This article offers guidance on building your Investment Thesis, which, for the NCA Selection Process, will be in the format of a PowerPoint deck composed of 10 slides. Generally speaking, your thesis proposes and recommends a new investment (i.e. your search and acquisition), based on research and analysis of its potential for profit. Your Investment Thesis deck is important because - in addition to your professional experience - it is the foundation of your NCA candidacy, your interviews, and your evaluation during our Selection Process.
The Assessment Center team works closely with you in the early stages of the process, offering feedback at each step to help you refine your deck. Every conversation you have with NCA should improve your Investment Thesis, until it is a polished presentation - which you are extremely confident in - when you present at the Assessment Center, the final step in the Selection Process.
For more details on the Selection Process and how you will be evaluated at each step, please click here.
What is the importance of the Investment Thesis?
We use your thesis during the Selection Process in a number of ways to evaluate your candidacy and your fit for our ETA Program. Your thesis helps us to ensure your background and living experience matches your intended search industry and geography. You should have lived and worked 10+ years in the country you will be searching in, and your search should be based on an industry you have extensive professional experience in.
We also use your thesis to ensure that your ideal Target Company matches NCA’s Investment Criteria (listed below in FAQs) as we can only move forward with candidates whose thesis aligns with the Program requirements.
Your Investment Thesis also helps us understand whether you have a concrete strategy for post-acquisition value creation and growth. We need to be able to assess how you intend to grow the business and deliver ROI, as this would drive potential investor confidence in your search and acquisition.
Lastly, your presentation and delivery of your Investment Thesis - in addition to the actual details of your search - also plays a crucial role in your acceptance to our Program. You will be evaluated on your executive presence during your pitch, along with your ability to capture the audience's attention during your presentation, answer questions clearly and confidently, and respect the presentation time constraints.
Below are some tips from our Assessment Center team to help you prepare - and master - your Investment Thesis.
Deck Content
The core messages you should communicate in your Investment Thesis are the reasons why this is a sound investment and why you are the right person. Your thesis needs to capture the attention and interest of investors who want to see and hear a compelling story of why they should invest in this potential acquisition, and it should leave them feeling confident they will get a return on their investment.
Your deck should offer details about your Search Market (industry analysis, market trends and a range of valuations in the sector) and provide clear numbers around your “universe” of search (i.e. how many Target Companies you will be looking at in your industry/geography, filtered by the NCA Investment Criteria). Include the main attributes and financial KPIs of your ideal Target Company, highlighting any specific segments or categories.
You will also be expected to include a clear, post-acquisition value creation and growth strategy, highlighting the approach you would take and concrete examples that you have implemented in the past. This will give the audience confidence that you will be able to replicate some of those things again and build value in a business that will ultimately result in a return for investors.
Finally, it’s important that you also speak about yourself and how your experience, network and background are relevant to your search. Make sure to mention how you will conduct your search and which channels/networks you will leverage to reach Target Companies.
Formatting Your Deck
The visual appearance of the slides themselves is important, but we do not provide a template because we want to encourage your own unique approach - this is your story. While you do not have to be a PowerPoint expert, we do expect more than simple white slides with very wordy text, as your deck should be formatted professionally to drive investor interest.
Thesis Delivery & Presentation
The presentation of your thesis is just as important as the information conveyed within your slides. We are looking for an engaging executive presence, which includes professional dress code and body language. We want to see your personality and feel your excitement.
We are also looking for talking points that go beyond what is on the slides themselves. Instead of reading what is on your slides, try to deliver your presentation in a storytelling way that captures the attention of your audience.
Remember that this is a pitch and it’s important to speak to the why; we want to know why you are pursuing EtA instead of creating a new company, why you are applying to our program, and what your motivations are for seeking a CEO role in your sector. Entrepreneurship Through Acquisition is a challenging journey, and we need to be sure you have the passion and willpower - in addition to the experience - to master the challenge and stay the course, even when the search gets difficult.
After your presentation, you will be expected to be able to defend your thesis during a rigorous Q&A session, so be sure you are prepared to answer difficult questions confidently.
Troubleshooting & Backup Plan
We know that despite hours of practicing your pitch, things can go wrong. Try to minimize the off chance that there could be a technical failure by having a backup second device. Ensure you also have a strong wifi signal and consider having a hotspot that you could use if your wifi drops.
Key Takeaways
Your Investment Thesis deck will be used at every single stage of our Selection Process, will become the foundation for your search, and will also be used for your investment committee presentations. It needs to include the right content, look professionally formatted, and be complemented with a strong, practiced delivery that will leave investors feeling confident in this investment and your ability to ensure a return.
Please remember that we are here to support you. The Assessment Center team puts a lot of time and energy into helping you refine your thesis during the Selection Process, so it’s important to see your deck evolve at every step along the way as you implement our feedback. We look forward to working with you!
--------------------------
Below are a few common Investment Thesis FAQs. If you’d like additional insights on how to best prepare for our Selection Process click here for recommendations from our Assessment Center team.
INVESTMENT THESIS FAQs
1. What are the NCA Target Company Investment Criteria?
- EBITDA in the range of 1–5 million
- Target Company valuation of 4x – 6x EBITDA
- Strong EBITDA margins (>15%)
- Enterprise value in the range of 5-50 million with a core focus of 10-30 million
- Profitable with positive cash flows and a history of growth
- Capex light
- Space for operational improvement and, or revenue expansion
- Ability to achieve complete control through purchase
- Owners looking to realize the value and willing to participate and support during a transition period
- Turnarounds or start-ups are excluded
- Carve-Outs & Spin-offs only in exceptional cases
2. What are the NCA search geography, language and living requirements?
- You must be fluent in the local language
- You have lived and worked in your chosen region 10+ years
- You have a local network
- You have a good understanding of local business culture and etiquette
3. Is it okay to search across different countries?
Yes, as long as your geography of search matches our Program’s language and living experience requirements. If your search geography does not match the below requirements, you will be asked to revise your search geography and reapply during the next application cycle.
4. My industry of search is very broad, is this ok?
If your industry of search is very broad (for example, “Healthcare in the USA”), it is important that you, as an industry expert, clearly define where the opportunities are that you would like to pursue.
5. My industry of search is very narrow, is this ok?
Hyper focused searches are welcome as long as there are enough companies you could potentially explore as part of your universe (1,000+ companies). If there are only 25 companies for you to look at in your industry of search, you will be asked to revise/broaden your industries/sectors and reapply during the next application cycle.
6. How do I figure out my “universe” of search?
Your “universe” of search is the number of companies in your search geography and industries/sub-sectors, determined by using publicly available data. Be sure to remove scale ups, start-ups, and ESG non-compliant companies, and be sure to filter your list using NCA’s Target Company Investment Criteria.
7. I don't have access to databases, does NCA provide the data for my presentation?
We do not provide data to candidates during the selection process. You should rely on publicly available data and country specific resources to complete your analysis.
8. What is the dress code for my Investment Thesis presentations?
While we do not want to impose a specific dress code, we encourage you to choose something that exudes a professional, executive presence, like a nice button-down shirt or a blouse.