Not every business with potential is ready for growth acceleration. Not every growing business makes a good investment. At Hathwell, we developed the PRIME framework to systematically identify businesses—whether profitable or high-potential pre-revenue ventures—that can genuinely benefit from professional transformation AND deliver strong returns for investors.
Why We Built PRIME
In our early days, we made mistakes. We engaged with businesses that looked promising on paper but lacked fundamental readiness for transformation. We realized we needed a systematic filter—one that would help us:
- Avoid wasting resources on businesses unlikely to succeed
- Identify the characteristics that predict transformation success
- Communicate clearly with investors about why we selected specific opportunities
- Maintain quality standards as we scaled our operations
PRIME emerged from analyzing patterns across dozens of business engagements, distilling what separated successful transformations from disappointing ones.
The PRIME Framework Explained
Potential
What we look for: Businesses with demonstrable value—either through proven profitability OR validated high-potential models with strong fundamentals and clear path to scale.
Why it matters: We evaluate businesses on their potential to deliver strong returns. For established businesses, this means profitability and track record. For early-stage ventures, this means validated product-market fit, unique competitive advantages, and exceptional founding teams.
Key Criteria
- For established businesses: Consistent profitability with proven business model
- For high-potential ventures: Validated market opportunity with unique advantages (like House of Waterproofing's exclusive manufacturing partnership)
- Clear value proposition that customers are willing to pay for
- Defensible competitive moat or first-mover advantage
- Realistic path to profitability and scale
Ready
What we look for: Businesses operating in India with established market presence and demonstrated growth ambition.
Why it matters: Our value lies in our network, on-ground presence, and market expertise across India. We're most effective when helping businesses that have established themselves and are ready to scale.
Key Criteria
- Operating presence in India with established customer base
- Clear growth ambition and openness to change
- Willingness to implement professional systems
- Readiness for external investment and governance
- Founders committed to scaling (not exiting)
Industry Potential
What we look for: Businesses operating in sectors with favorable tailwinds—growing markets, improving unit economics, or consolidation opportunities.
Why it matters: Even the best management team struggles in a declining industry. We want businesses riding favorable macro trends, where growth efforts are amplified by market tailwinds.
Key Criteria
- Industry growing at or above GDP growth rate
- Favorable regulatory environment or trends
- Opportunity for professionalization/consolidation
- No significant technological disruption risk
- Sustainable competitive dynamics
Management Quality
What we look for: Founders and management teams with integrity, capability, and coachability—people we trust and want to partner with.
Why it matters: Ultimately, we're investing in people. The best business model fails with poor execution, and management quality determines execution quality.
Key Criteria
- Demonstrated integrity and transparency
- Track record of navigating challenges
- Openness to feedback and external input
- Clear vision for the business
- Ability to attract and retain talent
- Willingness to delegate and build teams
Expansion Capability
What we look for: Businesses with clear, realistic paths to 2-3x growth—not theoretical possibilities, but actionable expansion opportunities.
Why it matters: Our investors expect growth. We need businesses where we can identify specific, achievable growth levers that our support can help activate.
Key Criteria
- Identified growth levers (geographic expansion, new products, customer segments)
- Addressable market significantly larger than current revenue
- Unit economics that improve with scale
- Operational capacity to handle growth
- Capital as a genuine constraint (growth limited by resources, not opportunity)
How We Apply PRIME
PRIME isn't a simple checklist—it's a framework for investigation and discussion. Here's how we use it:
Stage 1: Initial Screening
When we first encounter a business (through our network, referrals, or outreach), we conduct a quick PRIME assessment based on publicly available information and initial conversations. This screens out obvious mismatches.
Stage 2: Deep Dive Assessment
For businesses that pass initial screening, we conduct detailed evaluation across each PRIME dimension. This involves financial analysis, management meetings, site visits, and reference checks.
Stage 3: Investment Committee
Our investment committee evaluates the full PRIME assessment, debates concerns, and decides whether to proceed. No business is perfect—the discussion focuses on which weaknesses are addressable and which are dealbreakers.
Stage 4: Ongoing Monitoring
Post-investment, PRIME provides a framework for ongoing assessment. We track whether initial assumptions are proving true and whether management is executing on identified growth levers.
Red Flags That Override PRIME
Some issues are automatic disqualifiers, regardless of strength on other dimensions:
Automatic Disqualifiers
- Integrity concerns: Any indication of financial irregularities, tax evasion, or ethical issues
- Litigation risk: Significant pending litigation that could impair the business
- Concentration risk: Over 50% revenue from a single customer without diversification path
- Regulatory risk: Business model dependent on regulatory gaps likely to close
- Founder conflict: Unresolved disputes among founders or key stakeholders
PRIME in Practice: A Case Example
To illustrate how PRIME works, consider a recent evaluation:
Business: A specialty chemicals manufacturer serving the construction industry
PRIME Assessment Summary
- P - Potential: ✓ 12% EBITDA margins, profitable for 5+ years, ₹18 crore revenue
- R - Ready: ✓ Strong presence in 3 states, founder actively seeking growth capital
- I - Industry: ✓ Construction chemicals market growing 15%+ annually with consolidation opportunity
- M - Management: ✓ Technical founder with integrity, coachable, building second-tier management
- E - Expansion: ✓ Clear path through geographic expansion and product line extension
Result: Proceeded to detailed due diligence
For comparison, here's how we evaluated House of Waterproofing, a pre-revenue opportunity:
PRIME Assessment: Pre-Revenue Example
- P - Potential: ✓ Cash-positive model from day one, exclusive manufacturing partnership, unreplicable unit economics
- R - Ready: ✓ Clear market opportunity in ₹17,000 Cr market, 95% unorganized
- I - Industry: ✓ Waterproofing market growing 8%+ annually with zero national brands
- M - Management: ✓ Experienced founder with industry knowledge and strong BNI network
- E - Expansion: ✓ Technology-driven model enables rapid geographic scaling
Result: Listed as Hathwell Verified Opportunity
For Investors: What PRIME Means for You
When you see a Hathwell investment opportunity, you know it has passed through the PRIME filter. This means:
- The business has demonstrated potential—through profitability OR validated high-potential model
- Management has been vetted for integrity and capability
- Growth opportunities are specific and actionable, not theoretical
- Industry dynamics support the growth thesis
- We believe in the opportunity enough to commit our own resources to supporting it
PRIME doesn't guarantee success—no framework can. But it ensures disciplined selection and gives you confidence that opportunities have been rigorously evaluated before reaching you.
See PRIME in Action
Explore our current investment opportunities, each evaluated through our rigorous PRIME framework.
View Opportunities