Archive for May, 2016

What Is Your Story

Tuesday, May 31st, 2016

 

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Every week I get smart, intelligent entrepreneurs coming to me for “help” with strategy and tactics to grow their business, raise capital, partner or even exit. I decline the overwhelming majority not because they don’t have a smart proposition but because I don’t have confidence that they can create and communicate a compelling story.

If they cannot convince me that they can get over the line, why would I invest my time and energy in convincing others? Of course, there are people I overlook who go on to prove me wrong.

The problem I find is that Founders, who may have been hugely successful in a big organisation or a different environment automatically assume their past performance and credibility confers a compelling story to others. Much as the celebrity dropping the “do you know who I am” line at the overbooked airline desk or the nightclub hostess. It rarely works.

It is about today’s story, today’s investment decision, and today’s health of your business.

Who are you today? What do you actually represent to a high potential investor, buyer or partner? How are they better off or personally better supported in investing in your success?

Knowing the answers to those questions doesn’t confer success but it sure gets your head and story into the appropriate context.

© James Berkeley 2016. All Rights Reserved.

It Is Not About You

Friday, May 20th, 2016

How many times do you attend a business conference or event, where the moderator or interviewer insists on hijacking the microphone? I am sorry it is not about YOU. We are here to listen to the guest speakers, panellists and interviewees. You are there to ask interesting and provocative questions and keep the conversation moving forward. You are not the star. If you insist on being so and if you are incapable of parking your ego, please don’t expect your audience to stay in their seats. If the event host blindly ignores your approach for their own commercial reasons or an unwillingness to confront your lousy behaviour, remember attendees have the ultimate sanction, they won’t show up next time.

© James Berkeley 2016. All Rights Reserved.

Learning About Money

Wednesday, May 18th, 2016

 

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Where did you learn about money?

This might sound odd to my “foreign” readers in perhaps US, Canada and Australia but I cannot ever remember a conversation with a parent or indeed, a child, who had a formal personal finance “lesson” or training. Yes, they received informal advice about earning, preserving and spending money but not much more. Yet when you think about the life skills that have got us to where we are today and where we probably need to get to tomorrow and the day after, personal finance must rank pretty close to sex education and the hidden dangers of using social media.

  • What common sense advice would you pass onto your son and daughter?
  • Where would you suggest they go for trusted advice?
  • When should they start learning about the prudent use of money?
  • Why is it important at that particular stage of their life?
  • How do you ensure that they never repeat the same mistake twice or an earlier generation’s foible with money?

I thought about my own experiences. There was very little explicit advice about three pools of money: cash, credit and investment. I learned “on the job” through teenage years from the pocket money days, to work experience and part-time jobs in the student days. Thereafter in the early years of my career, it was mostly friends talking about what they were choosing to invest in or acquire. Some friends were inculcated to save up to by a first home. Others, the entrepreneurs, serially invested in start ups and early stage businesses and the bankers pursued stocks and funds. The majority invested in having fun on a Thursday night, a weekend or a boys or girls trip.

There are five lessons about personal financial decision-making we should reflect on:

  1. The Power of Early Years Learning: What is most interesting, is how so many friends of my age group’s beliefs about wealth and personal financial freedom were formed at a very early point in their lives. A great many of those beliefs still inform their behaviour today (saving, spending, preferred asset classes, self-confidence, risk appetite and so on). For example, the friends, who were immersed in buying a first home at all costs, have often led onto acquiring second and third homes or buy-to-let portfolios of residential property.
  2. Geographic Distinctions Narrowing: As a 24 year old, thrust into a group of middle class American college kids on a an insurance underwriting trainee programme in Minnesota, I vividly recall how self-confident and proficient they were in mastering substantial five figure college overdrafts. They had learned something I hadn’t although I was relieved not to have their problem, save for overextending myself on the purchase of a VW Golf. Yet even those distinctions are narrowing, as the cost of university education rises exponentially and kids in the UK leave with substantial debt burdens.
  3. Mindset Before Wealth: You can be rich or poor but your mindset is the “rudder” for your life and the personal choices that you make with your cash, credit and investment alternatives. You can adopt a mindset that there is abundant opportunity in life and I would be remiss in not pursuing it or you can adopt a poverty mindset, I must live in fear of the wolf stealing my wealth. Rarely is anyone taught about personal financial decisions in those terms.
  4. Learning From Our Omissions Trumps Our Failures: We applaud the great decisions we made with money and we beat ourselves up about the poor decisions but we rarely study why we omitted to spend, save or invest money on what turned out to be good investments. Coming to terms with the fears that inhibit clear thinking is fundamental to better decision-making. Wouldn’t our kids be better off if we took note and we passed those lessons on?
  5. Financial Technology Not A Nirvana: Technology is a huge boon to teaching kids today about their desired financial outcomes, alternatives, risk and rewards and selecting the best option in record time but it is not an exact science. Robo-advisers serve a purpose but there is an “art” to making smart personal financial decisions that is set in the answer to the question, “what is the life we want to lead?” and “how do we best adapt to those changing needs?” Only your kids can answer those questions.

Our kids in all likelihood may not turn out to be personal finance geniuses, nor can we motivate them to have an awareness of money. What we can do is create an environment where they are wiser than we were, where they learn not just from our successes and failures and where they learn to create an approach that works uniquely for them, not us.

© James Berkeley 2016. All Rights Reserved.

A Dumb Englishman Abroad

Monday, May 16th, 2016

Rick Stein, the international chef is currently airing an entertaining series on BBC television about long weekends in European cities – the food, the culture and the history. Stein is a great chef, I have eaten in a number of his restaurants and the creator of an impressive brand. He comes across as intellectually curious and a decent man but his mangling of the English and Austrian language in his latest show in Vienna, wouldn’t get him a job in Burger King.

If you want to be taken seriously on a public stage, on camera or at an international gathering or event, the minimum expectation is that you demonstrate a command of your own and your host’s language. If you want to use local terms or words to impress others, make sure you know how to pronounce them properly and in the right context. If you are in doubt about the latter, ask an informed local. Don’t wing it, you’ll look an amateur.

In Stein’s case with an expensive production and abundant researchers, it is just lazy film making or you can blame it on the irritating tendency at the BBC to dumb down programme making to the lowest common denominator. Either way, it makes the speaker look dumb. Why would you do that or allow others to create that impression?

© James Berkeley 2016. All Rights Reserved.

The Ideal High Net Worth Investor

Wednesday, May 11th, 2016

Direct investment levels from High Net Worth entrepreneurs and families are expected to outpace all other global capital sources upto 2020.

When we want private investors money are we thinking hard enough about the traits that define our ideal investor?

  • Has a need or can be helped to see a need easily for the investment opportunity
  • Has the means and authority to invest money
  • Has or could have an emotional and personal connection for making the investment (Critical with HNW, Family Offices & Entrepreneurs)
  • Has an intellectual (curiosity), social (impact) or cultural (shared values) motive to invest
  • Can act quickly
  • Focuses on value
  • Risk appetite aligned
  • Honest and open communicator (past successes and failures)
  • Track record of similar collaborations
  • Open-minded to the diverse past of the management team (credentials, age, accomplishments etc)
  • Peripheral benefits (credibility, rapport with other investors, peer networks, talent magnet, shared services and so on)

How many of these traits are you considering right now?

 

© James Berkeley 2016. All Rights Reserved.