FAQs
What is Safeguard’s typical transaction size?
Safeguard typically deploys up to $25 million in growth capital in entrepreneurial growth-stage life sciences and technology businesses.
What is Safeguard’s market focus?
Safeguard targets life sciences companies in Molecular and Point-of-Care Diagnostics, Medical Devices, Regenerative Medicine, Specialty Pharmaceuticals and selected healthcare services; and technology companies in Internet / New Media, Financial Services IT, Healthcare IT and selected business services.
What is Safeguard’s typical ownership position?
We are typically the primary or largest shareholder in our partner companies. Our percentage of ownership is in the range of 5% to 50%, giving us the ability to influence partner company strategy, direction and operations without actually owning controlling interest. Occasionally, Safeguard will take a majority or a smaller stake in a partner company. Either way, we have a well-defined exit strategy that is established prior to acquiring our interest.
What does Safeguard typically look for in potential technology partner companies?
In technology, Safeguard targets recurring-revenue companies in Internet / New Media, Financial Services IT, Healthcare IT and selected business services, which share a “transaction enabling” thesis and are near cash-flow positive. Safeguard assesses these following criteria when evaluating a potential partner company:
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Revenue/Execution Stage Companies — We screen for businesses with developed products or services that are actively raising capital to execute their plans.
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Strong Management Teams — There is no substitute for a strong, experienced, industry-tested management team.
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Recurring/Transactional Revenue Models — Recurring revenue from subscription- or transaction-based business models are attractive and preferred.
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Market Leadership — Our bias is for target companies at or near the top position in their markets.
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Efficient Use of Capital — The ability to generate positive cash flow or break-even on capital raised is desirable.
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Potential to Grow Organically and/or via Acquisition
What does Safeguard typically look for in potential life sciences partner companies?
In life sciences, Safeguard targets high-value areas of Molecular and Point-of-Care Diagnostics, Medical Devices, Regenerative Medicine, Specialty Pharmaceuticals and selected healthcare services, which represent lower regulatory risk and near-term revenue. Within these segments, Safeguard focuses on companies that possess:
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Innovative Products or Services — We look for products or services that enjoy significant patient, consumer or physician acceptance with prospects for meaningful payments or reimbursement.
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Rapid Path to Commercialization — We prefer to deploy capital in businesses with well-defined and capital efficient paths to commercialization.
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Leadership and Strong Management Teams — A core team of strong professionals is essential for navigating development or commercialization.
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Mitigated Risk — We seek evidence of achieving meaningful early regulatory or commercial milestones that demonstrate value in the marketplace or for potential acquirers.
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Significant Margins — Target companies should establish cost-of-goods selling prices to permit meaningful gross margins; operating expenses must be appropriate to the opportunities or present synergies for an acquirer.
What’s the difference between Safeguard’s business model and that of venture capital or private equity firms?
Safeguard’s business model affords us the ability to be patient in guiding the partner company’s growth, while continually building value for our shareholders. From the entrepreneur’s vantage point, we’re not forced into a premature exit to return capital to limited partners, so we can raise a new fund every three years. There is no pre-determined cut-off date to sell our ownership position. Generally, we hold a partner company as long as we believe the risk-adjusted value of our holdings is maximized by our ownership and effort.
Beyond providing capital, how else does Safeguard add value to its life sciences and technology partner companies?
In addition to capital, Safeguard supports partner company growth and development with comprehensive resources, including financial and business technology strategy, operations, sales, business development, mergers & acquisitions, risk management, legal counsel, human resources, marketing communications, public relations and investor relations.
