As investors, we know that we only get ‘paid’ when our portfolio companies succeed.
So it’s in our own best interests to discover those better paths to success, which can also generate our returns faster, and increase the value (for everyone).
As seasoned investors, we each know our space well. But often that’s only from a singular viewpoint; our own. Of course, we can look backward and forward along the value chain, seeing where our opportunities come from and where they are going.
But we often don’t have the perspective of the full picture of the value chain.
So we fight for our ‘patch’, trying to squeeze every last dollar out of every deal. And in doing so, we spend a lot of time and effort in competition.
Think about how you source opportunities now
How many enquiries did you have to respond to in order to find your last 5 investments?
How much time & effort did it actually take to bring each deal to the table?
How many good opportunities did you pass over, because they weren’t ready?
How many didn’t meet your criteria, or failed your due diligence?
Have good opportunities you’ve looked at, run out of money (& failed before getting to you) because they couldn’t find the right earlier investors?
What ratio of time do you spend in sourcing versus working with ventures?
Did you get the returns you were expecting, in the time you wanted?
At one time, there were people that thought our world was flat, because they had no perspective. But in the modern age, we all know that progress is inevitable, and if we have more perspective, we can choose how we are each affected by that change.
If we keep thinking that the way we do things now, is the only way that will work, we’ll get left behind by those others who can & do continuously seek out new & better ways to work together.
What if there was a better way?
What if, instead of putting most of our time & effort into finding & getting the deals, we instead focussed on adding value to our stage, before handing the opportunity over to someone who can take our portfolio opportunities on to the next stage of the journey?
To consider that course would require us to take a wider view. And it would also require us to collaborate, rather than compete with others.
And lets imagine that by focussing on creating more value, might we also be able to increase the volume, the speed & the quantum by which we get our returns?
Imagine instead of looking at 100 (or more) opportunities to find the five that we wanted, that we could be introduced to twenty, of which ten are a good fit for us.
Can you see it?
Suddenly, all that time spent sourcing opportunities, and filtering deals could now be put into accelerating them along the path quicker (and perhaps in greater volumes), with better metrics & scale.
Instead of wasting time stressing over how to extract the maximum value, could you then pass them on to the next step in the value chain, who can then increase the value for everyone?
But who knows how to do this? Who has the secrets of the big picture? The whole view? And who could we put our faith in to share in the value of the upside?
Perhaps there are people who have those secrets, but would they would be willing to share them?
What if others can see it, but you can’t?
We all have our ‘fish that got away’; the one that we knew was going to be big. You missed out, whilst others benefited. Do you really know why? Will it happen again? Of course it will, but there is something you can do about it.
Some investors already have these answers, and are applying them with great success.
So the choice is ours. To seek & find answers, or to be so sure that there are none, and ‘this way’ is the only way.
The risk in not acting, is that others will find those answers.
Which affects your lead-flow, workload, deal-flow & returns. Theirs will get better, whilst you are left sorting through what’s left. Can you afford to take that risk?
If you want to learn from the perspective of others who have that different view of the ‘venture value chain’, and possibly some insights & secrets that you might not have considered, now is the time.