Investment Strategy
Oak Investment Partners provide growth capital for global technology leaders.
Oak’s franchise partners form a strong investment team foundation that brings decades of experience helping build growth companies in our key investment domains. Coupled with a multi-stage investing approach that identifies growth inflection points, we believe Oak is extremely well-positioned to generate exceptional returns for investors, particularly in today’s challenging market environment.
Oak delivers strong returns by identifying and building equity positions in emerging growth companies around the world. Our decades of experience as venture capitalists in our focused industry sectors allow us to have a strong impact on the success of the companies we back. The returns on those investments are achieved by building leading companies that can sustain exceptional growth rates in some of the fastest growing markets globally. Our returns are derived by applying our domain knowledge and experience to support differentiated business strategies within industry sectors we know well.
Our returns are not dependent on complex financial engineering or on access to the credit markets. The prospective growth rates of the businesses we target are high enough to drive strong equity returns and do not need financial leverage or other complex balance sheet structures. We clearly understand the risks involved and are equipped to have a strong impact on the businesses in which we invest.
Our multi-stage investing approach enables Oak to finance companies as they reach their inflection point, or when markets change. At this juncture, resourceful companies can establish a leading market position, protect that position, and maximize value creation. Oak’s strategy is to identify the point where market demand and technology intersect and to identify the best positioned company with the vision, product offering, and management team to capitalize on this opportunity.
The current financial and economic conditions present an unusually attractive environment for Oak XIII. The combination of a prolonged closing of the IPO markets and the retrenchment of hedge funds and LBO firms away from financing private growth companies has created a shortage of financial alternatives for world-class growth ventures. Oak XIII will be a beneficiary of this funding dislocation, becoming one of the few top-quality investors for high growth, global technology companies requiring $25 - $150 million equity infusion within our target domains.
The key elements of Oak’s investment strategy are as follows:
• Serve as lead or co-lead investor. The Partnership will generally invest between $25 million to $150 million and seek ownership levels of at least 20% to, in some cases, greater than 50%. Oak will assign a project team to each investment consisting of, at a minimum, a Managing Partner, General Partner and, in most cases, an experienced venture partner committed to building market leaders. In a large number of cases, Oak “runs the deal” with group support from our entrepreneurs and management teams. This structure provides mature and enduring stability in times of financial or market crisis and insulates the management team from the issues of other less seasoned venture firms.
• Focus within domains. Over the past 30 years, Oak has continued to build upon its expertise in the technology industry, which is the foundation for our domain expertise in Broadband Internet and Wireless Communications, Information Technology and Software Outsourced Services, Consumer Internet/New Media, Financial Services Technology, Healthcare Information and Services, Clean Energy, and Retail. Our deep domain knowledge provides us with an advantage when sourcing and assessing new investment opportunities, as well as when building value through our network of relationships in the sector.
• Follow a multi-stage approach. The Oak strategy is stage independent, starting from early-stage ventures to more mature, later-stage situations. We expect to invest roughly 75% of the Fund in later-stage growth companies. The remaining 25% of the Fund will be focused on early-stage investments that target disruptive innovations, primarily in Clean Energy.
• Back proven management teams. Oak invests in and partners with high-integrity, entrepreneurial management teams that are resourceful, disciplined, and motivated by the appropriate incentives.
• Utilize venture partner team. Oak’s global team of venture partners is comprised of former industry-leading executives who augment our strength in sourcing, evaluating, and company building. Oak’s relationships with several of our venture partners have spanned more than a decade. These individuals add their domain-specific networks and experience-tested perspectives. The venture partners are significant contributors to the Oak deal teams, and many of our venture partners work full time with Oak.
• Leverage the Oak network. The majority of Oak’s investment opportunities come from a robust and diverse global network of industry participants – CEO’s, entrepreneurs, technology executives, investors, bankers, lawyers, and Oak affiliates. The wide reach and ongoing expansion of this proprietary network enables us to source new investment opportunities and follow-on acquisitions for Oak’s portfolio companies globally.
