Consistent with the Firm's overall investment philosophy, Citron Capital's venture group operates with a
longer-term view towards creating shareholder value. We seek companies that have the potential to be
significant, interesting businesses that can either create entirely new markets or have a high degree of
impact upon existing ones. As a firm, we are particularly attracted to technologies, services and product
offerings that have the potential of being truly disruptive or that leverage proven, successful business
models to enable customers to achieve new levels of efficiency, cost-savings and productivity.
We are not momentum investors. Our preference is to make fewer, larger bets on deep, defensible
technologies, media, and communications solutions and to work very closely with these portfolio
companies to maximize their full potential.
Team orientation
A great deal of our time and energies are invested in seeking the right kind of visionary entrepreneur and
management team to partner with. Great technologies or communcations solutions are of little value
without a strong, seasoned management team that can execute the right strategy. Indeed, many of
today's market leaders in their respective sectors did not possess the best technologies, media assets,
or communications solutions upon their inception. The landscape of technology, media, and
communications is littered with the stories of failed companies that possessed robust products, services
and solutions but were not able to execute effectively. The right team can take a good technology or
service and make it a great one; but a weak team can rarely succeed with a superior technology.
Leveraging our resources
Great organizations are not built overnight. The process of building an early stage company is inarguably
front-loaded. A good deal of time is spent laying the right foundation in terms of culture, strategy,
technology, alliance building, and branding. Due to the time and attention these companies take in the
early stages, we are highly selective with new investments. One of our core strengths as venture investors
is our operating depth and global market knowledge. As such, it is important that we can visualize clear
points of intersection between our capabilities as investors and advisors and the needs of the companies
we evaluate for investment.
Capital allocation
Approximately 40% of the capital base of Citron Capital I, L.P. is allocated to early, mid-stage, and later
stage venture investments. Within that allocation, our venture investments are evenly divided between
technology and media/communications. Roughly 45-50% of our venture investments are in information
technology, primarily: business applications; enterprise solutions (and related areas); infrastructure
software; IT services; and business process/services outsourcing. Another 45-50% of our venture
investments are in the broad communications and media domain, principally, data, voice, wireless and
IT solutions, media production and distribution, and communications systems, software and services.
We maintain a limited and opportunistic exposure in industrial, consumer, and 'clean' technology and
energy-oriented companies that we find attractive on a 'special situations' basis.
