Identifying the best investment opportunities comes very vital to guarantee a good return on the investment in place. Investments require capital injections hence the need for a huge capital base to finance the investment. SWK Holdings is a specialized finance company that focuses on opportunities in the global health sector. Innovative capital solutions come in handy to several science companies, institutions, and inventors. A capital solutions company requires a team with extensive experience related to principal investing and structural finance, resulting in a deep understanding of business opportunities. In addition, the capital solutions get expected to provide superior risk-adjusted returns on capital through the investment in marketed ethical product cash flow streams. Various approaches get used to secure a good investment, such as:
Investment process
Am investment process needs to be a disciplined and standardized underwriting process. Emphasis needs to be put on the partner’s unique financing needs while stressing risk assessment and mitigation. Specific capital solutions are time-sensitive and committed, and able to meet aggressive timeframes. The opportunity evaluation and risk assessment process involve activities that bottle down to opportunity identification and funding. The opportunity identification phase includes direct origination, brokers, and industry participants to identify the most worthwhile opportunity. On the other hand, the funding phase involves a term sheet, documentation, and closing that ensures the funding of the option is available and well allocated. The whole process gets completed within four weeks after the signing of the term sheet.
Investment criteria
For maximized return on investment, the investment criteria need to get well-investigated and chosen. Long-term partnerships could get fostered through various characteristics such as aligned and ethical capital solutions management teams. The second characteristic is generally the commercial stage though the pre-approval situations get considered—finally, the products provide a compelling value to the society through safety and improved efficacy. The transaction amounts also need to be considered with selective consideration on more significant transactions. For example, SWK Holdings focuses on transactions in the $5 million to $20 million range. The capital solution firms provide capital to various healthcare sectors, including biopharma, medical devices, diagnostics, life science tools, selective healthcare services, and HIT companies. The capital injections enable multiple institutions to grow and even adopt cutting-edge technology to enhance the services provided.
Creative capital solutions
A long-term investment strategy, permanent capital base, flexible base, among other factors faced by traditional banks, allows capital solutions firms to tailor investments structures. Every structure gets well-tailored to meet the needs of the partners. Clients get structured debt financing, a recourse obligation to the issuer, and provides a flexible credit capital source. Another solution is the synthetic royalties that enable the capital solutions to purchase new royalty interest in an existing revenue stream from the marketer. The final option is the asset purchase, where the capital solutions firm partners with an experienced operator to buy and market a current product. All the solutions get aimed at ensuring capital investment protection.
