Posts Tagged ‘money’

Framing Your Ideal Investor

Monday, February 27th, 2017

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“We need more investors, can you help?” is a request I hear daily from entrepreneurs and executives, co-investors and seasoned corporate finance experts. The obvious response is “yes, maybe or no”. Sometimes the obvious is not the most helpful to gain control of the conversation and kick start movement. Let’s frame the real “need”. Remove the irrelevant, focus on the relevant information. You will get dramatically quicker towards your goal.

  1. You’ve asked for capital raising assistance. Are you talking about your ability to attract follow-on investments from your current investors, new investments from your current investors, new investors for your current businesses or new investors for new businesses? What is it exactly?
  2. Then, I am curious where is your current marketing time and money being deployed? Is it being directed to all investors, or those within a specific geography, deal size, stage, investor type? There are 5 generic types of investor for you. Those that are apathetic, pretenders, aspirants, serial developers and leading-edge investors. The first three make up the majority of your audience and are the most price-sensitive, the final two are highly value-driven. Who exactly are you currently talking to? Would you recognise the differences (past relationships, capabilities, substance, style etc)? Let’s agree who you should be talking to?
  3. Then, what are the existing or anticipated needs or needs that you can create for your ideal investors that you are uniquely able to address? How is your investor better off or personally better supported after realising their investment with your help? (Financial, intellectual, social, cultural improvements)
  4. Then, who ideally has a need now or one that could be readily developed for that “return” on their investment? Who has the means and authority to approve the investment? Who can move quickly? Who is not overly prescriptive about the your “past”?
  5. How do you best reach those investors and they you? (referrals, networking, publishing, speaking, awards, media interviews etc)
  6. How do you create the ideal conditions? (eager to meet you, strong word-of-mouth)
  7. How do you create the ideal time? (no disruptions, no delays)
  8. How do you create the ideal location? (neutral, zero distractions)
  9. How do you create the strongest first impression? (impressive content, credibility, rapport)
  10. What competitive, distinctive or leading-edge offerings do you have to draw them in as a current or a future investor? (increasing investment, intimacy)
  11. Are there gaps where you need to add new offerings or to create greater differentiation (value) between existing investor offerings?
  12. What have you jointly agreed to do next? (exchange information, call, meeting)

You can see quickly here that framing your investor question, creates a dramatically sharper point on your arrow.

 

© James Berkeley 2017. 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.

RPM I: My Best Laid Plans Are Screwed

Friday, April 1st, 2016

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I recently talked about the organisational dynamics and consequences of Resilient Growth in the value creation process for large and small businesses.

Resilient Growth

Behind resilient organisations lies resilient people. People with the skills, expertise and behaviour at all levels to thrive not just survive on the firm’s profitable growth journey. To maintain and increase the profitable growth momentum in the organisation. Think of this as keeping the “rev” counter high.

Knowing “how” their behaviour accelerates or destroys profitable growth is important but maintaining the right mindset and knowing the right questions to ask is the difference between someone telling you what route to fly and actually co-piloting the plane with you. Huge!

Starting today in a new series, titled Resilient People & Momentum (“RPM”), here are my observations from over 450 clients around the world over the past 25 years in very common situations, where I have had a ringside seat.

Situational Overview: The New Market Entry Strategy Has Gone AWOL – your best laid plans aren’t working in the real world. The assumptions made about the market size, demand, relationships, marketing impact, acquisition costs, ease of delivery and available resources are miles off in reality. Executive management, investors and employees are fretting madly or indeed, clamouring for your blood. Cut and run, retire graciously or come out fighting?

Resilient People & Momentum Mindset: You are a prudent risk taker. You have a track record of past success honed by past wins and losses. You live for ambiguity. This is your time to shine. Failure is not about you personally. No one is firing at you. You have tremendous value and results to provide to others in future. You can work it out with others help given their support, time and resource.

Resilient People & Momentum Questions: Your first and most important assessment is with yourself 

  1. Is there a visible outcome (result and value) that is good for my key constituents?
  2. Is there an alternative allowing for speed and the quality of the outcome that I can immediately call on or develop (good news: unless the car has crashed there is always an option)?
  3. What are the attendant benefits and risks (after preventative and contingent actions are put in place)?
  4. What is the best course of action for all parties (accepting that you are looking for a compromise that preserves everyone’s critical and highly prized issues but dispenses with the moderate and low-level stuff)?

Liked this? Daily bursts of resilience advice to follow on this blog. Please come and read, share your experiences and comment. If you prefer, a quick confidential “free” debrief, write to me at james@elliceconsulting.com

© James Berkeley 2015. All Rights Reserved.