Opening up to the Potential, Seeing through the Challenge
Across industries and investment cycles, our work has often begun where an important possibility did not yet fit the existing model and structure. The following examples illustrate the pattern.
Broadcom
Challenge: As the world desired to shift to digital communications, new protocols were abundant, but marginal performance and no standard was established to create a market.
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Approach: After development of a fundamental and new protocol, sell to the biggest customer and a forward price the solution in exchange for a large investment. Thus establishing the defacto standard and own the nascent, yet explosive market. Achieving 10x growth year over year with commensurate cost reductions.
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Insight: New market opportunities often require innovative sales structures before markets are prepared to recognize them.
Ultra Capital
Challenge: Many attractive real asset and regenerative infrastructure projects were too small, fragmented, or risky and unconventional for traditional institutional capital.
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Approach: Founded Ultra Capital and developed an investment fund with a framework designed to aggregate and finance smaller-scale regenerative infrastructure projects through an institutional platform. The mathematical models enabled low correlated assets to reduce risk and deliver consistent returns. The strategy became the basis for a $220 million inaugural capital raise.
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Insight: Sometimes the opportunity exists before the capital architecture capable of financing it.
Partech - Growth Fund
Challenge: Traditional public investment vehicles had limited ability to participate meaningfully in promising private growth companies.
Approach: Helped establish an extension to a public investment fund designed to allocate a portion of its capital to crossover investments in private companies leveraging the knowledge an insights from the public market companies.
Insight: New opportunities often require new capital structures before established markets are prepared to recognize them.
Dependable Furniture Manufacturing
Challenge: A near bankrupt furniture manufacturer had product and production capability but lacked a viable path back to market.
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Approach: Acquired and rebuilt Dependable Furniture Manufacturing, focusing not only on streamlining operations, but on solving distribution channel issues inherent in the market. Created new direct channels and partnerships with customers within the commercial furniture market.
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Insight: The visible problem is not always the real constraint.
Commercial Financial Exchange
Challenge: A near bankrupt financier of receivables in the trade and small manufacturing sectors had seemingly good numbers but was struggling to get paid and attract additional clients.
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Approach: Acquired majority interest and revamped Commercial Financial Exchange to focus on building community among its clients. Using new client software systems to bring visibility to the company and its clients on account status and relationships. Then proceeded to build a network of clients sharing information and assisting one and other to solve problems and finish projects to be able to get paid.
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Insight: Building community with visibility and integrity inspires all stakeholders.
Resonant Technology Group
Challenge: Ten seeded companies had been formed independently, each carrying potential, but lacking a coherent structure for capital, governance, shared resources, and long-term development.
Potential: Created a holding and incubation platform designed to bring the companies into a more coordinated structure, establish relative value, and explore opportunities for shared resources and collaboration.
Insight: A portfolio is not a platform unless the structure creates real alignment and all the stakeholders must come together for that purpose.
Agriculture Capital
Challenge: Farmers often create significant value at the farm level while processors, brands, and downstream participants capture much of the economic upside.
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Approach: At Equilibrium Capital, conceived, developed, and built Agriculture Capital, a farm-to-brand investment platform combining permanent crop production with branded consumer products. The inaugural platform raised approximately $250 million.
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Insight: Improving production is only one part of the solution. Sometimes the value chain itself must be redesigned.
Biological Capital
Challenge:Â Rarely has any developer considered the whole ecological system and how the human habitat can exist in harmony with it.
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Approach: Behaving as stewards and developing an understanding of the anthropological history of a given land and restore this, while building in the regenerative systems for energy, water, waste, agriculture and housing, a project begins to emulate nature.
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Insight: With thoughtful planning all can come together as one. A no waste land scale development
THE PATTERN
Different industries. Different technologies. Different capital structures. And always a different approach by not assuming the past predicts the future.
What is preventing this possibility from becoming what it could be?