Who are we?

Inversion Capital are a group of technologists with nearly a decade's worth of experience working at SMBs & Big tech as a Solutions Consultant. Areas of focus include Software, AdTech and e-commerce.
The fund's investment style is largely inspired by the likes of long term investors such as Buffett, Munger & Peter Lynch. As a "Growth Value" investor, we focus on businesses that continue to have a growth story and are trading at depressed prices below their intrinsic value in a climate of pessimism.
Often, Growth & Value opportunities don't come hand-in-hand. As a result, we may hold cash from as little as days to as long as years, patiently waiting to deploy into select positions.
We aim to hold most businesses for at least 15 years or until a point at which either their competitive moats are threatened or a better long-term opportunity presents itself.

Investment Criteria: "Inversion Process"

Whereas most investors think forward on what businesses to deploy capital into, we begin by solving backwards.

Inversion Capital's core tenet is to search for excuses not to invest in a business.

This is achieved by running down a strict set of criteria from most important to least important, removing risk one layer at a time, leaving only a handful of businesses that have no reason not to be invested in.

The framework in descending importance order:

Industry

  • Is it within our circle of competence?
  • Is it fast-growing and riding on a long-term secular trend with a large addressable market?
  • Any technological innovations that may disrupt the industry in the future?

Product & Go-to-market

  • What do they sell & what makes it so special against competitors?
  • Are margins & cost structure of products competitive & sustainable over long term?
  • Is there diversity of product line revenue streams?
  • How are they acquiring customers and is this method sustainable long term?
  • Why is their customer acquisition methods different from competitors?
  • Do they have distribution advantages/ uniqueness?

"What's next" Story

  • Does the business have announced optionality for future growth levers / moonshots? Are these growth levers explosive?
  • Do they have a large surface area for future unknown growth levers or is there a risk of being silo’d to their niche (i.e. commoditization risk - e.g. become just like any other vendor focusing on eventual commoditized distribution as opposed to innovation - i.e. gross margins fall over long term & terminal value is finite & low).
  • Does the business have a receptive surface area that can leverage secular innovation trends (e.g. Ad-tech with generative models)?

Management

  • Has management demonstrated a track record of integrity?
  • What % of CEO's personal networth is in company's shares & future share allocations?
  • Does management's annual compensation skewed towards stock awards for performance as opposed to a high fixed salary?
  • Is the business currently founder led?
  • How is the CEO's character, is he still young and is there key man risk?
  • Does management's capital allocation track record make sense?
  • Does the CEO have focus (no pet projects/ too many ventures)?
  • Is the CEO ambitious, focused on long term, not afraid of risks and restless with Day 1 attitude?
  • Does voting % of shares make sense?
  • Is future incentive package of management aligned with shareholder interests?

Financial Metrics

  • Is the company balance sheet strong?
  • Has it demonstrated growing revenues over long term?
  • Has it demonstrated growing Operating/Free cashflow over long term?
  • Has it demonstrated growing Earnings per share over long term?
  • Are gross & operating margins doing well long term?
  • Is long term ROIC satisfactorily high?

Talent & Culture

  • How does company and its management rate?
  • Are there anecdotal excerpts of employees that have shared bad/good insights?
  • Any recent cultural bad news in last few years? If so, have proactive remedies been taken?
  • Does the firm have a sustained ability to attract top talent?

Valuation

  • Does current price of company make sense now via various metrics (Earnings, Cashflow, etc. valuation multiples)?
  • Is the company undergoing temporary pessimism?

Final

  • Up to this point, are there absolutely no excuses not to invest?
  • Are we satisfied holding this company for at least 15 years (or until a point where competitive moat is threatened) given the assessments thus far?

Disclaimer

None of the information contained in this site constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy or any form of financial advice. All content in this site is merely an investment journal, noting down any investment theses for Inversion Capital's own action.

Inversion Capital does not take into account of your personal investment objectives, specific investment goals, specific needs or financial situation and makes no representation and assumes no liability to the accuracy, completeness or timeliness of the information provided here.

The authors and Inversion Capital are not responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee or implication by Inversion Capital that readers will profit or that losses in connection therewith can or will be limited, from reliance on any information set out here.

Trades made in accordance with the information contained in an analysis, especially (but not limited to) leveraged investments, such as investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Prior to making any investment or entering into any transaction, you should carefully consider your financial situation and consult your financial advisor(s) in order to understand the risks involved and ensure the suitability for you of any investment or transaction. Any information or opinion provided herein is not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use would be unlawful. All expressions of opinions are subject to change without notice. Opinions expressed herein may be personal to the author and not reflect the opinions of Inversion Capital.

Nothing in this site should be interpreted to imply that past results are an indication of future performance.

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Inversion Capital shall not in any event be liable for any damages or injury arising out of your access to, or inability to access, this site or from your reliance on any information provided here. Inversion Capital disclaims any and all liability for direct, indirect, incidental, consequential, punitive, and special or other damages, lost opportunities, lost profit or any other loss or damages of any kind. This limitation includes any damage or virus, which may affect your computer equipment.

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Reference to any third party information (including information provided by a third party or accessible through any linked site), product, process, or services at this website or any linked site is not an express or implied endorsement by Inversion Capital of the same.