Posts Tagged ‘self-worth’

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.

Interview With Me: Forbes

Wednesday, October 25th, 2017

In a recent interview with Forbes contributor,  Chris Cancialosi, James touches upon the often hidden price of entrepreneurship, the mental consequences and self-worth issues that bedevil even the most seasoned entrepreneurs, irrespective of the business size.

The Quiet Price of Entrepreneurship

https://www.forbes.com/sites/chriscancialosi/2017/10/18/the-quiet-price-of-entrepreneurship/

© James Berkeley 2017. All Rights Reserved.

Acending To The Top Step

Monday, October 17th, 2016

 

gray-concrete-stairs-picjumbo-com

 

Why do so many people consciously ignore the biggest risk to getting the business or opportunity, the absence of a peer-level trusting relationship with the individual(s), whose power and influence can scupper their ability to meet their client’s objectives? If the risk is obvious, why don’t they address it BEFORE they bid for the business or seek the opportunity. Do we have an attitude deficit (we are not a peer of those people or our immediate mid-level buyer won’t let us near them) or a skills deficit (intellectual firepower, use of language, comfort in a corporate strategic discussion and so forth)?

My experience is that the procrastination says more about how the individual views themselves (self-worth, value, scarcity) and less about the reality of the situation that they are faced with. If you are not willing to invest the time, skills and resources to address the risk (establish a peer-level trusting relationship) in advance, you are probably not “worthy” of the business or opportunity in future. Harsh but true?

© James Berkeley 2016. All Rights Reserved.

 

Illusionary Growth Plans

Wednesday, January 6th, 2016

I remember a middle ranking executive of a US$3 billion US multinational approaching me for help in articulating his growth plans for the Latin America region. “You consultants are experts at wow presentations. I need to impress my boss”. After a little bit of further digging he wanted me to take his strands of thought, apply some magic and craft them into a meaningful growth strategy presentation with his name on it. In so doing create an illusion that he was the master of his own destiny.

There is a point at which consultants hide their ego and help clients. When they do, I believe ethically it needs to be with appropriate attribution. “Oh no, he’ll see it is not my ideas!”

I find with many executives they want the glory without the risk.

They fear being exposed sometimes rightly, as an imposter.

They fear that visibly paying for help will be seen in the organisation as a sign of weakness rather than strength. As if it is right to use scare resources to hire a consultant but not admit they helped.

They fear that presenting ideas that are not their own will diminish their own credibility amongst their peers.

They fear themselves. They don’t trust their own judgement when they look in the mirror.

When you walk into a meeting dangling your ego and constantly seek validation from others, this is what happens.

When your mindset is that there are others smarter than me. I would be wise to seek their input. I am confident defending the reasons for hiring them. The shared wisdom when applied to key organisational issues will help all of us dramatically accelerate the speed and probability of meeting or exceeding our goals, it is easy to move forward.

There is enough set backs in profitably growing a business to humble all of us but if we don’t take stock of our own mindset and self-talk, we are deluding ourselves that we will be successful.