Night Orca

Asset Management ? Is a sovereign wealth fund waiting to invest in your opportunity? Maybe. Remember that you are there to solve an essential, core problem. How can the institution put capital to work for future generations? Your approach could be an answer.

Asset Management ? Marketing overreach is a costly death blow for many new-to-market fund managers. Building an asset base is a long-fuse process; it takes concerted focus over time. A basic communications plan can build brand awareness, while aligning with startup budget constraints.

Startup Companies > Shareholder Quest ? Why some deals get funded, while others do not, can be a mystery. But consider this point: Transactions that are successful in attracting capital often do so because they meet the affinity standards of their backers. Tech money tends to respond to internet-related firms. Real-estate wealth supports property deals. And those who like bling seem to back bling. ? There is a behavioral principle here: cognitive fluency. Or the ease with which our brains process information. Those making investment decisions?—?whether institutions or individuals?—?may revert to what they consider to be simple and familiar. ? A recent Harvard Business Review article points out that early-stage investors seldom use financial-analysis techniques to evaluate deals. In “How Venture Capitalists Make Decisions,” the authors argue that the primary focus is on the capabilities and character of startup founders. Affinity is a reliable lens through which risk takers can evaluate these personal qualities. ? Another essential reason investors may be more easily persuaded by affinity deals is the prospect of easier due-diligence evaluation. Founders and entrepreneurs can stumble at representing their transactions with full clarity or industry context, at least initially. Backers do not have to tread through a morass of new industry metrics for seemingly good deals. ? The problem of course is that trend-worthy opportunities tend to boil over, targeting the same investor names. There is now a flood of artificial-intelligence transactions in the market. One way to overcome that challenge is to follow a “blue ocean” capital-raising strategy. Go where others are not. ? New pools of capital are erupting almost volcano-like in some geographies. Sponsors behind US-based real-estate deals can now search for capital in Taipei or Tbilisi. Tech-related entrepreneurs in Brazil can think of Silicon Valley as a concept, not a location, exploring backer relationships in Singapore or Stockholm. ? Those looking for capital often fall into a rut because they do not take time to explore the full global universe of affinity backers. It is excruciating both to develop a business and uncover the financial resources to propel that evolution. Never mind trying to do so on a worldwide playing field. Still, the first step to discovering that unexpected gold vein may be understanding the vast potential “over there.” Related #entrepreneurship

Startup Companies > Capitalization Table ? In our work with young companies across industries, we encourage them to watch startup fashion brands. That suggestion may sound odd. Most entrepreneurs and founders would intuitively look to the technology sector for leadership. Take a moment to follow our logic. Companies in the textile-design business are often rough-around-the edges, struggling to survive in a dog-eat-dog marketplace. One reason these companies are so Darwinian is the low capital-investment hurdle typically required to get started. Regulatory issues are manageable, while manufacturing can be outsourced. These niche players frequently have motley capitalization tables, built on the back of odd lots of family offices, angel investors, and crowdfunding campaigns. They avoid the sin of raising too much money; they can embrace wide strategic flexibility. We have never met a fashion executive who has trouble coloring their business. As a timely example, look at Tampa-based Inversa, a startup featured in a recent Business Observer article. The idea of using exotic leathers from invasive species may seem far-fetched. Burmese pythons and lionfish, though, are very top-of-mind in Florida. Related #entrepreneurship