like most VC's, SCI International is looking for companies that can reach an exit event in 3 to 6 years.
Can I raise venture capital if all I have is an idea?
Raising venture capital with just an idea is difficult. Most traditional venture firms will focus on companies that have established operations and management and have developed or completed its products or services. Raising capital for an idea-only business almost always requires seed capital from Angel investors, which is typically accomplished through a private placement.
What type of return is SCI looking for?
At liquidation (merger, acquisition, IPO or buy-back), most early-stage VC firms are looking for returns of about 5 to 10 times of their investment. While returns vary by industry and deal structure, a company with lower than 3x return on investment will have difficulty obtaining venture capital and should consider alternative funding sources.
How many investments does SCI International make every year?
To support the close working relationship we build with our portfolio companies we tend to make a small number of investments each year. On the average, we take on about 5-10 new commitments per year, in addition to follow-on investments in current portfolio companies
