Investment Criteria

Higher Order Capital partners with resilient enterprises positioned for transformation through systematic automation. We identify companies where domain expertise can be amplified through technology, creating sustainable competitive advantages in today's automation-accelerated economy.

Target Profile

Our focus is on established North American businesses with enterprise values between $20-150M in revenue and EBITDA margins of 20% or greater. We seek companies with proven unit economics and scalable operations, particularly those thriving in emerging technology hubs outside traditional centers. These enterprises typically demonstrate strong operational fundamentals while showing clear potential for technology-enabled value creation through our proven Automation Playbooks.

We are actively investing through the Foundation Strategy, our flagship vehicle dedicated to acquiring majority stakes in resilient, profitable businesses. This approach accelerates their transformation into tech-enabled, automation-driven leaders, embodying our Venture Equity (VE) approach—a powerful blend of private equity stability and venture-backed growth potential.

Partnership Approach

We structure investments to align stakeholders and accelerate value creation, whether through strategic acquisitions, management partnerships, or platform transformations. Our approach emphasizes preserving what works while systematically implementing automation to unlock new growth potential.

Through Higher Order Command (Command), our transformation consulting services, we ensure successful execution of automation initiatives across portfolio companies. Learn more about how we implement transformation in alignment with our Applied Automation vision.

Value Creation Potential

Companies that thrive under our Venture Equity model demonstrate:

• Sustainable operational excellence with 20%+ EBITDA margins
• Automation-ready processes
• Industry-leading expertise
• Scalable service delivery
• Large SAM and TAM
• Technology adoption readiness

Automation Opportunity

Our proprietary S2S (Service-to-Software) Assessment provides a systematic framework for evaluating automation potential. This methodology assesses how effectively a company can transform service revenue into high-multiple software revenue.

Investment Parameters

We maintain a disciplined focus on proven business models with predictable revenue, diversified customer bases, and established market presence. This approach ensures we can effectively deploy our automation playbooks while minimizing execution risk.

Investment Restrictions

To maintain our systematic approach to value creation, we do not invest in:

• Pre-revenue or early-stage ventures
• Businesses with significant customer concentration (>20% from any single client)
• Companies without established profitability and positive cash flow
• Turnaround situations or distressed assets
• Capital-intensive business models with limited automation potential

Transform With Us

Beyond capital, we bring systematic implementation expertise and proven Automation Playbooks that help businesses scale efficiently. Our institutional framework ensures successful execution while preserving the domain expertise that made these businesses successful.

Take the S2S (Services-to-Software) Assessment to understand your automation potential or contact us to explore partnership opportunities.