“Rule number one: Don’t lose money. Rule number two: Don’t forget rule number one.”– Warren Buffett
Since Covid-19 turned the world upside down, it is unsurprising that many investors’ risk appetite and objectives have evolved. Some investors may have dialled down their risk tolerance, while others aiming to meet short-term ambitions may have pushed out their horizons, thinking about the future a little more carefully. Many will be seeking a solution that will serve them through all weathers. Navigating the current market backdrop has undoubtedly presented new challenges to investors.
While financial markets – and the companies and economies that underpin them – remain susceptible to Covid-19-related shocks and dramatic falls in investor sentiment, major structural shifts through the pandemic have also changed the way traditional correlations are playing out across portfolios. For example, with record levels of monetary and fiscal stimulus continuing to support large parts of the global economy, the outlook for fixed income, and its role in diversified portfolios, has come to look radically different.
It’s always tough starting a new business, in a boom economy its hard getting noticed and in a down-turn there may appear to be little money around to invest. The global ‘New Normal’ is likely to include much more emphasis on businesses that:
- have a compelling project with a comprehensive market and competitor analysis and clear market demand
- profitability and scaling, rather than just growth.
- comprehensive business plan
- experienced and previously successful team
- Great presentation
Management teams will need to demonstrate a deeper understanding of P&L, unit economics, and customer churn with priority given to the leaders that have successfully navigated their way through previous crisis.
Entrepreneurs need guidance in adapting to new requirements, and to use our experience to identify the business models and product/service propositions most likely to succeed.
Existing businesses need to base their actions on a clear set of assumptions, including contingency planning with a view on the long-term vision for profitability and scale. They will also need to take appropriate stabilisation and defensive measures in the short term. There are opportunities to hire better people, do more training and make acquisitions, as well as other “lean forward” tactics and use financial resources strategically. While it’s never easy to pivot quickly due to unforeseen circumstances, now is the time for small-business CEOs to prove themselves as visionary, prudent and trusted leaders to come out of this even stronger.
Over the long term, the changes in behaviours, lessons learned and new protocols implemented can enable a significant step-change improvement and lead to a better future for entrepreneurs, employees, investors and their customers.
How we help
We work closely with a wide range of investors from Family offices, through Venture Capital and Private Equity. We have a close and trusted relationship with them and understand what they look for in a new project. We can provide readiness assessments and formal Due Diligence (DD) reviews that comply to banking requirements and our range of services includes Pre-Seed, Seed, Series A, Series B and Series C+
We can help you to understand the types of investment available, find an investor and prepare for a successful transaction. Our range of services includes the following:
- Coaching entrepreneurs and teams in preparing for a formal investment assessment
- readiness assessments and formal Due Diligence (DD) reviews that comply to banking requirements.
- Prepare the foundations for an effective data exchange
- Support staff during interviews and in follow-up activities.
- Work with the management team and DD consultants to ensure the report achieves the right outcome.
- Support the management team and investor representatives in any post DD actions to meet lending requirements.