When David Thibodeau, managing director for Wellvest Capital, a merchant bank in Boston that focuses solely on the wellness industry, looks at a company for investment, he looks for sustainable revenue and growth in an accelerating category.
Another important thing? Having broad and deep sales in a category or geographic area. "It's a challenge for investors to get their arms around where the real opportunity is if you've only got sales in one or two or three customers, or there's one customer that represents 50 percent of your sales," he says.
Watch this interview from Natural Products Expo West for his recommendations on how companies can develop realistic expectations for their valuation and avoid major mishaps that are likely to prevent a deal.