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Second Alpha makes secondary investments in private companies, purchasing shares from existing shareholders-- founders, executives, angels, VCs or corporate investors. In addition, the firm invests capital directly in private companies that meet its investment criteria, usually in tandem with making secondary purchases of shares from existing investors, but also in situations involving debt conversions, restructurings, recapitalizations or pay-to-play financings. Companies that fit Second Alpha's maturity criteria include: Mature venture-stage, growth equity and middle market firms; Companies with at least $20 million revenues; and Companies with a defined path to profitability and the ability to become cashflow positive within 18 months. Second Alpha is particularly interested in companies that have a large portion of their businesses based on highly-recurring revenue models (e.g., subscriptions, term licenses, highly-recurring transactional models, etc.). While officially sector-agnostic, Second Alpha primarily invests in companies with a TMT (Technology, Media and Telecommunications) orientation. Second Alpha targets companies headquartered in the United States and Canada. Occasionally, Second Alpha will consider investments in private companies headquartered in other countries. In 2012, the former limited partners of the Dolphin Equity funds sold a substantial portion of their interests to an investor syndicate that has turned to Second Alpha to manage these interests as general partner. Second Alpha differs from most dedicated secondary firms in that it considers deals of all dollar sizes and can offer custom liquidity solutions for the full range of stakeholders in private companies. Second Alpha is open to unconventional secondary-linked deal structures including recaps, debt conversions and pay-to-play financings, and the firm is extremely data-driven in its approaches to deal sourcing and due diligence.
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