Growthink Blog

Growthink Kiva Loan Recipient Repays Loan in Full


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As readers of the Growthink blog know, I LOVE Kiva (Please read my past blog post on it here).  For those not familiar with it, Kiva is a person-to-person micro-lending site –allowing individuals, primarily from developed countries, to lenddirectly to entrepreneurs in the developing world.  The borrowers arein places like Cambodia, Bolivia, Azerbaijan, Lebanon, Peru, andTanzania – and primarily borrow to allow their very small businesses toexpand and hire. 

Kiva was created in 2005 and originally funded 7 loans for a total of$3,500 which were all paid in full. 

Since then, it has grown incredibly. Try these stats on for size:

  • Total value of all loans made via Kiva: $89.7 million
  • Number of entrepreneurs that have received loans: 217,428 (!)
  • Current repayment rate: 98.35% (Phew - how would U.S. mortgage lenders love to be able to say that)
  • Number of countries represented by Kiva lenders: 181 (Who says the world isn't a more inter-connected and better place because of the Internet and technology?)
  • Percentage of Kiva loans which have been made to women entrepreneurs: 82.88% (A lot of academics and political scientists now cite the very high correlation between women's economic advancement and entrepreneurial opportunities and the relative stability of a country and a culture).

Growthink's first Kiva loan (first of many we hope), was made to Ms. Tamalii Iopu, owner of a fishing business in Luatuanuu, Somoa.  Ms. Iopu, a single mother of two, borrowed money last year to buy new fishing gear, and repaid it in full last month.

I would like to say that we had a particularly scientifically methodology for selecting Ms. Iopu from among the literally THOUSANDS of very deserving entrepreneurs on Kiva. The reality is, like most Kiva lenders, we simply connected to her story as presented on the site.  And the very pure repayment histories of all of the borrowers is beyond inspiring. 

Growthink hopes to do a LOT more with Kiva in the months and years to come. As I noted in my previous post, we love it because:

  • Loans, as opposed to charity, promote dignity, accountability and transparency.
  • The “middlemen” are cut out.  And, phew, is it about time.  Kiva is a great example of what the new world of finance will look like in the coming years.  As opposed to big, fat, amorphous Wall Street bankers standing between borrowers and lenders, buyers and sellers of money connect directly via a transparent Internet platform.  This greatly reduces the cost of capital and allocates it to where the marketplace, as opposed to your politician or your good old neighborhood’s old boys network, determines where it is best served.  It is a wake-up call for America.  98% repayment rate!  From the poorest of the poor? The titans of American finance (and the American consumer) could learn a thing or two from the Kiva borrowers.
  • It is more proof, if proof is needed, of the core advantages of small versus big and of owner-operators versus a managerial class


Check out Kiva at http://www.kiva.org. And prepare to be inspired.


Five Mega Trends That Are Transforming Private Equity Investing As We Know It


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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.
--
Jay Turo
CEO
Growthink, Inc

Follow me on Twitter
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  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.


Growthink Again Makes Inc. Magazine's Top 50 and Top 100 Lists


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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.
--
Jay Turo
CEO
Growthink, Inc

Follow me on Twitter
Join my network on LinkedIn


Hispanic America - Go Where the Growth Is


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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.

Try Beverages.

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.

--
Jay Turo
CEO
Growthink, Inc
 

P.S. Are you as sick and tired of the whiners and doomsdayers as I am?  This aint your granddaddy's world.  It is filled with ONE THOUSAND TIMES more opportunity than the good old days ever were.   You just need to know where to look. 


The One Thing You Can't Live Without


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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?

Water.

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.

--
Jay Turo
CEO
Growthink, Inc

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. 


The Obama Stimulus - $17 Billion to ONE Tech Sector


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Aren't you sick and tired of watching Washington spend all of YOUR money and YOU not seeing any of it?

Wonder where all of the stimulus money has gone?

Well, try this on:  The Obama stimulus commits $17 billion in federal funds to reimburse medical practices for implementation of electronic health records systems and their use.

This involved doctors getting paid up to $44,000 each to transition their practices to the new technology.

And even before the government began throwing money at the sector, it was a $4 billion business growing at 23%/year

Why Should You Care?

Well, if you're interested in capitalizing on one of the fastest growing and most dynamic technology sectors out there, and one about to see turbocharged growth driven by federal dollars, you should care.

Meet an Industry Pioneer

I would like to invite you to an exclusive opportunity to meet, via web conference, the CEO (and Stanford MBA) of one of the fastest-growing and innovative companies in the industry.

He will talk about which companies and technologies are best positioned to profit from the stimulus money, how "cloud computing" applications are beginning to see real adoption rates, and what has been driving the record revenue months his company has had this quarter in this tough economy.

Best regards, and look forward to connecting.

--
Jay Turo
CEO
Growthink, Inc


P.S. I know too many otherwise intelligent business men and women who have been listening to all of the negative drivel that passes as business news out there, and sitting on the sidelines and missing opportunities.

Don't be like them.


CleanTech Nation: Why Investments Have Risen 477%


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You've likely heard all of the hype regarding Cleantech.

How the Obama stimulus plan fuels $83 billion into the sector.

How cleantech investment today is more than 477% greater than what it was in 2005.

How Vinod Khosla, arguably the world's most famous and well- respected venture capitalist, last week raised another $1 billion - including $150 million of his own money, to invest in it.

Wind. Solar. Geothermal. Water treatment. Smart grid. Fuel cells. Carbon capture. If you have turned the TV on at all over the past year, you've probably heard about all of these.

And here is one you probably haven't heard - Bio-friendly pesticides

Who cares?

Well, if you're interested in capitalizing on one of the great arbitrage opportunities of our time, you should care.

Because bio-pesticides, an environmentally friendly option to synthetic chemicals, is the perfect storm about to happen.

We're talking about a $70 billion+ industry, where new, effective and safe pesticide products are gaining traction.

One where governments worldwide are mandating -  through strict, new regulation - a fast transition from the old, synthetic-based products that have been damaging our health and the environment for far too long.

An industry that includes dozens of completely under-the-radar, private companies.  And cash - rich big boys, like DowAgro and Monsanto - on acquisition sprees.

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 most dynamic companies in the industry.

He will talk about the super-fast growth his company is currently experiencing, and how they relate to his public offering and acquistion plans.

If you're interested in learning how money is really made in emerging technology, then this is a presentation you don't want to miss.

Portfolio Theory and Angel Investing


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One of the most exciting trends in angel investing and private equity over the last 6 months has been the application of traditional

Some of the most interesting investment research over the last 6 months has been the application of traditional portfolio theory and hedging  techniques to angel and private equity investing. Research compiled by the National Venture Capital Association, by the Kaufman Foundation for Entrepreneurial Activity, and by the Entrepreneurship in the United States Assessment, highlight a number of both subtle and startling insights.

When compared to other asset classes, there is relatively little correlation between various private equity investing sectors. In other words, while the share  prices of publicly traded aerospace and software companies, for example, will move up and down more or less together, the success probabilities of that hot drug development company and that wind energy startup are reasonably uncorrelated.

Why is this important? Because it creates a far greater hedging opportunity than is available in public stocks, whereby the investment combination of the wind  startup and the drug development company has disproportionately less risk for the expected return.

The research also shows that the smaller the size of an equity financing deal, the less correlated is the success probability of that deal with the equity markets as a whole. A subtle, but critical point that had made a HUGE difference in investment returns over the past 10 years. Try on these two facts:

1) The venture capital industry as a whole - with average financing sizes over the past 10 years of greater than $8 million/deal - has returned ZERO percent to investors during that time frame.

2) In contrast, the average return on private equity classified as "early, or angel stage" had an average annual return during that same period of a whopping 32.9%! (Thomson/Reuters).

I talk about more about the application of portfolio theory to private equity and angel investing in the video below:



For our Friday live deals call, click here: www.growthink.com/livedeals

 


Angel Investing Returns - The Impact of the Stock Market


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The general misery that the public markets have subjected us all to over the past year (and really the past 10 years, with the Dow Jones, the S & P, and the NASDAQ all trading lower today than they were in 1999), begs the question - how does stock market performance affect angel investing returns?

The answer, on the one hand, is very obvious.  A falling tide sinks all boats.  So as goes the public markets, so go the private equity markets, of which both venture capital and angel investments are subsets.

This is best illustrated by the amazing (and depressing) statistic that in the last 10 years there has been more money invested into the venture capital industry than has come out of it.  A lot of effort for naught.

But in spite of this, and maybe even because of it, average angel investing returns this decade have been surprisingly, even shockingly good.  According to data compiled by Thomson Financial, average angel investing returns have been in excess of 20% annually since 1999.

Why is this and will it continue?  Well, it has to do with the difference between the "macro" and the "micro."

To hear more on this, please click the below.
 
 
 
 

 


What Separates the Best from The Rest?


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Accelerant. C8 Medisensors. Dakim. DCIP. Free Conference. Fresh Games. Green Medical. Helix Wind. InfoSpace. Integreon. L3D3. Mobeze. MyPublicInfo. Nolatek. Ometric. Pocketsonics. Precision Time. Raise Capital. Recoup IT. Research Scientists. Sandel Medical. Spring Medical. Telverse. Thrombovision. XCOM Wireless. Xorbent.

These companies all share a few things in common:

1. They are either past or current Growthink clients and/or investments (though this is by no means a complete list).

2. They all either achieved - or are on the path to achieve - successful exits through a public offering or a company sale.

3. They are all led by CEO's and senior executives that are a cut above. Men and women that are entrepreneurs and business-builders in the best and highest sense - the kind of managers and visionaries that are the bedrock of America's vibrant, free enterprise system and way of life.

I have been privileged to work and get to know inspirational, entrepreneurial leaders like Dan Michel at Dakim, Liam Brown at Integreon, Walter Alessandrini at Ometric, Brian Ashton at Precision Time, Rick Singer at Raise Capital, Peter Sobotta from RecoupIT. Jack Smyth at Spring Medical Systems, Ed Teitel at Thrombovision, and Dan Hyman at XCOM Wireless.

Here are 5 qualities they all share:

1. Their Work Ethic is Off The Charts. This may sound really obvious, but the great entrepreneurs are extremely disciplined and organized and make the sacrifices to commit themselves fully to their business. Work - life balance is a nice theory, but in entrepreneurs to back, the more zealous the better.

2. They Have Great Numbers Fluency. As Guy Kawaski so eloquently puts it, we live in the age of excel, not of PowerPoint. Great 21st century leaders are "Super Crunchers," - they undertand the power of statistics, of "evidence-based" decision-making, of testing, and of managing by the numbers. They are not enslaved by the numbers nor do they lose sight of their human and qualitative aspects, but they are highly informed by them. They are hungry for unbiased, third-party information about their markets, their customers, their competitors.

3. They Have Done it Before. Following up on #2, the entrepreneurs most likely, statistically, to be successful are those that track records of success. It doesn't mean that just because they have succeeded in a past company mean that they will necessarily succeed in the next one. Nor do this mean that those who have failed in the past will fail in the future. Only that the probabilities are that this be the case. All of the managers above had track records before their existing business of successes - entrepreneurial successes, corporate successes, educational successes. Success follows them, not the other way around.

4. They Know When To Manage and When To Lead. Successful business exits require first and foremost, organization-building. Teams of people need to be assembled and directed to accomplish a common objective that can be quantified on the scorecards of business - revenues, profits, and cash flow. Balancing these left and right brain objectives require a sense of knowing when to manage and when to lead. Management is left-brained - it is analytical, numbers-driven, and dispassionate. It see business as a black box, with the sole objective of turning cash into more cash as fast as possible. Leadership is right-brained - it is conceptual, more long-term focused, and sees the business more as an organism as opposed to a collection of individual parts. Leaders sometimes will sacrifice short-term results for long-term gain, but do so carefully, deliberately, and warily. They are soft-hearted but hard-headed.

5. They are Proud and Humble. Great entrepreneurs are proud of their accomplishments and greatly desire more of them. They are confident in their vision and their abilities, and do not let adversity, criticism, objections or rejections deter them from their chosen path. They are not, however, headstrong nor arrogant. They respect facts, statistics, and informed opinions. And when these are in conflict with even their most dearly-held beliefs and strategies, they change. Not with the wind, but nor only at the point of a gun.

If you find these 5 attributes in an entrepreneur, savor them, appreciate them, learn from them, and back them. Till the cows come home. And then some more.


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