About Us

NextRidge searches for opportunities to deploy capital to assist a specific class of small businesses, called NextRidge Companies™, in growing and succeeding over the long-term. NextRidge seeks to take control-oriented positions in these small businesses, partnering with management teams and individual entrepreneurs, to provide them with outstanding resources to help them grow into world-class companies.

NextRidge Companies™

There is a large pool of long standing, well performing companies that have hit the wall. They consistently produce sales in the $5 to $10 million range and churn out cash flow suitable to their owners’ needs year in and year out. They are in highly fragmented industries that can provide the opportunity for growth, but these companies do not grow past the $10 million sales level. The reasons for this are numerous, including inadequate funding or improper capital structure, lack of vision or desire, lack of knowledge or talent and small or poor market definition.

Out of the large pool of companies described above, there are a few companies that meet additional criteria. NextRidge believes these companies provide the opportunity for excellent returns with lower risk and have the potential to grow into world-class enterprises through organic growth, acquisitions and professional management.

Active, Value-added Investor

Identify Barriers to Growth

The fundamental barrier that NextRidge Companies encounter is lack of management depth. This does not mean that current management is ineffective.  Quite the opposite, the management in place tends to be highly competent.  What is lacking is a complete management team. Financial or other organizational factors tend to create a situation where the creation of a full team is stopped. This can be for as simple a reason as the entrepreneur does not wish to grow the company further, since it meets his or her family’s cash flow needs, to a misunderstanding of the role of a Chief Financial Officer.

Most entrepreneurs tend to see a CFO as an expense, not as a manager of financial discipline and creator of capital, thereby stymieing the financial heath of the concern. Another common situation is lack of sales team depth. If one’s family is currently making a living from a business, it can be hard to imagine investing in additional salespeople that would decrease current cash flow in return for the potential of higher cash flows in 12 to 18 months. Ultimately, identifying whether the limiters to growth are systemic problems within a company or fixable definable issues is a key component to NextRidge’s investment selection process.

Help NextRidge Companies Grow

Once a suitable company has been selected and acquired, NextRidge, in conjunction with management, works to build a suitable complete management team, creating an organization that can competently manage the additional growth that is created organically and through acquisitions.  Through strategic partnership with an administrative service firm, a provider of accounting, payroll, telecom, information technology, human resources and recruiting services, NextRidge is able to offer dedicated, highly skilled resources to each of these areas on a shared basis, thereby providing corporate level talent on a cost effective, as needed, basis. Finally, NextRidge offers a Managed Entrepreneurship Program to the key personnel of its portfolio companies, creating a common language and vision to set proper goals and objectives for managing the company.

Determining Exit Strategy and Realizing Value

After an initial acquisition of a portfolio company, NextRidge works with management to develop goals and objectives.  Together they then work to grow the business to achieve economies of scale through smart acquisitions and targeted organic growth.  Through the dedication of management and NextRidge, the team works to expand revenue and cash flow of the portfolio Company to the size of a smaller middle market company, seeking to create a natural exit to either strategic investors or private equity funds focused on acquisition in the space.

NextRidge seeks to employ a disciplined approach to maximizing value.  In consultation with management, NextRidge develops a clear understanding of the exit strategy and of the likely timing of harvest.  Understanding value requires a view on not only specific company’s performance, but also sector growth rates, total market size, strength and sustainability of niche, relative competitive strength, and investment community perspective.  NextRidge and management, track each of these factors (and other factors it believes are relevant) with regard to each company, so that it has an understanding of when an exit is most appropriate.