OUR INVESTMENT STRATEGY

BBox Capital invests in differentiated, early-stage real estate businesses which are founder-led and in need of capital for further growth and expansion

• Grow portfolio
• Build organisation
• Develop product

We take substantial minority positions in the first growth phase with the opportunity to become a majority owner over time if the founders should consider an exit. In general, all our capital is invested for growth

• Early stage growth equity
• Initially minority position, later stage majority position if considered by the founder(s)
• Ownership of 10% – 49%
• Enterprise Value of companies of €5M – €75M, equity positions of €0.5M – €25M

BBox Capital sees itself as a helpful keel to the founders’ well-sized sails. We support the founders with:

• Finding the right financing structures for growth
• Balancing the trade-off between following all growth opportunities available and keeping the focus
• Defining & refining the business model to ensure that no value is left on the table
• Articulating a business plan which attracts further debt and equity capital in the future

We like:

• Modular and standardised
• Beautiful and aesthetic
• Flexible and movable
• Value chain efficiency (understanding which parts the value chain should be owned to maximise value)
• Green and sustainable

SYSTEMATIC APPROACH TO VALUATION CREATION

We have six main questions for all our investments to identify whether there is a systematic and manageable path towards value creation

1. What is the value or value potential of the property given it’s design, branding, expected use and location? Can the property achieve competitive capital or rental values?
2. Is the cost of the real estate product – consisting of construction, land and maintenance – competitive and consistent so that it creates a superior margin between value and cost (ie, attractive unit economics)
3. Is the market for the product large enough so that the business model can be scaled up?
4. Is the real estate product sustainable so that it meets anticipated future regulatory requirements and has a positive impact on its environment?
5. Is there a way to change the business model (often integrate the value chain) to operate the business more profitably and with lower risk? The classic example is to move from being a pure manufacturing business to becoming a rental business.
6. Do we have a reason to be there and do we like what we do? Are there skills and experiences needed which we can bring to the table and can we commercially and emotionally align ourselves with the founders around a vision for the company?

Answering all six questions positively does not make a good investment per se but it gives us an excellent starting point to develop a game plan and structure our due diligence