Oct 19

Show me something besides money



Investing according to Frank…….

He has a private equity fund, specializing in markets such as manufacturing, metal trading and medical devices.

Their philosophy of investing is based on 3 principles:

  1. Work with excellent people with a proven track record
  2. The people who are partners also invest meaningful amounts
  3. The fund team can add value besides money: experience, expertise, network.

“We want to positively influence the investment,” he said. For his team to commit to an investment, both sides have to contribute to the other’s role. The entrepreneur has to invest more than sweat equity. The entrepreneur has to be financially invested in the pursuit. On the flip side, the investor has to be able to contribute more than money.

He said his biggest failure came from violating that principle. A company had a great environmental technology, but the founders weren’t invested and the company went bankrupt. Nothing was salvaged except for a hard lesson.

“It was too much of a hassle to put in more money and build a new team. We decided we’ll do that for other investments.”

Best exit: quadrupled an investment in two years.

Due diligence strategy:  Build a team around you with expertise.

Biggest mistake: Too likely to believe in success of entrepreneur

Biggest mistake for entrepreneurs: Don’t understand how investors think

Why Keiretsu?: Inflow, structural good deal flow and rigorous due diligence process

Investment philosophy: Every investment should generate a good return.

Thoughts on waiting it out: The vast majority of good startup companies deliver slower than promised. There’s still time.

“The best one I hope is still to come.”

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