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Our Strategy

At CVF, we don't just invest; we forge enduring partnerships and champion growth in regions packed with opportunity. We aim to navigate the ever-evolving landscape of regional investment, unlock potential and drive prosperity for businesses and communities alike.

 

We focus our investments within the vibrant economic landscapes of the western region. We leverage the growing economies throughout California, Central Valley, Pacific Northwest and Mexico. CVF specializes in transactions often overlooked by larger providers. With a track record of success and a commitment to nurturing growth, we stand as a leading provider of mezzanine capital, ready to unlock the potential of businesses across these vibrant regions.

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California

 

Starting off in the golden state of California, where opportunity thrives, we strategically navigate the dynamic terrain of the state's growing economy, boasting a GDP of $3.8 trillion and contributing over 14% to the total U.S. GDP. At CVF, we know that smaller transactions are often overlooked by larger providers, that is why we are focused on investing in the diverse sectors of the state's leading industries, such as financial services, professional and business services and manufacturing. Our commitment to California’s market has elevated us as a premier provider of mezzanine capital to lower-middle-market businesses across the entire state.

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Central Valley

 

Venturing into the heart of California, the Central Valley, we recognize its increasing potential. Spanning 19 inland counties and hosting approximately 18% of the state's population, this region anticipates the fastest growth in California through 2040. While agriculture is its cornerstone, the Central Valley's diversified economy extends into industrials, business services, consumer discretionary, materials, and information technology. CVF sees the Central Valley as fertile ground for investment, driven by its favorable location, climate, cost of living and quality of life, attracting businesses poised for growth.

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Mexico

 

Recognizing that nearly 38% of California's population is Hispanic and a significant portion of Hispanic-owned firms are located across the Southwest U.S., including California, Arizona, New Mexico, and Texas, CVF is committed to expanding its outreach to underserved markets. Leveraging robust relationships with key organizations in Mexico, such as Nacional Financiera and ProMéxico, CVF has gained invaluable insights into the Hispanic market.  CVF aims to drive growth and prosperity for both businesses and communities across these vibrant regions through targeted investments and cross-border opportunities. Whether it’s through establishing plants/factories in Mexico in collaboration with our existing portfolio companies, extending crucial support to Hispanic entrepreneurs in the U.S. who require access to capital, or forming strategic partnerships with Mexican companies/funds seeking investments in the U.S., our goal is to drive sustainable growth and prosperity for Hispanic-owned businesses and communities across these vibrant regions.

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Pacific Northwest

 

Turning our gaze towards the Pacific Northwest, we capitalize on its stellar rankings in numerous business studies and its recognized growth prospects. While larger investment funds gravitate towards urban markets, CVF recognizes the untapped potential in less-urban areas, particularly for lower-middle-market companies hungry for event-driven capital. With investments already made and a burgeoning deal network established, CVF stands poised to nurture small business growth and investment in the region. Our deep-rooted experience in Washington and Oregon positions us as ideal partners for local entrepreneurs, ready to propel their ventures to new heights.

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Criteria

CVF Capital Partners seeks to invest in small and medium-sized businesses in a range of industries across the Western United States. CVF can provide both debt and equity capital in flexible and creative capital structures, either as a standalone investor or with investment partners.

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We invest in:

  • Management Buyouts

  • Growth or Expansion Capital Raises

  • Recapitalizations

  • Mergers or Acquisitions

  • Buyout of Retiring Owner(s)

  • Generational Transfers

 

Our target companies generally meet the following criteria:

  • Revenues of $10M to $100M

  • At least $1M of Cash Flow

  • Principal operations in the Western United States, most commonly in California or the Pacific Northwest. CVF will selectively consider transactions outside the Western U.S.

  • In business at least five years, with a minimum of three years of prior financial statements

  • Strong management team, either incumbent or previously identified as part of an acquisition

  • Meaningful management ownership and appropriate incentives

 

Investment Structure

  • Combination of Subordinated Debt and Preferred Stock instruments

  • Majority or minority equity investments

  • Investment size of $5M to $15M, with larger commitments possible through co-investment with other funds or sponsors. Additionally, we can support our portfolio companies with new capital for follow-on transcactions

  • Board seat or observations rights

  • Investment horizon of approximately five years

 

Industry Focus

  • Business Services

  • Transportation and Logistics

  • Niche Manufacturing

  • Value-add Distribution

  • Niche Sub-contractors

  • Food, Beverage, and Agriculture

Typical Transactions

01

Growth and Expansion Capital

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Management Buyouts

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Acquisitions

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Recapitalizations (debt refinancing, intra-shareholder stock purchases, etc.)

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Independent Sponsor backing

Investment Criteria

01

Mezzanine Capital – Subordinated Debt and Preferred Equity

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Generalists – industry agnostic

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Minority or Majority positions

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EBITDA - $2M to $10M– growing companies

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$5M to $18M invested per transaction
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Hispanic Businesses

The Hispanic population is the fastest-growing demographic in both California and the United States, with the U.S. Census Bureau projecting it to account for nearly 65% of total U.S. population growth through 2060. As of the 2013 U.S. Census American Community Survey, California’s population was almost 38% Hispanic. Additionally, Hispanic-owned firms were estimated at 3.1 million in 2014 and increased at nearly double the rate of general U.S. firms, with roughly 75% of those firms located in California, Arizona, New Mexico, and Texas.

 

CVF has evaluated or invested in many Hispanic-oriented businesses. CVF has greatly benefited from relationships with several México-based organizations that have extensive networks and insight into the Hispanic market. These include Nacional Financiera (México’s economic development bank), FOCIR (México’s Agricultural development fund), ProMéxico (part of México’s Secretary of the Economy), FIRA (Trust Funds for Rural Development), and Fondo de Fondos (México’s largest private equity investor). We believe that our experience in the sector affords us key insight into the cultural, economic, and other factors that are expected to drive the Hispanic customer and entrepreneur going forward. CVF is committed to expanding outreach to the Hispanic community and other underserved markets across the Southwest U.S., including such states as California, Arizona, New Mexico, and Texas.

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