Start-ups seeking an investor

Investors seek returns that correspond to the risks they take. My job is to align the interests of investors and entrepreneurs.

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I insist that my clients treat investors as partners and not as donors. They must commit to sending meaningful progress reports to investors at appropriate intervals. Formalistic financial statements are not sufficient for this purpose.

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I try to help entrepreneurs build solid businesses that will be increasingly profitable for many years ahead. My target is for investors to receive, after five years or so, annual dividends greater than their original stake and increasing every year.

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Investors often provide precious advice but they should never try to manage a business from the side-lines.
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Minimize external financing

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I make every possible effort to avoid successive rounds of equity financing. My clients’ projects, once launched, can almost always finance rapid growth internally. The methodology is straightforward.

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• Invest only in the projects with high margins that can be maintained indefinitely.
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• Start as small as possible.
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• Test everything, or almost everything, in a pilot market.
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• Take as much time as needed to learn what works and what does not.
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• Make the appropriate corrections as you learn.

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• Globalise quickly once a successful model takes shape.

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In practice this means balancing three principles.

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Take many small risks

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I like to test strategies in depth, but on the smallest possible scale. Mistakes are relatively cheap in a pilot market and one can learn quickly what works, what does not work and, most important, why.

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Maintain profitability

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Ongoing experiments to improve margins are the key to long-term success. My experience confirms this every time.

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Globalise intelligently

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Globalisation is the logical follow-up to success in a pilot market. The only real obstacles to globalisation for a young company are psychological.

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I help my clients find key people in other countries as required. The problems of adaptation to a global marketplace are grossly exaggerated – especially by high-street bankers and accountants who have worked all their lives in a purely national environment.

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To be informed of new opportunities as they emerge, click on Contact me and let me know what you are seeking.

 

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