Posts Tagged ‘attracting investors’

The Investor Casting Couch

Wednesday, March 22nd, 2017

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“The Investor Casting Couch”: a mindset that says we are best served at our first meeting, acting cagey, and getting the other party (co-investor, adviser or entrepreneur) to reveal themselves to us first to protect our own self-interest, at all costs. In extreme cases, we must do as little as possible to reveal our own past, ideas or intellectual property.

Reality: Your actions merely serve to show that you have close to zero interest in building a trusting peer-level relationship, collegiality or collaborating in anything other than constant “fear” (stolen IP or contacts). You might, of course, be right on the odd occasion when you have a rogue across the boardroom table. However, 9 times out of 10 assuming that you have done your due diligence properly, you are merely revealing the depth and breath of your own insecurities. Why would you create that first impression? In the misplaced belief, it projects your superiority when all it does is project your stupidity. Why would anyone, except the desperate, choose to spend a millisecond further in your company?

I see this mindset widely adopted by experienced bankers, corporate financiers, private equity and venture capital professionals to the point of huge irritation. They have been a success in their career but they refuse to act like a success. Stop, in the name of common sense!

© James Berkeley 2017. All Rights Reserved.

 

 

Why Should They Care?

Thursday, January 19th, 2017

I hate being “pitched” ideas, it immediately feels like my interests (building a trusting relationship) are being subordinated to advance your interests (line your pockets). Yet we all need to attract ideal customers or investors with a memorable description of our impressive value. How else can they recall when they need your product, service or proposed investment? You need a clear crisp 1 or 2 sentence statement. It needs to embrace:

  • Legitimate immediate value
  • Impressive results from its’ application and use
  • Improved performance, not problem solving
  • Your target audience’s aspirations
  • It needs to be specific, not too general

It is not about your approach, technology or ideas. Nor is it a sales tag line.

“We have created a platform to resolve the shortcomings of wealth managers, who put their interests before their customers” is interesting but it tells me little about what is really in it for me.

Contrast this with “We dramatically improve HNW investors’ performance, security and peace of mind in complex and ambiguous situations”, which begs the immediate question “great, tell me what would you suggest in this situation?” You have given the other party a reason to care about you (their self-interest), to immediately delve into a pragmatic not conceptual discussion and to recommend you to others.

© James Berkeley 2017. All Rights Reserved.

 

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.

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.

 

Just An Illusion

Thursday, March 24th, 2016

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Is this a shot from your evening last night, soon to be posted on your instaGLAM account? Today a great many executives, managers, investors and board members are busy trying to be someone that they are not. Fact. They are instantly recognisable by the disparity between the image that they project and what others see.

At a small intimate event last night in London with David Nish, the past CEO of Standard Life and this week appointed as a Non-Executive Director at  HSBC, we discussed the dynamics and consequences of this behaviour.

The dynamics and behaviour are largely the same in businesses of every size. Individuals are prone to projecting views without hard evidence or strong anecdotal information (shout loudest). They are poor listeners (routinely ignore vital feedback). They lack sufficient self-worth in their own talent and judgement (resort to bolstering their credentials with references to famous names). They have a poor level of self-esteem (they are dismissive of others success). They are prone to passive aggressive behaviour to project superiority (constant one-upmanship). They are prone to excessive exaggeration or downright lies about their own success (false claims in bios, CV’s/Resumes). We’ve all met them at various points in our career.

The consequences differ based on the size, priorities and complexity of the organisation. Here are some observations from my own experiences:

An inability to effect a management buyout of a small or family business, where the Founder’s behaviour results in management never acquiring the skills, traits or expertise to run the business in his or her absence.

A loss of respect for a private investor’s judgement amongst their peers and future co-investment opportunities when they make wild, unfounded claims to be invested in the “next unicorn“. Ridiculous, of course but sadly all too often true.

Raging management distrust in the Board when a non-executive director relays unsubstantiated “insider” claims from a key client, institutional investor or employees about the manager’s negative performance without hard evidence or strong anecdotal information.

A destruction of goodwill amongst analysts and the media when the newly appointed CEO of an investment bank, self-invested with “superman” powers, promises near instant changes to the business model that his predecessors have taken decades to create.

The world is littered with people trying to be someone that they are not. Facebook, Instagram and Twitter couldn’t survive if that human need dissipated. We all have a reputation that precedes us in the hyper-connected world we live in. Reinvention, acquiring new skills and educating others is something that we must constantly commit to but without absolute credibility (tangible results and visible behaviour), it is just an illusion.

© James Berkeley 2016. All Rights Reserved.

The Perils of Hazy Horizons

Tuesday, March 8th, 2016

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One of the senior politicians in the Brexit debate urged voters on British television last night to give serious thought to the type of country and life they want to have in 40 years time. Predicting what will happen in 3 years time, as anyone sitting in the executive office of a global bank in 2004 will attest to is fraught with huge inaccuracies and serious consequences! The pace of change has never been as dramatic (technology, capital, supply of talent, societal changes and so forth).

The art of management is to balance short and long-term profitable growth and make informed decisions about the health and well-being of the organisation. To effect change successfully and bring employees with them, mid-level managers in particular need to understand how they must adjust their own behaviours and actions in highly ambiguous situations.

To make serious predictions about the long-term and to put the risks and benefits and action in the appropriate context anything more than a 5-7 year horizon is really an intellectual not a commercial debate. Even in government funded infrastructure projects and macro inter-governmental policy initiatives (climate change, energy, healthcare, education and so forth). That is why I smile when I see organisations such as Lloyd’s of London’s (2026 Vision) and other global organisations expecting that their best laid plans will be taken seriously by their key constituents. It is a collection of predictions, which the forecasters will never be held accountable for and those asked to implement it struggle to grasp what it really means for them or their colleagues.  Fact.

Let’s get back to pragmatic outcomes, alternatives, assessment of benefits/risks, timing and action within the proposed investment parameters.

© James Berkeley 2016. All Rights Reserved.

Behind The First Meeting: The Activist Investor Within

Thursday, February 18th, 2016

I detest the way the debate about activist investors and their motives has descended into a force for good or evil. It is corporate pantomime. A round of boos please after the activist has said their lines. Cheers and name calling after the “innocent” CEO or Board Chair rebuttal. AIG, Sothebys, P&G, Yahoo, and the list goes on. The myth is that the activist investor has an agenda and management and the Board don’t. Sparks fly at the first meeting because that is what the activist wants to see happen. This is rubbish and not supported by hard evidence in many situations. In a lively debate on CFO.com this week, titled, When The Activists Attack  here is a perspective I shared from my first hand experiences with businesses and management brought to book by activist investors:

When the Activists Attack

An Investor’s View: Attracting Intelligent Capital to Innovative Ideas

Thursday, February 11th, 2016

I am thrilled to announce that I have been asked to be a contributor to VC-List, the pre-eminent online source for advice on turning innovative ideas into billion dollar businesses from people, who have invested in, led and advised real businesses. Here is a link to the first article “Getting Started in Raising Venture Capital” drawn from my war stories, experiences and insight with over 75 businesses in North America, Latin America, Europe and Asia that have successfully attracted funding from corporate venture capital, traditional VCs, HNW investors and so forth at various stages of their journey:

Getting Started in Raising Venture Capital

 

 

Help I Need Somebody

Wednesday, January 20th, 2016

While my focus is on helping mid and large organisations with dramatic growth opportunities, I get asked by early-stage entrepreneurs for a “second opinion” on their business model from time to time. I am often bemused by these “soft” requests, as someone, who has been in the exact same stage of growth.

If you want help, by all means “ask” for it but do realise that there is a strategy and tactics to the request process.

“Strategy” in asking, what do I want to accomplish from applying the requested help? Is it a faster resolution of a past problem, validating a current decision or greater confidence in a future plan?

“Tactics” in the form of how do I get the fastest and best solution? Where external help is required how do I present the “ask” in a way that is mutually beneficial for all parties, not just me.

I come across many interesting entrepreneurs, who are clueless in these areas. Consequently, they buttonhole you at events, send “cold” investment presentations or feign interest in articles that you have published.

Can I make a suggestion? Be very transparent upfront about your intentions, find the warmest path to the “expert” and position the request in their self-interest.

I cannot guarantee, I or anyone else will give you our “free” time but you sure dramatically increase the odds in your favour.

Is that helpful advice?

© James Berkeley 2015. All Rights Reserved.

Resilient Growth

Monday, December 21st, 2015

Why do annual budget discussions reveal so little about the growth prospects of the business and so much about the fears of those running the business?

I have come to observe that more energy is exercised in the haggle and obfuscation between line managers and their direct reports than the value derived from the process.

Should we have objectives and goals? Absolutely.

Should we place greater emphasis on a set of tactical targets that in of itself are arbitrary (based on a “best guess”) or a set of broader strategic outcomes that more profoundly describe what we want the business to look like in 12 months time?

In many high growth, mid sized businesses, where the overriding imperative for the owners is to build equity or transition the business (divestment, IPO and so on) I think there is a compelling case for the latter. Yet that is very rarely the case. The business may have doubled or quadrupled in size but the management focus and discipline and rewards system is largely unchanged (tactical targets).

I come across a lot of strong and dynamic businesses who are in self-congratulatory mode.

Senior Manager: “We have met or exceeded our budget for the last 8 quarters.”

Me: “Great, what SHOULD you have achieved in the prevailing conditions?”

I am met typically by quiet silence or a “what do you mean” response.

My point here is are you really focused on what really matters to the Owners (building equity or preparing a transition)?

Here is a quick set of strategic outcomes, my best clients use to drive their business:

1. Sustained Sales and Profit Growth (over past 3 years).
2. Market-leading Sales & Marketing Processes (array of rainmakers, leverage high tech, increasing market gravity, abundant mindset, room to accelerate growth)
3. Compelling value proposition and market position. (impressive clarity internally and externally about how the firm’s ideal clients are better off or better supported after using the firm’s products and services)
4. High Quality Management & Employees (high level of familiarity, clarity and implementation skills, behaviour and expertise supporting these strategic outcomes)
5. Breakthrough Client Relationship Approaches (acquisition, innovation, retention, profitable growth)
6. Market-Dominating Fees & Value (zero aged debt, 50%+ fees “banked” next 6/12 months, balanced growth, low working capital needs)
7. Intellectual Property Institutionalised (proprietary IP copyrighted, constant creation, internal R&D “laboratory”, systematic approaches)
8. Tremendous Loyalty (seductive rapport with key people, impressive career growth, diverse and dynamic environment, aligned rewards and value creation)

Go back to your 2016 business plans and accountabilities for key managers.

Producing Results Are each of the requisite improvements in each area set in stone? Are there influential exemplars lined up to reinforce this behaviour daily (mid-management)? Is the frequency and quality of performance assessments appropriate?

Rewarding Results Does the rewards system appropriately support or hinder your future health and well-being (bonus, long term incentives, recognition, promotions and so forth)?

I strongly suspect many people will be shocked how loosely the wheels are bolted onto their bus and how susceptible their best laid growth plans are to unforeseen events. Waste no time, take action now if you want to increase your resilience.

© James Berkeley 2015. All Rights Reserved.