FAQ - Fontis / Rustic Canyon Partners, LP - Southern California-based private equity fund, investing principally in companies in the Southwest

What should one look for in a private equity partner?
Choosing an equity partner is a very important decision in the life of a company. Entrepreneurs should seek investment partners that share a similar operating philosophy, have similar ideas with regard to strategic decisions, are capable of adding value, and have a record of success.
Do you prefer early, middle, or late stage investing?
We feel our greatest strength lies in helping to grow companies. We generally prefer expansion stage (or later) investments where our experience and contacts are most beneficial.
Do you prefer being lead investor?
We have chosen to make fewer, larger investments so that we can bring focus and commitment to each investment relationship. Playing the lead investor role is consistent with our approach, however, we almost invariably invest with other reputable private equity firms. In the event others lead, we still intend to play an active role with the portfolio company.
Do you always ask for a board seat?
We have found that sitting on the board of our portfolio companies allows us to make the maximum contribution to their success. If we lead the investment, or make a sizable equity investment, a board seat is required.
What is the best way to reach you? Do I need an introduction?
We welcome business plan submissions by email or surface mail. Contact information can be found at Contact Us.
How can I be sure you'll keep my idea confidential?
We believe that successful investment partnerships are predicated upon trust between the entrepreneur and the investment professional. As such, we protect our reputation for professionalism and integrity. We will always respect the confidentiality of our discussions with you.
What information do you find most helpful in evaluating my business idea?
A complete business plan is always very helpful, but a concise executive summary can usually give us the information we need for a preliminary evaluation. The following is a suggested checklist of information to include. Being able to quickly identify answers to the following questions will enable us to get back to you quickly with our feedback.
• What industry sector and major role does your company play?
• What is your company's positioning statement?
• What products or services allow you to retain this position?
• Who is your customer and what is your customer acquisition strategy?
• What unique competitive advantages do you have?
• Who or what is your current competition?
• Where are you in building the company? (i.e. startup, expansion / middle rounds, or later round).
• Who are you and who is part of your team now? (Please include key bios, number of employees.)
• What is your current capitalization structure? (Please list the owners and other investors of the company and the percentage each owns.)
How long does it take you to make a decision and fund an investment?
You can generally expect to hear back from us a few days after submitting a business idea with our preliminary thoughts on the “fit”. An in-depth phone conversation, visit to your site, and early partner review takes about three weeks. Should we proceed, we will outline a diligence plan and give you our preliminary thoughts on potential investment terms. The diligence process usually takes another three to four weeks. At the conclusion of diligence, we would issue a formal investment memorandum and have our counsel draft the legal documentation. Beginning to end, the process typically takes no more than 60-90 days. We can move extremely quickly when circumstances demand. However, we do believe in thorough due diligence, a process that occasionally may extend the completion. The process may be accelerated when the business plan information is comprehensive or when RC Fontis already has considerable industry knowledge.
What factors will influence your decision?
While we recognize that there is no single determinant of success, our investment assessment typically focuses on three areas -the size of the market, the capabilities of the management team, and the differentiation of the company's products and ideas. We are also influenced by the interactions we've had with the entrepreneurs during the decision making process.
What can I expect from the due diligence process?
Our due diligence process typically includes an examination of your key customers, partnerships, and a verification of the differentiation of your product or service.
What type of exit strategy do you prefer?
We anticipate our exits will present themselves in the form of sales to strategic buyers, recapitalizations, management buy-outs, and IPO’s should the climate be favorable.
Does RC Fontis invest in startups?
No. Fontis invests primarily in expansion stage companies with demonstrated profitability. Visit the Profile section to learn more about our criteria.
What is the dollar range of funding provided by RC Fontis?
RC Fontis invests between $3 to $12 million in a company. In cases where more funding is needed, RC Fontis will lead a syndicate of funding sources. Visit the Profile section to read more about RC Fontis’ role.
What percentage of a company does RC Fontis buy?
RC Fontis may acquire a control or non-controlling interest in portfolio companies. Our ownership percentage is determined by the size of investment and the fair market value of the company.
How do I get to your office?
Click on Contact Us.