Green, Yellow, Red: What Signals Investors

What’s not often discussed is the soft side of a deal - the people, their behavior, and what it signals to potential investors. It’s impossible to do a good deal with bad people, which means the personalities, proclivities, and oddities play a large part in dealmaking. 

We’re fortunate to see a lot of opportunities, over 2500 just last year, and are constantly in conversation with executives. This affords us the ability to recognize patterns and develop specific criteria of behavior that provide insights into an owner’s motivations, and subsequent corporate culture. Here are some of the signals and how we interpret them. 

Compounding Knowledge and Returns: 2016 Year in Review

Read about the lessons we learned at throughout 2016 as we reviewed acquisition opportunities in the private markets, continued operating and investing in our portfolio companies, and tried not to screw up too often. 

Green Grass, Gratitude, And Things Being Hard

Anything worth doing is going to be hard. Let me repeat: no matter how simple, easy, or straightforward something appears to be, it will be difficult. In the beginning, it’s just not always obvious why.

Why We Love to Buy Boring Businesses

We’ve had the opportunity to evaluate and invest in all types of companies, including some “sexy” businesses — ones with high growth, brag-worthy products, or screw-the-rules teams with an average age of 25. While the “sexy” factor is never why we choose to invest, it can certainly be exciting. But the other end of the spectrum also attracts us; it contains what we call “boring businesses,” the almost invisible layer of the economy that hums under the radar, quietly supplying you with what you want and need.

Welcoming Shane Parrish

We’re excited to welcome Shane Parrish to the team. Shane is coming on as the Chief Operating Officer and Chief Technology Officer. He’ll be working with portfolio company leaders on ways to optimize and use technology more effectively, to improve our business processes, and to make acquisitions. 

4 Frustrating Initial Approaches of Investment Bankers

We’ve worked with investment bankers that, to put it frankly, have frustrated us to the point that we don’t want to pursue an opportunity — even a seemingly perfect fit — because the idea of continuing the process with them would require too much effort, patience, or both. Here are four approaches we’ve categorized from these frustrating encounters that we would like to offer up for consideration.

Portfolio Company Opportunity: Marketing Associate is seeking an ambitious full-time marketing associate to become part of an established portfolio company's new dedicated marketing department. We are seeking a candidate who has both a record in and passion for the intersection of marketing, analytics and sales outcomes, ultimately being motivated by turning a consumer into a customer, and a customer into an advocate.

The False Choice Between VC and Bootstrapping

There seem to be two basic camps in startup land, each talking their own book. The venture capital industrial complex churns out dazzling tales of lottery ticket winners — errr — I mean hard-working well-deservers, in hopes to inspire “go big, or go home” risk taking that fuels their system. Camp Bootstrapper is a curious mix of contrarians, jilted former high-fliers, and lifestyle advocates who profess to have “seen the light” and view investors mostly as vampires with checkbooks, prowling for naive, fresh meat.

Newsflash: as you already intuitively know, neither is close to accurate. In fact, both advocations prescribe situationally-dependent advice, rife with confirmation bias, which is almost never helpful.

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How to Sell Anything: An Introductory Guide

Regardless of your business, sales matter. Sales are your organization’s oxygen. They drive the resources that power the business and provide the opportunity for profits. Despite being so critical, sales often take a backseat to sexier topics.

While innovation, culture, and efficiency are key to success, without sales, you’ll always find a failed organization. I’ve sold big contracts to multinational corporations and formed partnerships between startups — and I’ve made mistakes in between. While I’m still learning, my modest ability to sell has provided the breathing room to improve other areas. Here’s my take on sales.

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Important Metrics for Small and Mid-Market Companies — Part 5: Investment

In an average month, my organization explores around 50 companies for possible investment. We review everything from organizational structure, culture, and financial performance, to sales systems, competitive position, and leadership style. This gives us an unusual vantage point from which to recognize patterns of success, and failure.

Getting data is never the problem. In fact for most executives, information can be overwhelming. Getting accurate data and interpreting it appropriately is an entirely different story.

In The Ceiling of Brute Force, we discussed what operational areas impede a company from continued growth. In a series of posts, we’re going to break down 19 of the most important key performance indicators (KPIs), which demonstrate how effectively the business is being run. Think of KPIs as the canaries in your coal mines. If one starts going south, you know it’s time to take a closer look.

Presented in a five-part series, here’s our take on what you should pay attention to, allowing you to focus your time, effort, and dollars. The five parts are: BasicsCustomersTeamOperational Efficiency, and Investment. Investment is our focus in Part 5, including: product development, capital expenditures & depreciation/amortization, total asset base, working capital, and ROIC/IRR.

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