Incubating Winners the Federal Circle Way

 

Phase One – Setting the Concept

Step One – Core Team Selection: We begin by carefully selecting teams to work with. Our process is both rigorous and thoroughgoing. We conduct extensive interviews with all the members of your team and conduct basic stress testing. Our objective is to determine if you are going to be up to the challenges of building and manage a winning team.

Metrics:

  • All members of the senior team have been identified

  • Preliminary reference checks and interviews have been completed

  • Meetings have been held with the senior Federal Circle team

  • Area of focus has been agreed to

Step Two -The Executive Council: Once we select a team to work with, we form an executive council to oversee and guide its progress towards acquiring a company. We bring together a range of very experienced, well-connected subject matter experts together to significantly improve the team’s chances of success.

Metrics:

  • A three-person executive council is formed to work with the team.

  • Members are selected based on their knowledge of the space, connections with appropriate funding sources and the contributions they will be able to make to the team.

Step Three – Vision: We focus on your vision, test its viability with market research and situational awareness. We assess your team’s comparative advantage and ability to execute. In most cases, the way forward will involve the acquisition of an existing company. Less frequently, we work with teams to start new businesses.

Metrics:

  • The vision focuses on the industry segment that the team intends to operate in.

  • Depth of knowledge, connections and experience are all important to validating a vision.

  • The Executive Council is confident that the team is fully capable of implementing its vision and carrying out a successful acquisition and management of a target company.

Step Four – Fleshing Out: Once the vision has been thoroughly tested, we help the team develop a business plan. That plan involves identifying, vetting and recruiting candidates to expand the team, business development strategies, selection of acquisition targets, financial resourcing, infrastructure planning, etc.

Metrics:

  • Because most of our teams will intend to purchase a going business, the evolution of a business plan will inherently be more complex than that for a start up

  • Issues such a cultural integration and re-branding will dominate discussions

  • The team will demonstrate that it is aware and capable of dealing with such challenges

  • A plan will be approved which identified the team, business development strategies, acquisition targets, financial resourcing, infrastructure planning, etc.

Step Five – Red-Teaming: Once the business plan is completed, The Federal Circle organizes a red-team to review and critique it. These teams are made up of industry experts, experienced senior executives, attorneys, accountants and retired federal employees. The purpose of red-teaming is to decide whether the team and plan are ready to proceed or needs to go back and rethink.

Metrics:

  • The Federal Circle will form a red-team of independent experts who will assess the team’s members, value proposition, targeting intentions, resourcing plan, implementation capabilities, market credibility, etc.

  • It will be up to the review panel to decide if the team is ready to proceed to the next stage or needs to return to the prior one

 

Phase Two – Planning and Targeting

Step Six – Value Proposition: The value proposition to investors is key to the process. Without it, no team is bankable and the efforts in pulling it together will have been wasted. At this stage, we address core questions such as: What kind of company is the team going to acquire? Why are they qualified to make such an acquisition more successful than the current team? Why is this team bankable?

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Step Seven – Acquisition Targets: A list of potential acquisition targets is developed and prioritized. With support from The Federal Circle, your team opens discussions and performs initial diligence with each target and presents a strategic rational with a set of recommendations to the Executive Council.

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Step Eight – Funding Requirements: Based on the analysis of the acquisition targets, financing requirements are developed for each target.

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Step Nine – Team Development: Most teams will be incomplete during the planning stage. We expect them to expand significantly in response to the management gaps at target companies. The Federal Circle maintains a wide range of contacts within the federal contracting space. We use those contacts to help build out the teams and prepare them to acquire of a company.

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Step Ten – Red-Teaming: Once the planning and targeting steps are completed, The Federal Circle organizes a red team to review and critique the business plan, value proposition and acquisition/funding strategy. These teams are made up of industry experts, experienced senior executives, attorneys, accountants and professional investors. The purpose of red-teaming is to decide whether or not the team and plan are ready to approach investors.

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Phase Three – Funding and Execution

Step Eleven – Introduction to Investors: At this point the team, its value proposition, business plan, list of acquisition targets and the result of the red-teaming are presented to selected investors. The objective of these meetings is to obtain a detailed set of funding commitments.

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Step Twelve – Negotiations: As your team engages with acquisition targets and with the support of The Federal Circle, we will enter into final due diligence and negotiation of terms. This process will result in a set of agreements to acquire the target company.

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Step Thirteen – Funding: In parallel with the final due diligence and negotiation of terms, the team will make presentations to the investors. The objective will be to ensure that the team’s due diligence process and structuring efforts adequately respond to any and all investor concerns.

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Step Fourteen – Acquisition: The Federal Circle will oversee the closing of the acquisition and act as the representative of the investors during the process.

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Step Fifteen – Post-Acquisition: The Federal Circle will act as the investor’s representative in overseeing its investment. It will provide a Chairman and a majority of the board members, subject to the investor’s approval. The Federal Circle will also construct an Advisory Board which will be focused on business development and revenue growth.

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