Did you know that in the last 10 years, every major stock market index has LOST investors money?
That's right, on an inflation adjusted basis, the Dow, S&P, and NASDAQ have each given investors NEGATIVE returns.
And with all of the meddling in the markets coming out of Washington, prospects for the next 10 years aren't any brighter.
Fortunately, there is a better way. In those same 10 years, while stock market investors made nothing or took a bath, early-stage private equity investors earned over 30% annually.
Why is This?
Efficient markets theory teaches us that private equity will always out-perform the public markets. Investors must be given higher rates of return to compensate for the traditional illiquidity and high variability of the asset class.
And up until recently, access to quality early-stage private equity return vehicles has been a) cost and time prohibitive for most institutional investors and b) simply inaccessible to the smaller, individual investor.
The Times They Are A Changin'
Luckily, this is no longer the case. Five mega-trends have coalesced to transform private equity investing as we know it:
1. The ability to source, research, and monitor deals via the Internet
2. The ability to take a data - versus a personality - driven approach to deal diligence
3. The ability to better price deals utilizing regression analysis
4. The ability to exit deals faster - both via alternative investment trading platforms like Second Market - and also simply because of the increasing velocity of business, especially technology business.
5. The ability and opportunity to properly apply "black swan," or "randomness" modeling to deal diligence
Best regards, and look forward to connecting.
P.S. Are you prepared to be saying in 2019 - "Darn - It has now been 20 years since I made any money with my investments?" The world has changed - time to change with it.Categories:
I am very happy to report that Growthink was named to the Inc. 5000 list for the 2nd year in a row.
We were ranked as one of the country's 50 fastest-growing financial services companies (#45) and one of the 100 fastest-growing businesses headquartered in Southern California (#71). Our comprehensive survey ranking was 1,042 out of the 5,000 fastest growing companies in the country.
Our standing is a testament to the work ethic and passion of our people as we navigate these historic markets. And our continued success highlights the power and importance of small business and entrepreneurship to the American economy.
I am also happy to report that in spite of my fears of a slow business summer, August has proven to be an incredibly busy month here at Growthink. Our 3rd quarter revenue numbers are on pace to come in at over a 30% uptick from Q2, and as importantly, the quality of our new client portfolio deals is incredibly high.
For a snapshot overview of some of the rockstar companies that we have brought on recently, click here.
How Can YOU Get Involved?
If you believe in emerging technology and in American entrepreneurship, if you're tired of the losing stock market game, and are open to the new and the different, then we should talk.
Best regards, and look forward to connecting.
It is no secret that Hispanic America is exploding. As the fastest-growing sector of the U.S. population, the U.S. Hispanic population is projected to triple from its current 45.5 million, to over 150 million by 2050.
And this exploding demographic group spends money - over $1 trillion in 2008 alone.
Why Should You Care?
Well, if you are looking for a dynamic, long-term macro-growth sector and one filled with special situation opportunities - then you should care.
Of the $210 billion U.S. consumers spend on beverages each year, Hispanics spent $24.8 billion of that. And with rising affluence, the "ready-to-drink" Hispanic-focused category is one pulsating with deals.
Who Says So?
Well, only some of the biggest beverage and consumer products companies in the world - like Coca-Cola, Pepsi, Kerin (of Japan), Pernod Ricard, China Water, and Inbev - which shocked the world with its $52 billion acquisition of Budweiser last year.
Putting It all Together
The macro trends here areas simple as 1-2-3. 1) Exploding Hispanic Population. 2) Rising affluence - leading to exploding demand for consumer products and 3) Robust sector acquisition activity.
Now for the micro: Find a company that 1) Has the right product with the right distribution. 2) Is targeting a niche sector that is unoccupied by the big boys and 3) Isn't so big and well-known that the "business as opportunity" has passed.
Best regards, and look forward to connecting.
I came across a very interesting advertisement in my Sunday paper the other day.
The ad was from a psychic named Maria that promised to allow you to achieve up to seven of 33 possible wishes.
Now, before I go any further this seemed to be a scam, and in fact, upon checking online, this psychic unfortunately appears to have been scamming people around the world for many years.
However, what I found really interesting was the list of 33 wishes that the advertiser supplied.
I figured that these scammers (since they probably have spent millions in advertising) did some research to ensure that these 33 wishes were universal; that is, that they pretty much sum up the wishes of most people. From a marketing perspective, this is something I found very interesting.
Below are a handful of the wishes on the list that stood out to me the most. Believe it or not, I firmly think that each of us CAN achieve each of these wishes. So, below each wish, I have provided my thoughts regarding how to achieve them -- without psychic assistance.
1) Sell or set up my own business
Start learning now to start, finance, grow, and exit your company.
2) Have a monthly income of $5,000.00
Start a business. Work hard. Make it successful. $5,000/month is nothing if you have a successful business.
3) Win enough money to never have to work again
Build a successful company. Sell it.
4) See my kids do really well in their studies
Work hard in starting and growing your successful company. Because you are the boss, you can spend more time with your kids helping them. Your hard work will also provide the funds to hire a tutor as needed.
5) Be on TV
Once you've started that successful company I've mentioned a couple of times- hire a good PR firm.
6) Attract men/women
Working hard and being successful will give you the confidence to better attract members of the opposite sex.
In fact, the majority of things on this "wish" list...
..can all be attained by starting and growing a successful business. Let me repeat that - You can have virtually everything you want if you work hard and start and/or grow a successful company.
It's that simple. Anyone who falls for Maria the Psychic's scam should be ashamed of themselves. Success simply does not come without hard work.
I have, unfortunately, seen people work very hard for others and not achieve the success they wanted. That is why starting your own company is so critical if you have not already done so.
Work hard. Work smart (I consider working "smart" as investing in expert information that allows you to choose and complete your tasks more effectively and efficiently). And most of those 33 wishes WILL come true.
If you're like me, there's one thing you probably take for granted. Interestingly, this one thing is something you can't live without. At least not for long.
But fortunately, there are some cutting-edge entrepreneurs working wonders on solving the challenges of this one thing.
What is it?
All around the world water shortages long ago crossed the crisis threshold. In California. Arizona. New Mexico. Georgia and Florida. The Middle East. China.
Too many years of antiquated public policy, population and economic growth, climate change, and unsustainable agriculture have strained water resources in all of these places to and beyond the breaking point.
The American Entrepreneur to the Rescue
The greater the adversity, the greater the opportunity. And in the dynamic technology landscape of "new water," American entrepreneurs are leading the way.
A select cadre of under-the-radar water startups are developing game-changing technologies to develop, purify, store, convey, and conserve water.
Meet the Industry Leader
I would like to invite you to an exclusive opportunity to meet, via web conference, the CEO of one of the fastest-growing and innovative water companies in the world.
He will talk about the state of the next generation technologies out there - distributed desalination, nano-particle membranes, energy-efficient reverse osmosis, and demand management.
And he will tell us where the smart money has been going lately, and who stands to profit from the $15 billion the Obama stimulus package targets for water technology and infrastructure investments.
Best regards, and look forward to connecting.
P.S. To make money in the new business world order, it is imperative to focus on deals and ideas that have a strong, blended public and private sector focus. You can search the whole world round and not find a technology and a marketplace that fits this description better than water.
Several months ago, I came across YouNoodle, a website which offers tools and a platform to help startup companies succeed. What I was initially drawn to was their Startup Predictor tool. The idea of a tool that could help predict the success, or lack thereof, of a new company really intrigued me.
So, I contacted Kirill Makharinsky, one of YouNoodle's co-founders, to learn more. Kirill was gracious enough to do the interview and provided tons of valuable information.
I started by asking Kirill about the Startup Predictor, and specifically about what are the key indicators that a new business will be successful.
Kirill started by explaining that they created the startup predictor after looking at rich data on approximately 3,000 companies. From this data, they determined patterns between initial conditions (particularly in terms of the team and what their intentions were) and the end result.
The results found really strong indicators that the following three factors are key indicators of a venture's future success:
1. The quality of the team in terms their experience and accomplishments, and how well the team members know each other.
2. The amount of commitment the team has in terms of their opportunity cost - specifically how much they are giving up to be in the venture (e.g., leaving a steady, high-paying job) and how much skin they have in the game (e.g., how much of their personal funds have they committed).
3. Having advisors. YouNoodle found that having the right advisors, even if they provide minimal amounts of time contributing to the business, strongly impact the future success of the business.
Kirill went on to discuss fundraising. He explained how allowing two advisors to take part in forming and modifying YouNoodle's business idea helped secure them as angel investors. He also gave a great case regarding why you should contact investors BEFORE you have a concrete business idea when raising funding.
Kirill also discussed why the quality of your business idea is over-rated, and provided a great answer to my question regarding the top 5 things entrepreneurs really need to know in order to be successful.
To listen to excerpts of this interview click the blue triangle on the player below.
To listen to the full interview and/or read the transcript, click here: http://www.growthinkuniversity.com/members/326.cfm
To visit YouNoodle, click here.
We just published a new series of capital-raising articles on the Growthink website, within our new "Capital Raising Resource Center."
Stay tuned! In the coming weeks and months, we'll be adding new articles and videos.
Are there any specific capital-raising topics you'd like us to cover? Let us know by leaving a comment below.
I'll be the first to admit that this fundraising strategy isn't for me. But I have a wife and kids, so maybe, a few years back, I would have given this one a shot.
The strategy: renting out the extra space in my apartment or house to travelers on a budget.
For three entrepreneurs, this fundraising strategy took on a life of its own. The three entrepreneurs, Joe Gebbia, Brian Chesky, and Nathan Blecharczyk, used this creative fundraising strategy (renting out the extra space in their apartments) to generate revenue after they quit their jobs to become entrepreneurs.
But, interestingly, they found the strategy so successful, that that turned it into a business that is now thriving.
The business, Airbnb is essentially the "eBay of space." It works like this...People list their apartments and houses (if they aren't going to be home), and even spare guest rooms, futons, and couches on the site and set a price per night. And then travelers who are looking for a place to stay search the listings for an accommodation that's right for them.
So, real estate owners and renters earn money, travelers get a discount, and Airbnb earns a 10% fee on all transactions. A true win-win-win. As you might imagine, Airbnb is doing very well, and is now in over 1150 cities in 82 countries.
My takeaways/lessons here are two-fold: first, if you have extra space or are traveling, you should consider listing your space on Airbnb to generate some revenues to invest in your business. Second, as this company illustrates, you can never be too creative in coming up with ideas to fund your business.
If you want to see a brief video of the Airbnb team, including their story of how Barry Manilow's drummer is one of their top users, here is a cool clip: