In the first place, we choose the company we invest in, based on its management team. Being entrepreneurs ourselves, we can spot the best leaders. We look for teams, which are competent enough in their field and are well balanced. We choose entrepreneurs completely dedicated to their work, seeing it as their mission in life.
We invest in companies that operate on big markets. Preferably above 1 billion dollars. The reason for this is that when the market is big, the revenue grows exponentially. For instance, with a 5 billion BGN market, if you own 5 %, then your business is valued at 250 million BGN. At the same time the team has enough money and time at their disposal to make the mistakes necessary for growth. Sometimes we invest in companies that operate on smaller markets, but they dominate this market and for this reason they have become very strong in their segment, which makes them profitable long-term.
We look for a technological advantage with all our investments. Why does technology make the good or the service better than what the competition offers? Technology is ingrained in our DNA and that’s what we are competent at and what we look for. Without technology it is impossible to create high added value, hence you cannot generate tremendous revenue for your investors. We love old industries that meet new technologies.
We prefer to invest in companies who create new markets. Thus we are sure that if we do well, we will have a market leader in the given segment, which is one of the necessary conditions for fast growth and high yield. Besides, we follow the world trends and we aim to find the Bulgarian equivalents of global products and services.
The competitive advantage.
Our portfolio of companies has competitive advantages that make their model hard to replicate. Sometimes this is their early launch and their leading position, but it can also be a technology, or access to a market, or a business model and so on. We always look for a competitive advantage, which is close to impossible or too expensive to replicate.
The added value.
We can add significant value in the companies’ development, when they are B2C, i. e. targeted towards the end customer. Monthly our media group reaches millions of people, which is a very suitable marketing channel for the promotion of new products and services. Since we know the different segments of our audience very well, we can tell what it is interested in, what messages get to it, its purchasing power, its demographic specifics and so on.
The risk analysis
HR Capital is a relatively conservative family company. When we make a new investment, we always carry out risk analysis. There are many risk factors, which we follow and know based on our long-lasting business experience in many different fields. We aim to de-risk our investments by co-investing with professional investment funds like Eleven and others. In this case, the leading investor in the spotlight is different and we are just a co-investor. Thus, we don’t incur large expenses on the creation of the investment, because we step on the leading investors’ due diligence.