Virginia Capital Partners

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Uses of Capital

Entrepreneurs and management teams use our capital to realize their ambitions. We are totally focused on the success of our portfolio companies, which have used our capital and assistance for a variety of strategic objectives. A sampling of our investing capabilities is outlined below.

Growth Capital

Growth capital allows businesses to expand more rapidly or take advantage of opportunities requiring more capital than a company can generate from its cash flow or existing lenders or owners.

Perhaps you have identified opportunities to expand your business organically, but lack the capital to implement them. You might be considering an expansion into new geographic markets or offering a new or complementary product or service. Maybe you would benefit from a larger sales force or a new distribution strategy. Or you have developed a new product or service that requires capital to become a reality. If any of these situations sound familiar to you, then a growth capital investment may be the right option.

With growth capital, management retains operational control of the business while utilizing Virginia Capital's financial and strategic assistance to help grow your business. We typically take a minority stake in the company, so your team retains day-to-day control of the business while tapping new resources that can take your company to the next level.

Acquisition Capital

Acquisition capital provides the resources to build your company by purchasing a competitor, a complimentary business or supplier.

You may have had acquisition discussions with a competitor but lack the capital to consummate the purchase. Perhaps you are aware of a faltering business available immediately but the purchase requires considerable equity capital. Maybe a similar business in an adjacent market is for sale but your bank won't provide the financing without additional equity. If any of these situations apply, then acquisition capital may be right for you.

We view ourselves as a hands-off investor that provides strategic and financial guidance to help proven entrepreneurs reach their company's full potential.

Geographic Expansion

You've succeeded from building your business from the ground up. Now you are ready to grow into new markets. Perhaps you have grown your business into a highly profitable regional enterprise but see new opportunities in adjacent markets. Entering new markets can require considerable capital and brings on new risks to the core business. Virginia Capital will provide capital to a new jointly-owned company that can tackle the new market opportunity. This leaves you in full control of your existing business and isolates the risk in the new entity.

Startup Capital

Building a company from the ground up is one of the most challenging endeavors in business. Aligning with the right capital partner can ease part of the challenge.

Perhaps you have an idea to start and build a business in an industry where you have previously succeeded. You have a proven team ready to join your venture and can demonstrate profitability or operating cash flow within a reasonable time horizon, but need the initial funding to make it happen. If you are looking for a committed financial partner with a long term investment horizon, then Virginia Capital can offer the backing and guidance to help build your plan into a market-leading enterprise.

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Public Company Assistance

The cost of operating a small, public-company today is overwhelming and some of these companies may be able allocate these resources to more useful purposes, such as growth. In addition, small, public-companies, especially micro-cap companies, are frequently overlooked by the capital markets. If your industry is out of favor or if you have realized a set-back, it may be difficult to raise capital to support new growth initiatives. Virginia Capital can provide capital for: growth, geographic expansion, acquisitions, recapitalizations, or restructurings.

We will also finance "going private" transactions for public companies that are either too small for public markets or whose management has a business plan that is most appropriately executed as a private company. We generally seek to work with existing management to affect a management- supported buyout, but we will also pursue opportunities to acquire companies in need of meaningful operational or financial change.

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The current recession has battered many small businesses, especially those that took on debt to finance growth. With revenues down and margins squeezed, many owners are finding themselves with lenders who want immediate liquidity. If you have a good company with a bad balance sheet, Virginia Capital may be able to help recapitalize your business, reduce your indebtedness and provide capital to get your business growing again.

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Shareholder Liquidity

Shareholder liquidity provides cash for founding shareholders seeking to sell a stake in their business and diversify their financial holdings, while staying at the helm of the business.

You may be interested in realizing some liquidity while retaining operational control of your business. Perhaps you would like to diversify your financial holdings for tax or estate planning. Or your partner might require liquidity while you want to accelerate the growth of the business. Maybe you have early investors who need liquidity even though you think your best days are ahead. If any of these situations apply to you, then shareholder liquidity may be the right option. With this liquidity opportunity, you or your partners can reap the rewards of your hard work and diversify your personal wealth—without giving up control of the business.

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A recapitalization may be viewed as an alternative to an outright sale or public offering. Business owners can use a recapitalization to fund substantial ownership transitions or to sell a majority interest in their company.

You may be interested in realizing substantial liquidity and making changes in your management or ownership. You might prefer to sell most of your ownership but not all. Perhaps you want to bring in professional managers to run your company and continue as a partial owner in the company's future success. If any of these situations apply to you, then recapitalization may fit your needs.

Recapitalizations provide shareholder liquidity, while allowing management to retain leadership positions or to work with Virginia Capital to bring in a new management team.

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Management Buyouts

Management buyouts allow the executives to buy the business.

Perhaps the owner of the business is removed from day-to-day operations and considering a sale and your management team is seeking to take control of the company. Or your corporate parent may be planning to sell your division or subsidiary. You may need a partner to provide financing and strategic guidance going forward. If any of these situations apply to you, then Virginia Capital could be the right partner to finance your buyout.

Management buyouts can also be useful in transferring ownership from retiring or inactive founders to the current management team and Virginia Capital. To ensure that cash flow is available to fund future growth initiatives, we structure transactions with modest debt.

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