Guidepoint Study Set

PUBLIC EQUITY: MUTUAL FUNDS

similar to hedge funds, who invest in the debt or equity of publicly traded companies. . A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus (may be high risk, low risk growth, etc). One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. The primary underlying differences between hedge funds and mutual funds are two-fold; 1) individuals can invest in mutual funds at extremely low minimums making them available to a greater number of investors and b) mutual funds don't pursue aggressive returns in the same way hedge funds do. As such, mutual funds do not generate the same level of investment fees that hedge funds do and are therefore more price-conscious when it comes to paying for primary research. Only the largest mutual funds use expert networks.

VENTURE CAPITAL FUNDS

similar to private equity funds, except for the fact that they invest in earlier-stage companies

TYPES OF VENTURE CAPITAL TRANSACTIONS

transaction types in venture capital, outlined below A. Pre-seed: earliest investing stage, typically < 5% company ownership, check sizes can be $500k B. Seed: next stage of investing, typically < 15% company ownership, check sizes can be a few million C. Series A: first large check size. Investors typically ask for 25%, check sizes can be $50m+ D. Series B: another large check round. Investors typically ask for 33%. Check sizes can be $100m+ E. Late-Stage Venture: this refers to any round C-F. High equity dilution for founders. Large check sizes F. Growth Equity: unlike venture where multiple different firms make up a funding round, growth equity is typically a single investor buying 25%+ in a private company. Large check sizes for usually $20m+ for the one firm.

CREDIT HEDGE FUNDS

Credit hedge funds are extremely similar to equity hedge funds in a number of ways, however, the invest in the debt of companies as opposed to the equity. As a result of this distinction, often times the upside or return potential is capped, and therefore, they charge fewer fees and are more price-conscious when it com es to research tools such as expert networks

WHAT WE DO

- 1:1 PHONE CONSULTATIONS - INSIGHTS TELECONFERENCES (Fundamental Analysis Events, Learning Series Events, Longitudinal Surveys, Insights Library) - INSIGHTS LIBRARY - IN-PERSON MEETINGS (Roundtable, Major Conference Group Meetings, Customized Tours, One-on-One Meetings) - SURVEYS - QUICK POLLS - GUIDEPOINT Q SIGHT: ALTERNATIVE DATA - SHARED CALLS

TYPES OF PRIVATE EQUITY

- Alternatives Giants - Middle Market Private Equity Funds - Secondaries Funds - Co-Investment Funds

CREDIT & LENDING

- CREDIT HEDGE FUNDS - DIRECT LENDERS

DIRECT LENDERS / PRIVATE CREDIT

- Direct lenders are similar to private equity funds in that they invest exclusively in private companies. However, direct lenders typically provide the debt that is used for private equity funds to be able to buy a business through a leveraged buyout

Guidepoint CRM

- Guidepoint version of salesforce

TYPES OF CREDIT HEDGE FUNDS

- High-Yield - Distressed Debt

TYPES OF HEDGE FUNDS

- Multi-Manager - Single Vehicle - Crossover - Activist - Event-driven / special situations - Multi-Strategy

LEARN OUR CLIENTS

- PUBLIC EQUITY (HEDGE FUNDS, MUTUAL FUNDS) - PRIVATE EQUITY (PRIVATE EQUITY, VENTURE CAPITAL)

Linkedin Sales Navigator

- active database of people's occupations

Guidepoint key differentiators

- active, custom recruiting (500 new experts each month) - large expert network (1.1 million) - service quality

PUBLIC EQUITY: HEDGE FUNDS

- aggressively manage portfolios of public company investments - use sophisticated strategies - such as leverage, long / short, and derivative positions - to generate high-returns for their clients - can invest in either debt or equity - the General Partner (the fund) receives capital from Limited Partners (investors) - limited partners include defined benefit pensions, sovereign wealth funds, funds of funds, family offices, and ultra-high-net-worth individuals - hedge funds are under immense pressure to generate returns QUICKLY

Salesforce

- company profiles actively updated - keep track of deals and opportunities

IHS Market BIg Dough

- for public equity prospecting - shows investments of each person

Pitchbook

- shows current active investments of xyz company portfolio (private equity prospecting) - shows their exits after growth transaction - shows their whole team's contact information

Service Quality

Once a client sends us a research request, we put together a list that includes the biography of the experts, their availability, their responses to the screening questions, and some color on why we think they are relevant.

MOST ACTIVE SECTORS

Sectors that Guidepoint's venture clients are most active in include software and tech-enabled services, enterprise technology, internet, e-commercia, fintech, consumer and healthcare.

DISTRESSED DEBT

an investment strategy where a credit hedge fund invests in the debt of companies who aren't just struggling but are undergoing severe financial distress and often bankruptcy (Chapter 11)

Multi-Manager

a centralized management team allocates the fund's capital to different "pods" or "managers" internally, allowing the firm to better control risk and return. Each pod is typically specialized by either sector (healthcare, technology, etc), investment strategy (l/s equity. Merger arb, risk arb, etc) or both

Multi-Strategy

a hedge fund structure where the firm has a number of investment strategies and individual funds associated with each strategy housed under a single firm. Note, multi-manager hedge funds are also often multi-strategy hedge funds

Event-driven / special situations

a hedge fund structure where the firm invests in a wide variety of assets, typically unshackled by sector, geography, or debt vs. equity. Their research process involves finding a catalyst for investment such as identifying a trend, a significant merger / acquisition, or a company going into chapter 11 (bankruptcy)

Crossover

a hedge fund structure where the firm invests significant capital in publicly traded equities which allows it to take one or multiple seats on the company's board of directors. After it's acquired these seats, the firm typically tries to enact various strategic initiatives or push for structural changes it feels with raise the company's stock price. These can include firing c-suite executives who are underperforming, divesting certain assets or business lines, or changing the company's compensation plan. After the firm's stock price has risen, the hedge fund sells its shares at the higher price and realizes its profit

Single Vehicle

a hedge fund structure where the firm's capital is pooled into a single. very large fund and deployed opportunistically across sectors, markets and geographies

SECONDARIES FUNDS

a private equity structure where the firm buys either individual companies or entire portfolios directly from other private equity firms in the "secondaries market." Some secondaries funds have a documented history of using expert networks, and some don't. Often times, returns for this strategy are lower, and therefore the size or AUM of the firm is an important factor in determining use or non-use

ALTERNATIVE GIANTS

a private equity structure where the firm houses a variety of different "alternative investment strategies" such as buyout, middle market, venture, and credit under a single brand. These firms typically manage obscene amounts of money, in the hundreds of billions of dollars

CO-INVESTMENT FUNDS

a private equity structure where the firm invests alongside other private equity firms, called co-investing. Some limited partners (LPs) such as pensions and family offices have co-investing teams so that they can invest in companies alongside the private equity firms who they also invest in. Co-investment funds typically rely on the diligence of other private equity investors, and therefore have a limited need for Guidepoint's services

MIDDLE MARKET PRIVATE EQUITY FUNDS

a private equity structure where the firm invests in mid-sized companies across a variety of industries. They buy-out these companies, meaning more than 50% of each, and then try to improve operations before selling the company in 3-5 years

HIGH YIELD

an investment strategy where a credit hedge fund invests in the debt of struggling companies. Return is proportionate to risk in debt investing, therefore, the debt is "high-yield" because it is riskier

PRIVATE EQUITY (PRIVATE EQUITY AND VENTURE CAPITAL)

invest in the equity of private companies. Private Equity funds are structured similarly to hedge funds where there is a General Partner (the fund) and Limited Partners (investors). LPs at hedge funds are the same types as LPs at private equity and venture capital funds as they are both restricted to what the Securities and Exchange Commission (SEC) dubs "Accredited Investors." In terms of how private equity makes money, investors pay the fund both a management fee (typically 2% of invested assets) and carried interest (e.g., 25% of profits above an internal rate of return of 20% for the fund). Because of this, similar to hedge funds, private equity firms are under pressure to deploy the capital they manage in companies. Private equity strategies involve buying private companies or shares of private companies, improving operations (growing revenue, cutting costs, rolling out new products, expanding to new geographies, providing support to management, applying financial leverage in the form of debt) and then exiting that company in 3-5 years via: A. Sale to another Private Equity firm in the secondary market B. Sale to a strategic acquirer (large corporation like Microsoft or Wallmart) C. Sale to public market investors via an Initial Public Offering (IPO) Private equity firms leverage Guidepoint's services to conduct due diligence (research) on the companies they're thinking of investing in as well as assist with portfolio company initiatives to increase value. 1. New Transaction Diligence (75% of the use case) - Any new investment the VC/PE firm is making 2. Portfolio Company Strategy (25% of the use case) - Working with existing investments for additional acquisitions, strategy, new product launches, etc