Grand Avenue Advisors LLC (GAA) reviews and evaluates numerous investment opportunities each year that are presented to us by friends and colleagues. Our evaluation process is simple yet thorough:

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1..Assuming the investment opportunity (the “Opportunity”) is one that at first look shows promise, we will form an evaluation team to analyze it.  Since the GAA Principals consist of two MBAs and two JDs, a typical Evaluation Team comprises one MBA and one JD. 

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2. The Evaluation Team looks at the Opportunity’s financials, management team, structure and documentation.  The goal is to determine what the Team believes are (i) the profit potential of the Opportunity (the greed factor) and (ii) the risks of the Opportunity (the fear factor).

 

3. The Evaluation Team evaluates models of investment scenarios and does its best to approximate the quantifiable risks of the Opportunity. This provides the Evaluation Team with its own risk-to-return profile.  

 

4. GAA attempts to invest with people that the Principals know personally and/or with whom they have previously done business. In all instances GAA does an extensive background check on the Opportunity’s management team.

 

5. Frequently at this point, if not sooner, GAA will go back to the Opportunity’s management team to negotiate favorable terms for our investors.  Because of the size of the companies we evaluate, the fact that we look to invest $5MM-$20MM in an Opportunity provides us with negotiating leverage.

 

6. Very few Opportunities reach this stage but, if the Evaluation Team decides that it is willing to invest in the Opportunity on the terms that come out of Step 5, it presents the idea to all of the GAA Principals.  Only if an Opportunity is approved unanimously by all GAA Principals will GAA present the Opportunity to its investors.  (In certain cases, before making its final decision, the Evaluation Team and/or the GAA Principals may consult with one or more of its Advisory Members or select investors to get their thoughts on the Opportunity.)

 

7. At this stage GAA has a conference call open to all prospective investors, both to meet the management team and to pose any questions. This allows our investors to better evaluate their level of interest in this Opportunity.