Tonkin Corporation has 7 investment criteria as follows:
The company should have annual revenues between $500,000 and $5,000,000. Lower than this suggests an unproven market or undeveloped marketing capacity. We cannot assist higher than this range, though syndication may be arranged for extraordinary proposals.
The company should own technology that cannot be copied or would take potential competitors at least 7 years to replicate.
The technology should ideally create something completely new. If this cannot be achieved, it should improve a current solution or offer superior integrated design. Regardless of which three paths are taken, the technology should produce a 10X advance.
Use of the technology should accelerate by word of mouth. A customer's adoption of the technology should encourage reciprocal uptake by family, friend, colleague or other business contact. Referrals should fuel growth rather than heavy reliance on paid advertising.
Economies of Scale
Fixed costs should be shared more broadly over ever-increasing sales.
Niche Market Dominance
The company should have offered the technology to an authentically-defined niche which it is dominating. It should not be diluted across multiple segments.
The company should articulate a credible exit plan, including a list of potential acquirers, their recent acquisitions, the valuations of those transactions, and the timing of a planned exit.