Who is the Riverside Micro-Cap Fund?
The Riverside Micro-Cap Fund, known as RMCF, is the smallest-company buyout strategy inside The Riverside Company, a global private equity firm led by co-CEOs Bela Szigethy and Stewart Kohl from dual headquarters in New York and Cleveland.
RMCF has invested since 2005 and is run by Managing Partner Loren Schlachet. The strategy makes control buyouts of fast-growing North American companies with up to $10 million of EBITDA, which is the segment where most founder-owned software companies sit.
RMCF invests from closed-end funds, not a permanent balance sheet. Riverside Micro-Cap Fund VI closed at $1.872 billion in March 2023, about 50 percent larger than the prior fund. A closed-end fund must return capital on a schedule, so RMCF underwrites every purchase to a target return, and entry price is the variable the firm works hardest to control.
| Fund | Final close | Size | Public source |
|---|---|---|---|
| Riverside Micro-Cap Fund IV | 2016 | $650 million (hard cap) | FinSMEs, September 2016 |
| Riverside Micro-Cap Fund V | 2018 | $1.2 billion (hard cap) | Pensions and Investments, August 2018 |
| Riverside Micro-Cap Fund VI | March 2023 | $1.872 billion | Riverside announcement, March 2023 |
What does Riverside Micro-Cap buy?
Riverside Micro-Cap buys control of North American companies with less than $10 million of EBITDA, and software and IT is one of seven industry groups Riverside names publicly.
| Criterion | RMCF stated criteria | Source |
|---|---|---|
| EBITDA | Under $10 million | Riverside investment criteria page |
| Geography | North America | Riverside investment criteria page |
| Deal type | Control platform buyouts plus add-on acquisitions for existing platforms | Riverside investment criteria page |
| Sectors | Business services, consumer brands, education and training, franchisors, healthcare, software and IT, specialty manufacturing and distribution | Riverside private equity page |
| Growth profile | Fast-growing companies | RMCF VI close announcement |
| Enterprise value context | Riverside overall considers under $1 million to over $400 million | Riverside investment criteria page |
An approach can also come from a different Riverside product. Riverside Acceleration Capital makes non-control growth investments in software companies with $3 million to $15 million of recurring revenue. A founder should ask which Riverside fund is calling, because a control buyout and a minority growth check are different transactions with different pricing logic.
What has Riverside Micro-Cap actually acquired?
Riverside announces micro-cap transactions by press release and did not disclose financial terms in any of the recent deals below.
| Company | Date | What it does | Role | Terms |
|---|---|---|---|---|
| Kaseware | April 2024 | Cloud investigation management software for public safety agencies and corporations | RMCF platform | Not disclosed |
| LANstar | August 2023 | Managed IT and phone system services, Phoenix area | Add-on to ProVelocity and IronEdge | Not disclosed |
| LightHouse Business Information Solutions | June 2023 | Outsourced IT services, New Mexico and the Midwest | Add-on to ProVelocity and IronEdge | Not disclosed |
| Augusoft | January 2022 | SaaS enrollment management for continuing education programs | Add-on to Modern Campus, the platform’s fifth acquisition in twelve months | Not disclosed |
Riverside reported 83 RMCF platform investments and 191 add-on acquisitions between 2005 and March 2023, with 43 exits completed. Add-ons outnumber platforms better than two to one in that record. The distinction is not cosmetic, because platform companies and add-on companies clear different prices.
What does Riverside Micro-Cap typically pay?
Riverside does not publish purchase multiples, and every recent RMCF deal Windsor Drake reviewed for this page closed on undisclosed terms.
Windsor Drake’s published valuation research puts private equity platform acquisitions of SaaS companies at 4 to 6 times revenue and add-on acquisitions at 3 to 5 times revenue. The same research finds strategic acquirers pay 15 to 30 percent premiums over financial buyers. RMCF is a financial buyer that prices to an underwritten return, not to strategic synergies.
The platform-versus-add-on label is therefore the first pricing question in any Riverside conversation. A software company that Riverside frames as an add-on to an existing platform starts from a lower multiple band than the same company positioned as a new platform.
What remains unknown publicly includes RMCF’s actual entry multiples, debt levels, rollover expectations, and earnout usage. A founder should treat any verbal number from a Riverside originator as an opening position, not a market price.
How does Riverside Micro-Cap find companies?
Riverside sources deals through M&A intermediaries and through direct outreach to founders, and the firm advertises both channels. The Riverside website maintains a section written for intermediaries that publishes each fund’s criteria, which is an open invitation for bankers to bring deals.
The volume arithmetic shows how industrialized the model is. RMCF closed 274 platform and add-on transactions in roughly 18 years, an average of about 15 per year. A team transacting at that pace negotiates with founders every month. Most founders negotiate a sale once.
A direct call or email from a Riverside originator is routine coverage of the sub-$10 million EBITDA market, not evidence that a company was singled out. Windsor Drake’s guide on what to do when you receive an acquisition offer covers the first moves after an approach.
What does a Riverside approach look like?
A serial acquirer approach follows a standard sequence: an originator introduction, a management call, a financial data request, then an indication of interest or letter of intent. Riverside is a professionalized buyer, so founders should expect the sequence to move quickly and to feel friendly at every step.
Standard letter of intent conventions apply. Acquirers ask for 30 to 90 days of exclusivity, and Windsor Drake recommends conceding no more than 30 to 45 days. Roughly 1 in 3 signed LOIs fails to close on the original terms, so a pre-LOI price is only as good as the diligence that follows it.
The information asymmetry is the real risk. Riverside knows current market pricing for sub-$10 million EBITDA software companies from constant deal flow, and the founder does not. Windsor Drake’s guide on whether you need a banker covers how to close that gap before sharing financials.
What is life like after selling to Riverside?
Riverside describes its model as process-oriented and hands-on, with operating professionals, including former CEOs, deployed into portfolio companies. Stated growth work includes new product development, market and channel expansion, international growth, and add-on acquisitions.
Buy-and-build is the default plan. The ProVelocity and IronEdge platform completed two IT services add-ons in a three-month window in 2023, LightHouse in June and LANstar in August. A founder who sells a platform to RMCF should expect to spend the hold period acquiring. A founder who sells as an add-on should expect integration into a larger company.
Public first-person founder accounts of life inside RMCF portfolio companies are scarce. Windsor Drake has not verified independent founder testimony for this page.
Who else competes with Riverside Micro-Cap for software companies?
A sub-$10 million EBITDA software company that fits RMCF also fits a specific set of rival buyers. Serial software consolidators such as Volaris and Valsoft buy in the same size range with permanent-hold models. Serent Capital competes for capital-efficient B2B software platforms. Growth investors such as Frontier Growth compete when the founder wants partial liquidity rather than a full sale. ESW Capital buys mature enterprise software in adjacent situations.
What would a competitive process change?
Windsor Drake calls the gap between what a serial acquirer pays in an unbanked bilateral negotiation and what the same business clears in a competitive process The Proprietary Discount. Windsor Drake’s client work puts that gap at 15 to 25 percent of enterprise value.
RMCF’s model depends on sourcing at attractive prices, and undisclosed terms keep every founder negotiating without benchmarks. A structured process that opens with a buyer universe of 150 to 300 potential acquirers replaces Riverside’s opening number with a market-cleared one. Riverside can still win that process. The difference is the price at which Riverside wins.
Founders holding a live Riverside approach can use Windsor Drake’s Approach Response engagement to run that market check in 4 to 6 months while keeping the current conversation alive.
Questions founders ask
Does Riverside Micro-Cap buy software companies?
Yes. Software and IT is one of seven industry groups Riverside names for its private equity funds. Recent RMCF activity includes the Kaseware investigation software platform in April 2024 and multiple managed IT services add-ons in 2023.
What size company does Riverside Micro-Cap buy?
RMCF targets North American companies with under $10 million of EBITDA. The Riverside Company as a whole considers enterprise values from under $1 million to over $400 million across its fund families.
How much did Riverside pay in its recent micro-cap deals?
Riverside did not disclose terms for Kaseware, LANstar, LightHouse, or Augusoft. Undisclosed pricing is standard practice for Riverside, which means founders have no public benchmark and must create price discovery through competition.
Is my company a platform or an add-on for Riverside?
The label moves the price. Windsor Drake’s published valuation research puts PE platform acquisitions of SaaS at 4 to 6 times revenue and add-on acquisitions at 3 to 5 times revenue. A founder should ask Riverside directly which role the deal team has in mind.
Will Riverside walk away if I hire a banker?
Riverside publishes its investment criteria for intermediaries and takes banked deals routinely. A buyer that works with M&A advisors as a matter of course does not abandon a company it wants because the founder hired one.
How active is Riverside Micro-Cap as a buyer?
Riverside reported 83 RMCF platform investments, 191 add-on acquisitions, and 43 exits between 2005 and March 2023, an average of roughly 15 transactions per year across the strategy.
Is a Riverside offer a good price?
A Riverside offer is one buyer’s opening number. Windsor Drake’s client work puts the gap between an unbanked bilateral price and a competitive-process price at 15 to 25 percent of enterprise value, so the offer should be tested against the market before acceptance.
Last reviewed July 28, 2026 by Jeff Barrington, Founder and Managing Director, Windsor Drake. Content on this page may be cited with attribution and a link to https://windsordrake.com/acquirers/riverside-micro-cap/