The Apollo Capital Strategy
Apollo Capital is typically solicited by over 180 public and private small cap companies every year to provide investment banking and corporate financial advisory services in order to raise debt and equity capital (typically $5 million to $100 million per client). Apollo Capital’s focus and selectivity (less than 5 % of these potential clients actually qualify to be Apollo Capital clients). With a strong constant deal flow Apollo Capital has implemented a thorough due diligence process wherein we identify the most undervalued potential micro cap companies to be potential Apollo Capital clients. This allows us to work with the best micro cap companies and provide a valuable product to our investors. We rely on fundamental analysis as well as some macroeconomic observations to find extremely undervalued stocks with favorable growth prospects. We look for niche companies that will continue to grow rapidly in a short period of time.
Our team and services benefit a wide range of public and private companies throughout the U.S. and abroad. However, because our time and resources are limited, and because much of our compensation comes in the form of restricted stock, we must be extremely selective in terms of the companies with which we work.
By far, the leadership team is the most important factor we consider in evaluating a prospective client. This team is typically comprised of one or more entrepreneurs, and is responsible for the eventual success of the enterprise.
Specifically, we look for the following characteristics in our teams:
- Integrity. We seek leaders who value open and honest communication, enthusiasm, clarity, focus, drive, and intelligence, and whose lives are built on and based on these things.
- Track Record of Success. In general, we seek clients that are led by previously successful entrepreneurs and business leaders. However, we also understand that everyone has a first success, and we are more than willing to back leaders who have succeeded at non CEO roles before.
- Drive to Achieve. Because we can only work on a few client engagements each year, we want each to have the potential to earn an investment return of several hundred percent. This eventuality is most likely when the key leaders of a company are driven to achieve.
- Clarity. We understand that clarity of structure, role, plan, and thought gives our clients the maximum chance to reach a high level of success.
In addition to evaluating the team, we look for certain fundamental characteristics in the prospective clients we choose to work with.
For Growth Companies:
- We look for large potential markets and a defensible product advantage or innovation.
- We like to see up trending sales and high sequential sales growth rates, even if the company is not yet profitable.
- We look for (or help create) a rational business plan that is constrained in terms of people, time, and capital. We do not believe in trying to boil the ocean.
- We look for a rational level of market capitalization and enterprise value.
- We avoid over leveraged balance sheets and onerous capital structures.
Although this presents some general guidelines in terms of what we seek in our clients, these categories and lists are by no means exhaustive. We understand that each situation is different, and as long as the team fits our criteria, we will consider any prospective client either public or private.