Tag Archives: Financial Strategy

“VC Bargain”: Capital in Exchange for the ‘Duty to Sell Company’

A post this summer from Jason Mendelson of the Foundry Group really caught my eye.  It is about the explicit “VC Bargain” that an entrepreneur makes when taking an investment from a venture capital firm.  Basically, the VC fund will need the founders to commit… Continue reading

Phantom Stock, Shadow Stock, or Virtual Stock — Employee Ownership (a series)

An employee who “thinks like an owner” is the Holy Grail — having employees for owners — as we have discussed in other posts.  Therefore, I have been writing a series of posts about tools that owners can use to assist employees to think like… Continue reading

Joys of Ice Cream, Apple Pie, and Recurring Revenue

Charlie Munger, Vice Chairman of Berkshire Hathaway, once told a friend of mine that if Charlie were a young man, he would be “trying to find online recurring revenue businesses” — like many that are being built and growing today. The combination of recurring revenue… Continue reading

New Twist on Venture Capital with Better Risk-Adjusted Investment Returns

A higher return investment can have a broad distribution of potential outcomes, as conveyed by this graph from Howard Marks of Oaktree Capital Management (the graph is from his book The Most Important Things Illuminated). This graph is a more helpful way to understand risk… Continue reading

BCG Growth Share Matrix of Cash Cows, Dogs, and Stars

Older ideas, seen anew, can be helpful to business owners.  In that spirit, I have highlighted Economies of Scale and Michael Porter’s Five Forces previously.  Today, I highlight another older idea in the Boston Consulting Group (BCG) Growth Share Matrix that was developed by the global consulting… Continue reading

Built to Last or Built to Flip?

Is your business built to last or built to flip?  No question influences your business strategy more than this one.  There is no right answer — either strategy is fine.  However, making sure that you have alignment throughout your organization on this question is very… Continue reading

Investment Wisdom Convergence from Clayton Christensen and Charlie Munger

When two great thinkers come to a similar idea from different starting points and careers, I pay attention.  For business and investment wisdom, Clayton Christensen of the Harvard Business School teaches his students a collection of “theories and frameworks” to help them understand and deal… Continue reading

Like Warren Buffett, Best Investment Philosophy Balances Discipline with Flexibility

Warren Buffett is famous for his discipline in his early investing success.  Now, I think he is demonstrating his flexibility (some are critical of his recent flexibility) in investment philosophy.  Both are important skills for business owners and managers to master and to know when… Continue reading

Unique Businesses Are A Force For Good

The best businesses are not just about making money.  It is necessary to make money to stay in business, but it is not sufficient for the business to be worth your time.  That is why the strongest businesses, in my opinion, are the ones that… Continue reading

Investment Strategy & Structure Is the #1 Thing Founders and CEO’s Should Watch In Raising Capital

To be better, one must first be different.  Thus, good strategy focuses on understanding differences and creating differences.  This also applies to investment firms — differences in structure often drives the strategy.  Any entrepreneur or business owner considering raising capital needs to understand the structure… Continue reading