Initial Screen
- Search for consistent revenue growth, margins and return on capital.
- Focus on technology, health care and consumer sectors
Initial Research
- Evaluation of industry dynamics and competition
- Evaluate competitive advantage, growth prospects and margin structure
Deep Dive Research
- Understand the long-term vision and elements of execution
- Evaluate the management team and if the culture is effective
- Understand the ability to generate cash and prospects for reinvestment
Decision Process
- Determine if the company is worthy of ownership
- Assess if company trades at discount to intrinsic value
- Consider Red Team scenarios
- Determine position size based on evaluation of range of outcomes
Value Creation
We believe that investing in innovative companies creating change builds the most value over time. Leveraging our proven investment process, we seek to identify and own companies with:
-
Durable competitive advantage
-
Repeatable revenue growth
-
Superior margin structure and return on capital
-
Robust reinvestment opportunities
-
Effective management team
Philosophy
We believe that:
Investing in innovative companies creating change builds the most value over time.
Investing in innovative companies that generate cash flow and earrings.
Investing in innovative small and mid-sized companies allows us to take advantage of the most inefficient segment of the market.
About Arrowside Capital
A Boston based employee owned investment firm focused on innovative companies that have demonstrated financial discipline. The firm was founded in 2022 by Tucker Walsh, who has more than 30 years of experience in investing in small and mid-sized innovative companies.
Portfolio Construction
Favor Small and Mid Cap companies.
25-40 holdings.
Largest position size is 7%. Smallest is 1%.
Larger positions more resiliency; smaller positions more optionality.