Posts Tagged ‘capital’

UK’s Tech Gem

Friday, July 6th, 2018

I have just finished a week of speaking to Thai and Swiss fintech and insurtech delegations here in London. There is a marvel at the high tech “community” that the UK and in particular, London, has created, built and exploited globally. I am talking about a digital community experience where people interact frequently, are drawn together by the quality of the people “present”, acts as peers, reciprocate and in so doing, help everyone live a more fulfilling life. Entrepreneurs, investors, venture builders, advisers, large corporates and governmental organisations in harmony. It is incredibly difficult to create community, as this week’s visitors readily pointed out. It requires a strong brand, impressive new intellectual property, fearless promotion and new ideas.

Those who bemoan the waning global appeal of the UK in a post-Brexit world, might want to take note of Britain’s singular success.


© James Berkeley 2018. All Rights Reserved.


3 Deadly Sins First-Time Venture Capital Fund Managers Rarely Avoid

Wednesday, April 18th, 2018

Why do so many first-time venture capital fund managers, who have been a success in their past, cease to act like a success when raising their first fund? Undoubtedly, the fundraising journey is long, on average somewhere between 15 to 24 months for funds under $150 million from firing the gun until the final close. Nowhere is that harder for General Partners, who are new to the investment game and of limited interest to institutional money. Over the past 10 months, I have had first-hand experiences with 6 fund managers in US and Europe and talked to a multitude of placement agents, who have shared their experiences from over 120 such fundraises. Three deadly sins:

  1. General Partners underestimate the three pools of personal capital (cash, credit and investment) that they need to successfully arrive at their desired destination and thrive. They over invest in non-essentials (expensive office space, hiring employees), at the outset, and under invest in external expertise (fundraising, skills development) when they most need it, typically, in the tough grind that follows some immediate success  securing a cornerstone investor.
  2. General Partners underestimate the importance of maintaining a high level of self-worth. They allow a “poverty mindset” to quickly become their default position. They jump on the first offer of committed capital driven by a fear of failure, they beg for favours (introductions, expertise) on terms they’d never accept and they fail to act like a peer in front of investors (constantly “pitching” rather than investing appropriate time building a peer-level trusting relationship).
  3. General Partners underestimate the return on their time invested in accomplishing various activities along the “journey”. They spend excessive amounts of time “fine-tuning” their methodology at the expense of articulating the results and value the potential limited partner walks away with. They allow their intellectual curiosity and ego, to lead them into targeting investors, who are highly unlikely to commit, in their desired timeframe. Why? They consciously ignore who they are today (an ambitious first-time manager with an investment thesis yet to be proven, and zero successful exits) and they are overly pre-occupied with who they imagine themselves to be in future for ego reasons (the next Fred Wilson, Bill Gurley, Josh Kopelman).

The final thought: You might be a great investor but first, can you actually create and build a successful business (skills, behaviours, expertise)? I am not talking about a division of a large VC firm, a global bank, a management consulting firm or something you did on the side in university. I am talking about a boutique asset management business.  That is the first question your highest potential limited partners are trying to convince themselves about.

© James Berkeley 2018. All Rights Reserved.

Bring Something Meaningful

Wednesday, March 29th, 2017


I get approached at a minimum, by 3 people a week proposing some form of “collaboration”. Most commonly, other advisers, entrepreneurs, co-investors and bankers trying to access my investor or client communities and their capital, people or innovation. In most cases, they are decent people with a genuine request, who have been a success in their corporate careers. In their latest entrepreneurial incarnation, they have “capped” out their personal networks and/or they are unable to accomplish their goals without external assistance. Their “well” is running dry and they want me to share my water. They are largely offering symbolic (greater presence or a share of faux-success fees), not meaningful value (a powerful brand or actual cash).

I am a huge believer in collaboration as a powerful form of leverage. However, first, it needs to pass my litmus test:

  1. Combined, there is a scarcity and dramatically enhanced value that will significantly impact the speed and quality of my client acquisition prospects.
  2. There is an attractive short-term business opportunity of mutual interest (potential client, visible need with a strong fit and ease of implementation).
  3. I can and definitely want to help after considering prudent risk and potential reward.

I’d suggest I am not alone if you think about the quantum of conceptual collaborative discussions that you are presented with. Do you possess these simple questions, to reach a fast conclusion or do you allow multiple meetings and information exchanges to follow before reaching a conclusion?

Above all, is the other party bringing something meaningful? Yes or No.

Nothing more is required.

© James Berkeley 2017. All Rights Reserved.





What Is Your Story

Tuesday, May 31st, 2016










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 Perils of Hazy Horizons

Tuesday, March 8th, 2016









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.

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



Bedtime Profitable Growth Lessons

Tuesday, September 22nd, 2015

When I read bedtime stories to my daughter, there are tales of witches flying on broomsticks, young children wandering into the forest alone dark at night and absentminded Fathers getting soaked trying to repair the garden hose. At certain points she might say “I am scared”. When I ask what she is scared of, she responds, “I am scared of what is going to happen to “X” on the next page”.

Likewise we accept challenges in profitably growing businesses, knowing that there are circumstances under our control (the quality of our management, employees and the level of uncertainty within the business) and there are others that are not (competitive threats). What we know is that if we are to develop we must increase our learning. We learn by applying our past (expertise and experience) to transform our clients’ future. Our future is a function of our resilience to events outside our control and continuing to be of value to our clients (reinvest the lessons learned in new, faster, more impressive approaches).

Lesson #1: The art of management is the ability to balance the demands of key constituents for short and long-term profitable growth.

Lesson #2: Not all constituents (shareholders, board, employees, business partners and so on) are equal. Not all demands are equal (EBITDA growth, higher pay, happier clients). Behind every demand is an emotional imperative (improved image, enhanced peer recognition, a promotion) and a logical objective (lower acquisition overheads, optimum size of business, attracting word class talent). Dig for both, orient your management approach around both.

Lesson #3: “Speed” (climbing to the next level) is as important as “quality” (existing revenue generation).

Lesson #4: Success arises in the implementation of a strategy (arriving at the desired future state), not the formulation. Credit may be given to the latter but the glory goes to those, who accomplish the former. Lee Kwan Y

Lesson #5: You start by determining what your vision is and what is “mission probable”. There are a great many visions that are possible in the conceptual world but missions that are improbable (capital, people, innovation, implementation) in the real world. There are a small number of visions that are possible in the conceptual world and mission that are probable in the real world. Don’t kid yourself because you can point to one exception, who got lucky!

Lesson #6: If you are not failing, you are not trying hard enough. It is always odds against (less than 50%) predicting the future. The best management teams are probably successful no better than 1:3 with new product innovations or international expansions. What you must believe is that when you have success, the rewards are sufficiently large to cover the losses plus the ongoing costs of profitably growing the business (payroll, pension, capex, new hires etc.).

Litmus Test: Is there someone I can point to (highly similar sector and recent scenario) who has visibly travelled the same profitable growth journey as I am seeking to pursue? Are there lessons I can apply to accelerate the speed towards our immediate profitable growth (reducing labour intensity)? Are these lessons I can apply to enhance the quality of our profitable growth (repeat business, unsolicited referrals) such that moving to the next and the levels beyond that is sustainable?

If you cannot point to a real world example, it may well be for a very good reason. The path you have chosen is improbable or the timing has never made sense previously.

Of course, there are environmental changes (technology, access to capital, demographic, social) that make the previously improbable, probable. That is where the “unicorns” (AirB&B, Xiaomi, emerge from but they are the exception, not the rule.

© James Berkeley 2015. All Rights Reserved.

Bank Imbalance

Wednesday, July 8th, 2015

This morning the Board Chair of Barclays, the global bank, fired his CEO with analysts suggesting the speed of top line revenue growth, cost reduction and value creation has been underwhelming while acknowledging the progress the Bank has made in re-shaping its’ culture and shared values. The inference being that the bank has spent excessive time and resources on internal versus external issues. The point here is you have to do the following in  parallel, not sequential phases:

  1. Frame and commit resources to your strategic vision of the future
  2. Define and move swiftly through the strategy, tactics and execution towards your desired future state
  3. Define and make cultural changes to the firm’s operating beliefs, employee’s attitudes and their behaviour consistent with your new strategy and your desired future
  4. Allow for mid-course corrections to #2 and #3, where market assumptions and so forth change and need moderate or significant adaption
  5. Seek to exploit the results and value when you arrive at your desired future state (leverage and innovation).

Here is some key questions to ask in your own organisation and your clients:

  1. What proportion of management time, employees time and capital is being directed to internal issues versus external issues? Is that appropriate for the organisation at this stage of its’ growth strategy? If not, what needs to change?
  2. Does the firm’s leadership posses the skills and volition to make appropriate decisions rapidly and exemplify the desired beliefs consistent with the growth strategy? If not the leadership needs expert help to adapt or ultimately change those at the top.
  3. Is the business measuring what matters? Does it possess performance-based job descriptions and metrics for each individual throughout the organisation consistent with the growth strategy? If not, it needs immediate correction.
  4. Are they holding each other to account for accomplishment of key performance-based priorities? If not, starting with top management it needs to create or reinforce accountabilities down the line (carrots and sticks, monetary and non-monetary versions)
  5. Are they hiring, recognising and rewarding people for both the right behaviours and results consistent with the new growth strategy?  If not, it needs immediate adaption of the hiring, performance and rewards systems undertaken by line management not HR.

The banking sector is a poster child for excessive internal focus on compliance and costs. I sat at dinner last night with the regional head of a Top 10 global bank, who is accountable for protecting the bank from financial crimes and compliance breaches. He recounted his daily routine of corralling 12 CEOs of regional operating units, questioning their practices and where necessary forcing them to abandon clients, employees and products. What is obvious from the conversation is that in an effort to protect the bank’s bottom line there is a daily struggle to define “prudent risk taking”, to balance that with profitable growth and to use everyone’s time valuably. Isn’t that a skills set you would expect every banker to have learned at the start of their career?

The reality as Anthony Jenkins dismissal today shows is that those skills are in shorter supply than most imagined.

© James Berkeley 2015. All Rights Reserved.

7 Reasons To Celebrate London

Tuesday, July 7th, 2015

Today London remembers, 10 years on from the scenes of death and destruction. A city that I have called “home” on and off for 30 years. On 7th July 2005, I was at The Snow Ball in Queenstown, New Zealand with a group of friends when images flashed up on a video screen of the carnage across the city. It seemed distant and surreal in equal measure. What was the bombers’ point? The subsequent alert two weeks later and the manhunt when I was back home are a more vivid memory.

The test is what a city and its’ residents do about it.

Looking around London today, London is thriving. A global metropolis that has

  1. Attracted huge swathes of capital from across the globe.
  2. Unprecedented career opportunities for many people.
  3. The most diverse, talented and creative workforce with a global mindset.
  4. One of the most civilised, safe and secure environments to live, work and socialise in.
  5. The most compelling mix of contemporary culture.
  6. Retained its’ status as one of only two true “global cities” (the other being New York).
  7. The most exciting prospects for the next generation to grow up in.

As with all growing capitalist cities it faces distribution challenges. Adequate housing, infrastructure, health and education provision for all incomes.

The “high” security threat is a badge of honour, a reflection that those with incongruent values seek to cut down the tallest of poppies. We must hope that our security forces and intelligence are one step ahead of those who seek to destroy what we have. Can we be certain? Of course not. My memory flashes back to the early part of my career, the IRA atrocities across the city, the daily roadblocks outside my EC3 office and further afield to New York, where several of my former colleagues from my days working on 104th Floor of the World Trade Center perished.

Yet we celebrate the vibrant, innovative and exciting city we call “home” and the fantastic future it provides for our families, friends and colleagues.

© James Berkeley 2015. All Rights Reserved.

Are You Thinking What I Was Thinking V

Tuesday, March 24th, 2015
  • No one really knows when markets valuations are at a “peak”, most commentators and investors (Prem Watsa, Sir Michael Moritz and others) are merely applying “gut instinct” like the rest of us
  • After 7 years of “easy money” is it a surprise that we have record market prices (stocks, art and so on)
  • More people have lost money calling a market collapse than a market rise, be careful who you listen to
  • Well run businesses with strong “real” earnings and high quality management and employees will always outperform in the long-term those firms that lack those attributes
  • When retail and institutional investors have greater access to information and knowledge in real-time at less cost, why should tomorrow’s investment cycle follow yesterday’s cycle? We live in a different age.
  • With “real” unemployment and the growth of start ups in many G20 countries at near record levels, wouldn’t policymakers, politicians and media be better off talking more about our “future” prosperity than our “past” grievances
  • When I read polls suggesting  that electorates are more “disengaged” with politicians and their political parties than ever before doesn’t that tell us more about our own fears (education, self-improvement, reinvention)?
  • When you study empirical evidence, we are probably living in the most prosperous and safest decade in the past 100 years, why doesn’t it feel like that when I turn on the television news or pick up a newspaper
  • We are right to be concerned about the legacy we are leaving our children (underfunded entitlements, increasing complexity, wealth gaps) but we rarely reflect on how much wiser they will be than us (technology, health, education and other improvements)
  • We look too much at the rise of China, India and other high growth markets as a threat, when we should consider it as an opportunity
  • If you are well positioned (investor, business or employee) in healthcare, education, technology, travel and dare I say it in financial services, you are in sectors with 10 years of very strong growth
  • How many cases can you point to where great regulation has saved us from a downturn? Wouldn’t we better placed putting the onus on executives to show good judgement rather than leave it to our politicians and mandarins to tie them in knots?
  • We confuse largely “symbolic” action (an executive foregoing a bonus) all too often with “meaningful” improvements (smarter strategic decision-making, hiring better quality management and employees)
  • We “deify” celebrity leaders (Jack Welch, Sir Alex Ferguson, Sir Richard Branson) and often overstate the transfer value of their “unique” approaches. In other words their ideas were perfectly suited to the prevailing conditions in their environment but those same conditions rarely exist or in the same order in our own environment
  • Wouldn’t we better served by harnessing the power of “Big People” (an ability to apply knowledge more wisely) than “Big Data” (carving out granules of worthwhile data that must be formatted into meaningful information)?
  • In the hype around Uber, Lyft, Xiaomi and so on why are commentators, investors and analysts not asking more vociferously why so many multinationals failed to exploit these sources of innovation when they were in a far stronger position to do so? Is the boom in corporate venturing a recognition that management in many large multinationals have given up on finding hidden gems within their own business?
  • Twitter and other social media ads, why would they take precedence for a B2B business over boosting the number of peer referrals obtained from existing clients? Don’t get lost in the consumer hype.
  • When did your firm last buy from a cold caller? Wouldn’t those sending spam SMS, email and print flyers be better served attempting to forge a trusting relationship with real buyers? Perhaps they are not very bright.


© James Berkeley 2014. All Rights Reserved.