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POWER OF A STRONG COMPETITIVE CAPITAL ANALYSIS: It defines the Opportunity

by Dianna Raedle July 25, 2024

Institutional Capital Providers have many investment alternatives and even those who consider themselves “bottoms-up” investors will consider an investment framework which considers portfolio construction when they make an investment decision.

Essentially, portfolio construction is a competitive analysis framework.  A Capital Provider will ask themselves “How does this opportunity fit into my portfolio and is this the “best” opportunity for my portfolio?”  

The answer to “best” can only happen within the context of a portfolio’s goals and objectives compared with all available opportunities.  Therefore, it is imperative to understand and be able to articulate how/why an opportunity is the “best” within the context of a competitive position.

Strong Competitive Analysis => Funding Opportunities

Building a competitive analysis is essentially a Peer Analysis.  There are two relevant Peer Analyses for building a strong capital competitive analysis.

The Financial Peer Analysis provides a quantitative comparison, focusing on metrics like revenue, EBITDA, IRR, and MOIC.  This analysis provides Capital Providers with the tools to assess the financial performance of an opportunity relative to its peers.

The Strategic Peer Analysis offers a qualitative perspective, and it helps to provide the Capital Provider with a peer comparison of the strategic aspects of a financial narrative. The Capital Provider should gain a strategic understanding of why this opportunity is the “best” opportunity for their portfolio construction goals after analyzing it.

Strategic Peer Analysis Sample MetricsDescription
StrengthsIdentify and compare important strategic strengths with competitors
WeaknessesIdentify and compare important strategic weaknesses with competitors
Market ConditionsIdentify and compare important market conditions with competitors
Processes or WorkflowIdentify important processes or workflow with competitors

If you would like to discuss this further – Contact us!  Or, if you or one of your clients is thinking about or has a capital opportunity – we advise on creating successful outcomes.

Contact Us:

Deer Isle Group

info@deerislegroup.com

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Founded in 2007, Deer Isle is an innovative investment bank that equips capital market participants with the tools they need for transparent, seamless, and efficient capital markets transaction success.

Since our inception, we have facilitated over $5 billion in capital transactions through Deer Isle Capital, LLC—our FINRA-registered broker-dealer—for companies and funds across various security types, sectors, and geographies.

At the core of our approach are effective, unbundled capital solutions, offering expertise and guidance that can be customized to meet each client’s unique needs. Our services, available on an "as-needed" basis, include:

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