DeSME Investment Strategy A Robust Approach to MSME Investing

DeSME’s mission is to empower high-potential Micro, Small, and Medium Enterprises (MSMEs) in captive markets. With a proactive and hands-on approach, we leverage our experience and capital to discover and invest in promising opportunities, guided by clear selection criteria.

Our partnership criteria include

Equity Stake Range 25% to 50%

We seek an equity stake ranging from 25% to 50%.

Profitable with 50% Gross Margin

We target companies that are already operational, profitable, and have a gross margin of at least 50%.

Rapid Break-Even: 15-Month Horizon

Our partner companies should demonstrate a break-even point no longer than 15 months.

Captive Market Expansion Potential

We favor companies that possess a captive market ripe for expansion.

Our investment strategy

Stage 1: Short-Term Partnerships

1. Short-Term Event-Based Partnerships

In the initial phase, our emphasis is on short-term, event-based partnerships that last anywhere from 3 days to 2 months. This could involve sponsoring MSMEs’ booths at trade fairs, exhibitions, or other high-traffic business events.

2. Seasonal Sales Partnership
Strategy

Exploring collaborations during peak sales seasons (e.g., Christmas, New Year, festivals) in MSME-operated regions. Despite smaller investments, these partnerships can yield returns of 100–350% by capitalizing on temporary revenue spikes.

3. Relationship Building for Future Investments

It’s important to note that this isn’t a franchise model. DeSME will not operate the expanded business; instead, the business will continue to be run by the partner entity. Our partnership pertains solely to the expanded business segment, not the partner entity’s primary business.

Stage 2: Expansion-Focused Partnerships

1. Capital-Driven Growth Support

As our capital base expands, we shift our focus to support the growth plans of established MSMEs. We provide financing to facilitate the opening of new locations, equipment purchases, hiring initiatives, or the launch of new products or services.

2. Unlocking Market Potential with Proven MSMEs

Exploring collaborations during peak sales seasons (e.g., Christmas, New Year, festivals) in MSME-operated regions. Despite smaller investments, these partnerships can yield returns of 100–350% by capitalizing on temporary revenue spikes.

3. Segment-Specific Partnership Model

Highlighting that DeSME's involvement is not a franchise model. Our partnership is exclusively for the expanded business segment, ensuring that the partner entity continues to operate its primary business independently.

Final Stage: New Venture Investments

1. Strategic Investment in New Ventures

In the final stage, our robust cash reserves enable us to make substantial investments in promising new ventures. As founding partners, we play a pivotal role from the business plan development stage to execution.

2. Strategic New Ventures: 15-Month Break-Even Criterion

Maintaining our strict 15-month break-even criterion for new ventures, we embrace the uncertainty of returns. Early involvement with breakthrough MSMEs presents an exciting opportunity, guided by our experience in informed investment decision-making.

3. Exclusive Equity Investments

It’s crucial to mention that we exclusively undertake equity-based investments and do not provide interest-based debt financing.

Conclusion

Our goal at DeSME is to cultivate an ecosystem that achieves dual objectives:

For example, if our portfolio includes an IT services company and a quick services restaurant, we could enable a partnership where the restaurant provides a customized lunch delivery services for the IT company’s employees.

MSMEs offer rewarding investment opportunities due to their significant economic contributions, agility in capturing market opportunities, and potential for exponential growth. our partnership-based investment strategy is specifically designed to align with their evolving financial needs, maximizing returns for our investors, and empowering MSMEs to realize their full potential.

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