Evaluating Issuers

The Direct Private Investments Show


0:00 – 01:17: Bruce Roberts and Carofin Introduction
01:19 – 02:24: What are “Issuers” and “Securities?”
02:24 – 04:43 Creating an issuer evaluation process: the customer’s “why
04:43 – 05:56 The Lane: Meeting the Customer’s Need with the Company’s Solution
05:56 –  07:40 Company Challenges: Product and Sales
07:40 –10:10   Example of the Lane Framework: Focusing on the Issuer’s Channel
10:10 – 11:53  First Principles: Problem, Challenges, and Solution
11:53 – 14:02  Company organization: does it align with the Lane — Operations, Sales and marketing, and Administration
14:03 – 17:02  Using the Lane to compare investments


As an accredited investor, you know that direct private investing can be a lucrative way to grow your portfolio.  However, with the vast array of investment opportunities available, how do you know which ones to
choose?  At Carofin, an investment bank, we take a unique approach to evaluating issuers that we believe sets us apart from the competition.  We call it “The Lane.”

The Lane is a proprietary framework that we have developed over years of experience in the direct private investing space.  It is based on the idea of First Principles, a concept that successful entrepreneurs and investors like Charlie Munger, Warren Buffett, Carl Icahn, and Elon Musk have used.  The Lane framework allows us to evaluate issuers in a structured and organized way so that we can identify the challenges they face and determine whether their solution is viable.

The Lane consists of three main components: the opportunity or problem, the challenges, and the solution.  When we evaluate an issuer, we start by identifying the opportunity or problem they are trying to  address.  This helps us understand what market or customer need they are trying to fill and whether that need is real or perceived.  We then look at the challenges the issuer faces in addressing that opportunity or problem.  These challenges can be product-related or sales-related, and we use our experience and expertise to identify them.

Once we have identified the challenges, we evaluate the issuer’s solution.  This is where the rubber meets the road, so to speak.  We ask ourselves whether the solution adequately addresses the challenges, or whether there are gaps that need filling.  We also look at the team behind the solution and whether they have the experience and expertise to execute their plan.

Through this process, we gain a clear understanding of the issuer’s strengths and weaknesses and can make an informed decision about whether to consider moving forward with them.  But our work doesn’t stop there.  We also look at the operational and financial aspects of the issuer’s business and evaluate how well they align with the challenges they face.  This allows us to identify potential risks and opportunities and to assess the issuer’s overall risk-return profile.

Here are three key insights that we have gained from using The Lane framework:

Understanding the opportunity or problem is crucial

Before we can evaluate an issuer’s solution, we need to understand the opportunity or problem they are trying to address.  This helps us identify the market or customer need and whether it is real or perceived. Without this understanding, we risk investing in a solution that doesn’t have a market.

The challenges an issuer faces can vary depending on their stage of development

As an issuer grows and matures, the challenges they face can change.  For example, a startup may face challenges related to product development and market validation, while a more established company may face
challenges related to scaling and competition.  By understanding the challenges an issuer faces, we can better assess their risk-return profile.

Operational and financial alignment is key

Even if an issuer has a great solution, they may not be able to execute it if their operations and financials are not aligned with the challenges they face.  For example, a company that is trying to scale may need to invest heavily in marketing and sales, but, if they don’t have the financial resources to do so, they may struggle to grow.  By evaluating the issuer’s operations and financials, we can identify potential risks and opportunities and assess their overall risk-return profile.

In conclusion, evaluating issuers is a critical part of the investment process.  At Carofin, we use our proprietary framework, The Lane, to conduct a thorough analysis of a company and identify potential risks and
opportunities for investors.  By organizing our evaluation into three  buckets, assessing the company’s stage of development, and comparing different issuers, we help our investors discern which tailored investment opportunities best match their criteria.  Following this path should help you choose the investments to consider more deeply.

For more information, please read The Lane or listen to our discussion on the “Direct Private Investments Show.”

And, if you are interested in learning more about investments through Carofin, you can get started here.





In the interest of accessibility, here are some terms that any investor should be familiary with.