Insights

Too many private companies raising series-B or beyond hire an advisor for the first time on a success-fee basis, and think the deal is as good as done. But there is no magic wand that advisors can wave to get the money in and fund raises often fail because of this understanding gap between company and […]

Most active fund managers underperform, meaning their clients would have done better investing in an index fund. So it seems strange to ask them how to run your company. Analyses of active versus passive fund management performance are sobering. There are many other reasons to be suspicious of investor surveys. Investors are a heterogeneous and fragmented bunch whose […]

The aim of investor targeting should be to ensure the managers of the largest possible pool of money know enough about your business that they are either already shareholders, or ready to invest at the right price. Companies often forget the low-hanging-fruit of reducing their red flag count, meaning action or inaction that turns off certain sections of the […]

The burden on investor education will continue to move from equity analysts to companies themselves judging by the trends in how equity analysts get paid.  Having already seen a 40% decline in UK broker fee income since 2008, there is going to be further scrutiny and separation of the research component of these fees. All but […]

BlackRock is the largest asset manager on the planet, with $4.7tr of assets under management, 12,000 employees, 135 investment teams in 70 offices in 30 countries. Earlier this year, CEO Larry Fink sent his annual letter to the CEOs of the S&P500 and largest international companies urging them again to focus on the long-term, citing “today’s culture […]

“Operating a startup … requires a financial and operating discipline that we haven’t seen in startupland for quite a while”  writes Tomasz Tunguz, VC at Redpoint, in his recent post looking at the implications for the private funding world of the collapse in public company valuations. Businesses that last year might have attracted funding by growing […]

After a summer of high share price correlation, we are back in a stock pickers market, which means investors are focusing on company fundamentals rather than macro-economic trends to direct their trading strategies. It’s tempting to think that this means you as CEO or CFO should allocate more time to meeting with investors. Our view is […]

Company valuation is difficult enough in public markets but for early stage companies, lack of track record and profits means that valuation rests mostly on what someone is prepared to pay. Apple’s valuation crystallises every fraction of a second during stock market hours when a trade is booked, but private company valuation crystallises about annually, […]

Earlier this month the UK’s Office for National Statistics (ONS) published data on the ownership of UK domiciled listed companies. 54% of value is owned by non-UK based institutions and private investors. Overseas ownership was already accelerating at the time of the Big Bang (1986) as the chart above shows. During the 1990’s it passed […]

Low cash conversion has become a favourite red-flag for investors. Cash conversion compares reported profits to cash flow. Clearly the two should tie-up over time and if they don’t, something is wrong. Avoiding low, persistent cash conversion is the best form of defence and the best way to avoid it is to publish it and use […]