Castile Ventures | Strategy

At Castile, our whole approach to investing centers on building lasting partnerships with entrepreneurs such that the Castile team is an integral part of the value-building process. Because we have successfully managed venture-funded companies ourselves, we understand that there are many opportunities for us to add value by leveraging our experience and expertise. We also understand that young companies are fragile, that delay and indecision can sap value, and that good advice given at the wrong time is usually counterproductive.

To ensure that working with Castile is a mutually rewarding experience, we have developed a systematic investment process that starts with the evaluation of a business plan, and continues through the life of an investment and beyond.

Castile welcomes inquiries from entrepreneurs seeking funding for seed and early-stage companies developing the next generation of telecommunications and Internet infrastructure. We are extremely selective - we review many potential investments for each company added to our portfolio. But every business plan we receive that fits our investment profile in terms of industry sector, company stage, and investment criteria, will receive a systematic review.

Castile invests in companies developing the next generation of telecommunications and Internet infrastructure. We focus on the telecommunications and Internet sectors because it is here that Castile’s extensive knowledge base, contacts and relationships, first-hand industry experience and operating, financial and analytical expertise can lend value to entrepreneurs.

Within these sectors we invest in early stage businesses from entrepreneurs that have solved a fundamental technical problem and need funding and other support to create a winning business plan to young companies that are generating initial revenue and need to fund market expansion. We typically invest between $5 and 10 million through the life of each portfolio company, with an initial investment that can range from several hundred thousand to five million dollars.

We look for companies with business plans that hold the prospect of building substantial value, as indicated by the following criteria:

	Proprietary and well differentiated technology, products or services that should enable the achievement of a leadership position within a key, sizable, industry segment
	Core leadership and vision from either one or more individuals who have collaborated on the company’s essential value proposition
	The potential to become public companies or attractive acquisition candidates within a three to seven year period

Once we decide to invest, we will in most cases do so as part of a syndicate of investors. Our initial investment typically ranges from several hundred thousand dollars to $5 million depending on the stage and financing needs of the company.

As established experts in our focus sectors, we will often take a lead in establishing valuation and financing terms. In some cases we work with the management team to refine the financing strategy, or to explore alternative financing scenarios. Our policy is to be open-minded and to add value - to explore well thought-out opportunities and provide useful feedback and helpful industry and financial community introductions as appropriate.

At Castile we view each investment as a long-term association with a company in productive partnership with its management team. Castile will typically be represented on the Board of Directors and through this interface the entire Castile team is available to actively support the management team with recruiting, positioning, partnering and other types of strategic assistance. We are also well positioned to provide timely assistance in liquidity planning, affording corporate partnering and investment banking assistance and referrals as appropriate.

We will actively support and participate in follow-on rounds of financing to help assure sufficient access to growth capital. We always reserve additional funds for follow-on rounds, with an ability to deploy up to $10 million in support of each portfolio company. Where appropriate we will assist management in securing and structuring follow-on financing from a variety of sources including experienced institutional venture capital funds or strategic corporate partners.

In the case of very early stage companies with exceptional but incomplete teams, Castile can assist in meeting the prerequisites for a full funding round, including completing the management team, and building product, market-entry and business plans that fully leverage the value inherent in the founder’s intellectual property.

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