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Investment Strategies

Three Arrows Capital is a family office that invests in the following asset classes:

Fundamental Investing in Listed Securities

We research and invest in publicly listed securities. Although we follow a value-based approach, we have a special focus on identifying strong business models with a preference for event-driven situations.

We write about our opinions and methodology for equity investing in the Fundamental Finance Playbook.

Cryptocurrencies and Security Tokens 

We perform research in the field of cryptocurrencies, a blockchain focused ventures and security tokens. Currently, our only investments in the crypto space is into cryptocurrency mining and public securities with exposure to crypto and blockchain.

We publish our thoughts on crypto on kunav.com.

Domain and Online Assets

We invest in and develop a portfolio of online assets. This includes domains as well as websites with SEO targeted content.

You can find more information about our online assets on eykol.com.

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Mezzanine debt for young growth companies

For a high growth company, selling equity can be very expensive. Why?

If a company is growing its profits by 100% annually, it will have grown its profit by a multiple of x32 by the end of year 5 (a 3,200% increase).

Accordingly, if the management of that company decided to raise equity at the beginning of year 1, they would need to sell at an earnings multiple of 320x the current year profit to sell at a 10x multiple of profits in year 5.

Not many venture companies manage to do that and are forced to raise capital at lower multiples. If their growth projections then become reality, the equity raise will turn out to have been very expensive for the sellers.
Enter Mezzanine Financing Mezzanine capital is hybrid financing that consists of both debt and equity exposure, that gives the lender the right to convert to an equity interest in the company at a predetermined exchange rate. Because the investor is entering with debt, his downside is better protected. As such, the investor is also…