Company Analysis

One person can’t do it all

History is replete with famous, even eccentric, successful entrepreneurs.  But the great ones also had the capacity to motivate others to do their best, to make great personal sacrifices for the company and to stay the course during tough times (e.g., Steve Jobs).    Before making an investment in a new venture, ask whether a capable More >

One person can’t do it all2019-11-20T13:21:42+00:00

Venture investing succeeds when the entrepreneur knows its customer

Psychology plays a massive role in a customer’s purchasing behavior, and consumer products companies take advantage of this. Obviously, this is not news, but any company in which you invest must have a clear understanding of what motivates potential customers to buy their products.    Are you sure that the company’s buyers are just as motivated to buy as you are to invest? Consider carefully More >

Venture investing succeeds when the entrepreneur knows its customer2019-11-20T14:23:34+00:00

How realistic is your sales pipeline?

A freight train without a track ahead is just 200 tons of metal.  Until a new Venture has a distribution channels and a robust pipeline, it's basically the same. One important aspect to determine when evaluating the future prospects of a company (and the investment you are considering) is whether the company has “laid the track” More >

How realistic is your sales pipeline?2019-11-20T14:23:03+00:00

Has the entrepreneur (you funded) ever tangled with the competition?

Are there other businesses vying for the same sale and/or aggressively protecting their turf?  Competition can limit a new venture’s success — and your investment return. So be aware of other businesses — or the status quo — before investing.  There’s good news about competition!  More businesses are educating customers on the buying opportunity.  Unfortunately, the company must convince customers that its product or More >

Has the entrepreneur (you funded) ever tangled with the competition?2019-11-20T14:22:33+00:00

Are they ready to scale?

Any new venture can project growth.  Before investing, check the practical realities that support the 10x, 100x, 1000x growth.  All too often, the relatively mundane is ignored during the analysis process - the unexpected “snakes in the grass” often seriously derail business growth.  In general, businesses which are manufacturing a physical product are much more challenging to scale.  This is, in part, More >

Are they ready to scale?2019-11-20T14:22:50+00:00

Is this the entrepreneur’s first rodeo?

(watch 3 minute the video related to this article) Let’s start with some facts: In year one, 20% of small U.S. businesses fail. By the end of the 5th year, 50% do so.  Throw in a newbie entrepreneur, and those statistics may be generous.  Studies have pointed to a myriad of reasons; no market need, ran out of cash, and wrong team rated high on More >

Is this the entrepreneur’s first rodeo?2019-10-28T12:44:19+00:00

If you’re going to sell something, you ought to have something to sell.

(watch the 3 minutes video related to this article) You may not remember what was happening in information technology around the turn of the century (It’s known as the “The dot-com bubble”). For many people, the lesson we’re talking about in this article was learned the hard way.  According to FactSet, in the early part of More >

If you’re going to sell something, you ought to have something to sell.2019-10-07T13:50:49+00:00

New Product + Market Disruption = One Tough Investment Decision

(watch the 3 minutes video related to this article) If what you are investing in “rocks the world,” be prepared for the company to face unexpected challenges convincing customers.  Double any timeframe presented as well as the cost of success.  When it pertains to customers, this means a longer timeframe to achieve a significant level of sales (see Crossing the More >

New Product + Market Disruption = One Tough Investment Decision2019-10-28T12:44:38+00:00

Customers, or a lack thereof

Sure, there may be 7 billion people in the world with close to 14B legs, but how many of those individuals will stop what they’re doing and switch to this company’s brilliant new brand of pants? Customers, or a lack thereof.  It’s why businesses thrive or eventually fold. Every business plan projects ever-increasing sales (often exhibiting More >

Customers, or a lack thereof2019-10-24T03:30:19+00:00

Primary Investment Considerations (or First Principles)

Investment analysis can be highly challenging. Each Issuer of securities (the company seeking your investment) differs in significant ways from others, and it’s easy to miss “the forest” for a few particularly compelling “trees.” Therefore, it is essential that you apply a consistent approach to your analysis that first identifies the fundamental rationale for an More >

Primary Investment Considerations (or First Principles)2019-05-01T16:54:48+00:00

Seven Questions for Evaluating a Private Company

After evaluating thousands of unique private companies and alternative investments over the past 20 years, we have created this list of fundamental investment considerations for our use, and we are happy to make it available to you.     If you want to dive further into the Seven Questions framework, our complimentary white More >

Seven Questions for Evaluating a Private Company2019-05-06T19:13:00+00:00

What is a Balance Sheet?

Accounting 101 – Not your best subject.   But, if you intend to invest in a private company, spend a few minutes on these crib notes. They may save you a bundle down the road.  More >

What is a Balance Sheet?2019-05-30T19:58:58+00:00

Why Do Companies Use Debt Financing?

The following outlines the major reasons why businesses may choose to use debt financing over issuing equity when capital is needed. Businesses and other entities can finance their enterprises by issuing equity or using debt, such as borrowing funds through loans or by issuing notes.  Unlike equity, debt has a specified interest rate and a schedule of dates when interest is to be paid and all the principal fully repaid.    Many fast-growing companies would prefer to use More >

Why Do Companies Use Debt Financing?2019-02-22T19:36:32+00:00

Private Lending to Operating Companies

You don’t need to be a genius to understand what happens when you lend money to a private company, but there are important things you need to know. Let’s take the mystique out of private loans! More >

Private Lending to Operating Companies2019-04-29T18:19:10+00:00

“Due Diligence” and Investments: What Do I Really Need to Know?

It’s hard enough keeping this baby in running condition. But, to get the best performance, you work with your mechanic closely, asking additional questions, avoiding risks where you can.  While you rely on your mechanic, it just makes sense for you to have a deeper understanding… The same should be true of your investments.  Here More >

“Due Diligence” and Investments: What Do I Really Need to Know?2019-03-20T13:58:42+00:00

Due Diligence for Private Business Investment Opportunities

The following outlines the importance placed upon careful, independent Investor analysis of private market investments. “Due diligence” is a process whereby Investors evaluating a potential investment conduct independent analysis and verification of the information presented to them by the Issuer. Due diligence analysis goes beyond simply reading the Offering documents, such as a Private Placement More >

Due Diligence for Private Business Investment Opportunities2019-03-20T13:59:31+00:00