Deal Lifecycle Flow¶

Complete Journey from Origination to Exit¶

The DUC Capital Platform orchestrates the entire investment lifecycle through three integrated applications. This comprehensive guide explains how deals flow through each stage, from initial sourcing to final exit, with detailed workflows and decision points.

The Five Phases of Investment¶

Phase 1: Origination & Sourcing¶

Primary Application: Sagacity
Duration: 2-4 weeks
Key Activities:

Deal Sourcing¶

• Direct Origination: Proprietary deal flow from network relationships
• Intermediary Channels: Investment banks, brokers, and advisors
• Market Scanning: AI-powered identification of opportunities
• Competitive Situations: Auction processes and bilateral negotiations

Initial Screening¶

graph TD
    A[New Deal] --> B{Initial Fit?}
    B -->|Yes| C[Enter Sagacity]
    B -->|No| D[Pass]
    C --> E[Create Deal Room]
    E --> F[Assign Team]
    F --> G[Begin Analysis]

Data Collection¶

• Company information and financials
• Market position and competitive landscape
• Management team assessment
• Initial valuation parameters

Phase 2: Evaluation & Analysis¶

Primary Application: Sagacity
Duration: 4-8 weeks
Key Activities:

Deep Dive Analysis¶

Financial Analysis¶

• Historical performance review (3-5 years)
• Quality of earnings assessment
• Working capital analysis
• Capital structure evaluation
• Debt capacity study

Strategic Analysis¶

• Market size and growth dynamics
• Competitive positioning
• Value creation opportunities
• Risk assessment matrix
• Exit strategy planning

Operational Review¶

• Management capabilities
• Operational efficiency
• Technology infrastructure
• Scalability assessment
• Integration planning

Valuation Modeling¶

graph LR
    A[Financial Data] --> B[DCF Model]
    A --> C[Comps Analysis]
    A --> D[Precedent Transactions]
    B --> E[Valuation Range]
    C --> E
    D --> E
    E --> F[Investment Decision]

Valuation Methodologies¶

1. Discounted Cash Flow (DCF)
2. 5-year projections
3. Terminal value calculation
4. WACC determination

5. Sensitivity analysis

6. Comparable Company Analysis

7. Peer group selection
8. Multiple analysis (EV/EBITDA, P/E, etc.)
9. Benchmarking metrics

10. Trading comparables

11. Precedent Transaction Analysis

12. Relevant transaction identification
13. Purchase price allocation
14. Control premium analysis
15. Market timing adjustments

Phase 3: Structuring & Execution¶

Primary Applications: Sagacity → Bridge
Duration: 6-12 weeks
Key Activities:

Deal Structuring¶

Capital Structure Design¶

• Equity investment sizing
• Debt financing arrangement
• Hybrid instruments consideration
• Management incentive plans

Legal Structure¶

graph TD
    A[Investment Vehicle] --> B[SPV Creation]
    B --> C[Holding Company]
    C --> D[Operating Company]
    B --> E[Token Structure]
    E --> F[Investor Classes]

Term Sheet Negotiation¶

• Purchase price and adjustments
• Representations and warranties
• Indemnification provisions
• Closing conditions
• Post-closing covenants

Due Diligence Process¶

Comprehensive Review Areas¶

1. Financial Due Diligence
2. Audit of financial statements
3. Tax review and structuring
4. Working capital validation

5. Debt and cash verification

6. Legal Due Diligence

7. Corporate structure review
8. Material contracts analysis
9. Litigation assessment
10. Regulatory compliance

11. IP portfolio review

12. Commercial Due Diligence

13. Customer concentration
14. Supplier relationships
15. Market validation
16. Competitive dynamics

17. Growth assumptions testing

18. Operational Due Diligence

19. Systems and processes
20. Human resources review
21. IT infrastructure
22. Environmental assessment
23. Insurance coverage

Phase 4: Tokenization & Distribution¶

Primary Application: Bridge
Duration: 2-4 weeks
Key Activities:

Asset Tokenization¶

Token Creation Process¶

1. Asset Preparation
2. Legal wrapper finalization
3. Rights and obligations definition
4. Compliance framework establishment

5. Smart contract development

6. Token Minting

7. Token standard selection (ERC-20, ERC-1400, etc.)
8. Supply determination
9. Distribution planning

10. Lock-up schedules

11. Investor Classes

    graph TD
        A[Total Investment] --> B[Class A - Institutional]
        A --> C[Class B - Accredited]
        A --> D[Class C - Employees]
        B --> E[Different Rights]
        C --> E
        D --> E

Capital Raising¶

Investor Onboarding¶

• KYC/AML verification
• Accreditation validation
• Subscription documentation
• Capital commitment tracking

Distribution Execution¶

• Offering memorandum distribution
• Roadshow management
• Book building process
• Allocation decisions
• Capital calls and funding

Phase 5: Management & Monitoring¶

Primary Application: Lift
Duration: 3-7 years (holding period)
Key Activities:

Active Portfolio Management¶

Value Creation Execution¶

1. Strategic Initiatives
2. Revenue growth programs
3. Margin improvement initiatives
4. Add-on acquisitions
5. Digital transformation

6. Market expansion

7. Operational Improvements

8. Process optimization
9. Cost reduction programs
10. Working capital management
11. Capital expenditure optimization
12. Organizational development

Performance Monitoring¶

graph LR
    A[KPIs] --> B[Weekly Reports]
    B --> C[Monthly Reviews]
    C --> D[Quarterly Boards]
    D --> E[Annual Planning]
    E --> A

Key Metrics Tracked¶

• Financial performance vs. budget
• Operational KPIs
• Value creation milestones
• Market developments
• Competitive dynamics

Governance & Reporting¶

Board Governance¶

• Regular board meetings
• Strategic decision approval
• Performance reviews
• Risk management oversight
• Stakeholder communication

Investor Reporting¶

• Quarterly performance updates
• Annual audited financials
• NAV calculations
• Distribution notices
• Material event notifications

Exit Planning & Execution¶

Exit Preparation Timeline¶

gantt
    title Exit Preparation Process
    dateFormat  YYYY-MM-DD
    section Preparation
    Exit Planning           :a1, 2024-01-01, 180d
    Vendor Due Diligence    :a2, after a1, 90d
    section Marketing
    Teaser Preparation      :b1, 2024-04-01, 30d
    Buyer Identification    :b2, after b1, 45d
    section Execution
    Management Presentations:c1, 2024-06-01, 60d
    Negotiations           :c2, after c1, 45d
    Closing                :c3, after c2, 30d

Exit Strategies¶

Strategic Options¶

1. Trade Sale
2. Strategic buyer identification
3. Synergy analysis
4. Integration planning

5. Earnout structuring

6. Financial Sale

7. Secondary buyout
8. Continuation funds
9. GP-led secondaries

10. Portfolio company mergers

11. Public Markets

12. IPO preparation
13. SPAC combinations
14. Direct listings

15. Dual-track processes

16. Recapitalization

17. Dividend recaps
18. Refinancing events
19. Partial liquidity
20. Management buyouts

Integration Points¶

Data Flow Between Applications¶

graph TD
    A[Sagacity] -->|Deal Approved| B[Bridge]
    B -->|Token Created| C[Lift]
    C -->|Performance Data| A
    A -->|Exit Planning| B
    B -->|Distribution| D[Investors]

Critical Handoffs¶

Sagacity to Bridge¶

• Investment committee approval
• Final deal terms
• Legal documentation
• Investor allocation

Bridge to Lift¶

• Token registry
• Investor database
• Compliance requirements
• Reporting obligations

Lift to Sagacity¶

• Performance metrics
• Exit readiness signals
• Market intelligence
• Portfolio insights

Best Practices¶

Success Factors¶

Origination Excellence¶

• Strong Sourcing Network: Maintain proprietary deal flow
• Quick Response Time: First-mover advantage in competitive situations
• Clear Investment Thesis: Well-defined criteria and focus areas
• Relationship Management: Long-term partnership approach

Rigorous Analysis¶

• Data-Driven Decisions: Comprehensive analytical framework
• Risk Mitigation: Thorough due diligence and structuring
• Value Creation Planning: Clear post-acquisition roadmap
• Team Alignment: Unified investment committee view

Effective Execution¶

• Project Management: Detailed workstreams and timelines
• Communication: Regular stakeholder updates
• Flexibility: Adapt to changing circumstances
• Speed to Close: Efficient execution capabilities

Common Pitfalls to Avoid¶

During Origination¶

• ❌ Pursuing deals outside core competency
• ❌ Inadequate initial screening
• ❌ Overpaying in competitive auctions
• ❌ Missing red flags early

During Due Diligence¶

• ❌ Confirmation bias in analysis
• ❌ Inadequate management reference checks
• ❌ Overlooking integration challenges
• ❌ Underestimating capital requirements

During Portfolio Management¶

• ❌ Passive ownership approach
• ❌ Delayed intervention on issues
• ❌ Inadequate board composition
• ❌ Poor stakeholder communication

Performance Metrics¶

Lifecycle KPIs¶

Technology Integration¶

Platform Automation¶

Automated Workflows¶

• Deal screening algorithms
• Document generation
• Compliance checks
• Report distribution
• Performance alerts

AI-Powered Features¶

• Market intelligence gathering
• Valuation modeling
• Risk assessment
• Document analysis
• Performance prediction

Data Analytics¶

Real-Time Dashboards¶

• Pipeline tracking
• Portfolio performance
• Market comparables
• Risk monitoring
• Investor analytics

Predictive Analytics¶

• Exit timing optimization
• Value creation forecasting
• Market cycle analysis
• Risk prediction models
• Performance attribution

Regulatory Compliance¶

Compliance Throughout Lifecycle¶

Pre-Investment¶

• Fund formation compliance
• Marketing restrictions
• Investor qualification
• Conflict checking

During Investment¶

• Regulatory approvals
• Antitrust clearances
• Foreign investment reviews
• Industry-specific requirements

Post-Investment¶

• Ongoing reporting obligations
• Tax compliance
• Corporate governance
• ESG requirements

Conclusion¶

The DUC Capital Platform's integrated approach ensures seamless execution throughout the investment lifecycle. By leveraging Sagacity for intelligent deal preparation, Bridge for efficient tokenization, and Lift for active portfolio management, investors can maximize returns while maintaining operational excellence.

Key Takeaways¶

• Integrated Platform: Three applications working in harmony
• Data-Driven Process: Analytics and AI throughout the lifecycle
• Active Management: Hands-on value creation approach
• Efficient Execution: Streamlined workflows and automation
• Comprehensive Monitoring: Real-time visibility and control

Next Steps: Learn about Choosing Your Application or dive into Sagacity's Deal Origination process.