Investment Criteria and Focus
Investment Criteria and Focus
NCIC Capital Fund employs a disciplined investment approach focused on early-stage technology companies with significant growth potential. Our investment criteria have been refined through over a decade of experience and dozens of successful investments.
Investment Stage
We target companies at the early stage of development - typically post-prototype with initial customer validation but pre-profitability. Ideal candidates have:
- Proven Technology - Working prototype or beta product
- Customer Validation - Pilot implementations, design partners, or initial sales
- Team in Place - Core management and technical team assembled
- Growth Trajectory - Revenue traction or clear path to commercialization
- Capital Needs - Seeking $200K to $750K in initial funding
According to the National Venture Capital Association, early-stage investing provides optimal balance between risk and return potential in technology ventures.
Sector Focus
Our investment focus spans multiple technology sectors where we have developed expertise and network connections:
Software and Information Technology
- Enterprise software and SaaS platforms
- Cybersecurity solutions
- Data analytics and business intelligence
- Cloud infrastructure and developer tools
- Artificial intelligence and machine learning applications
Advanced Manufacturing
- Manufacturing automation and robotics
- Industrial IoT and sensor systems
- 3D printing and additive manufacturing
- Supply chain optimization technology
- Quality control and inspection systems
Healthcare Technology
- Medical devices and diagnostic equipment
- Healthcare IT and electronic medical records
- Telemedicine and remote patient monitoring
- Clinical decision support systems
- Healthcare analytics platforms
Clean Technology
- Energy efficiency solutions
- Renewable energy technology
- Environmental monitoring and remediation
- Smart grid and energy storage
- Sustainable materials and green chemistry
Geographic Focus
We concentrate investments in Ohio and Indiana, allowing us to provide hands-on support and leverage regional networks. This geographic focus enables:
- Regular in-person board meetings and strategic sessions
- Quick response when portfolio companies need assistance
- Introductions to regional customers and partners
- Access to university research collaborations
- Connections with follow-on investors and exit partners
Investment Size
| Investment Parameter | Amount |
|---|---|
| Minimum Initial Investment | $200,000 |
| Maximum Initial Investment | $750,000 |
| Total Investment Per Company | Up to $1,500,000 |
| Follow-on Investment Capacity | Reserved for portfolio companies |
We reserve capital for follow-on investments in successful portfolio companies, ensuring we can support companies through subsequent funding rounds until exit.
Management Team Requirements
The quality of management is our most important investment criterion. We seek companies led by:
- Experienced Entrepreneurs - Founders with prior startup or relevant industry experience
- Complete Teams - CEO, CTO, and VP Sales/Marketing roles filled or planned
- Industry Expertise - Deep understanding of target market and customer needs
- Execution Focus - Track record of meeting milestones and managing resources
- Aligned Incentives - Significant equity ownership and long-term commitment
- Coachability - Willingness to leverage investor expertise and guidance
Market Opportunity
We invest in companies addressing large, growing markets. Target characteristics include:
- Market Size - Addressable market of $500M+ with realistic path to significant market share
- Market Growth - Industry growth rate exceeding 15% annually
- Market Timing - Favorable market conditions and adoption trends
- Customer Pain Points - Addressing urgent, expensive problems for customers
- Competitive Positioning - Clear differentiation from existing solutions
Technology and Intellectual Property
Strong technical foundations and defensible intellectual property are essential. We evaluate:
- Technical Viability - Proven technology addressing real customer needs
- Scalability - Architecture capable of supporting rapid growth
- IP Protection - Patents pending or issued, trade secrets, or other protections
- Development Roadmap - Clear path for ongoing product evolution
- Technology Risks - Manageable technical challenges with mitigation strategies
Business Model and Economics
We favor capital-efficient business models with strong unit economics:
- Revenue Model - Recurring revenue, long-term contracts, or high renewal rates
- Gross Margins - Target 60%+ gross margins for software, 40%+ for hardware
- Customer Economics - LTV/CAC ratio of 3:1 or better
- Scalability - Ability to grow revenue faster than expenses
- Path to Profitability - Clear roadmap to cash flow positive within 24-36 months
Exit Potential
Given our 48-month target hold period, we evaluate realistic exit opportunities:
- Strategic Acquirers - Identifiable larger companies with acquisition track record
- Exit Multiples - Industries with strong M&A activity and attractive valuations
- Exit Timing - Realistic path to exit within 4-6 years
- Public Markets - Alternative exit through IPO for exceptional companies
As noted by PitchBook, exit environments vary by sector and economic conditions, requiring flexible exit strategies.
What We Don't Invest In
To help entrepreneurs self-select, we typically do not invest in:
- Life sciences requiring lengthy FDA approval processes
- Capital-intensive businesses (manufacturing facilities, real estate, etc.)
- Retail or restaurant concepts
- Professional services firms
- Companies outside Ohio and Indiana
- Pre-prototype or idea-stage companies
- Companies seeking less than $200K or more than $750K initially
- Businesses without clear technology differentiation
Co-Investment Approach
We frequently co-invest with other venture capital firms, angel investors, and strategic partners. Co-investment provides:
- Ability to participate in larger funding rounds
- Shared due diligence and portfolio monitoring
- Diversified perspectives on investment decisions
- Expanded networks for portfolio company support
- Risk sharing across multiple investors
If you are an investor seeking deal flow or co-investment opportunities in Midwest technology companies, we welcome partnership discussions.