The primary objective of Rainbow Capital is to achieve long-term capital appreciation through majority ownership stakes in portfolio companies that meet many of the following criteria:
- Strong management team in place and interested in equity participation;
- Historical operating cash flow at a minimum of $2,000,000 after salary adjustments;
- Stable operating history;
- Strong, defensible market position in its identified niche;
- Established products or services which are not subject to rapid technological change;
- A sustainable competitive advantage through expertise, brand name or distribution channels;
- Geographic preferences include the Northeast, Mid-Atlantic states and Florida;
- Opportunities for growth.
Rainbow Capital specifically chooses to avoid investments in technology development, retailers, apparel firms and real estate dependent industries as well as service oriented concerns that are reliant on a limited number of individuals.