What Do You Value in a Company?
What Do You Value in a Company?
Startup companies are a dime-a-dozen, and many of them are looking for investment help from larger companies or in most cases investment bankers, also known as venture capitalists. Venture capitalists have a lot of money at their disposal but they don’t become successful by simply tossing money at every company that comes seeking an investment. Successful venture capitalists achieve success by using sound practices and strategies to choose their investment options wisely. For example, I recently spoke with Golden State Warriors principle owner Joe Lacob about the process he uses to determine which companies have value and which of those factors are the most valuable to him.
You Will Have to Take Some Risks
Joe told me that selecting a company to invest in is both a science and an art. Joe said, obviously different people who invest successfully will give you different advice. He said some would say that management is the most important thing when it comes to investing in a company and that the idea can change. On the other hand, he said others would say that the market size is the most important thing. They would say the most important factor is to really identify emerging markets to be able to predict when a big market is going to be emerging.” In Joe’s case and in his firm’s case they have always been very much thought of as a startup venture firm as opposed to late-stage firm, so there’s not a lot of information always. So Joe said, “all those things matter, but in his case your always going to have things you don’t know. You’re never going to have perfect information, so you have to take some big risks.”
Get the Right CEO in Place
However, Joe also told me that: “Taking big risks though doesn’t mean necessarily to just wildly or randomly invest. We have to look at the people. Is there something special about the founder, or if it’s a little later something special about the management team.” Joe then shared what he feels is the most important factor in whether or not a company will be successful. He said: “in a company the most important thing you will ever do as an investor is to identify and put in place a great CEO. At the end of the day it’s the single most important thing. It tells you whether a company is going to be successful more than anything else.” Joe said the right CEO is more important than the business plan, the size of the market, or anything else.” But he did also concede that “identifying the size of market is very, very important” as well.
Look for Greater Opportunities
Joe compared investing to fishing in a big stream. “I like to say I would rather go for a big, big opportunity – fish in a big stream. If you’re fishing in a small stream, a niche opportunity, then if something doesn’t work at that one there’s not going to be lot of other opportunities either, whereas if you’re fishing in a big emerging stream where lots of fish are coming down you’re going to catch one here or there.” So for Joe it’s very important to identify areas of the economy or areas of certain industries that are ripe for very large change. He said if you can do that and put the right people in place, get the right business plan and have the right capital plan you can be successful.
We hope you found this article about “What Do You Value in a Company?” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.
Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.
They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.
Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
The Economic Benefits of Hosting The Super Bowl
The Economic Benefits of Hosting the Super Bowl Written by Traci Bullock What is the Super Bowl? Arguably, the most popular US sporting event of the year. The Super Bowl features the best two teams from the NFL’s American Football Conference (AFC) and National Football Conference (NFC) competing for the Vince Lombardi Trophy, named…
Positive Work Environment
Positive Work Environment Written by Traci Bullock Creating a positive work environment is essential for the success of any organization or company. A positive work environment not only increases productivity and employee satisfaction, it also attracts and retains top talent. In this article, we will discuss key elements of creating a positive work place: making…
Unlocking Success, One Idea at a Time: An Interview with Lynn Thomas CEO of Thomas Consulting Inc.
See Lynn Thomas’ Recent Interview with Alan Olsen: https://youtu.be/0VFOWFl3wqk Lynn Thomas has been helping clients unlock success, one idea at a time by executing tailored client presentations that deliver extraordinary client experiences. Her firm specializes in creating and implementing plans based on new tax laws and the ever-changing market research. Lynn connects with her clients…
Pushing the Boundaries of Science and Technology: Insight from Dr. Lee Hood
See Dr. Lee Hood’s recent interview with Alan Olsen: https://youtu.be/60DDZ0MJ8QE Dr. Lee M. Hood is best known for his development of technologies which have enabled the advancement of predictive, preventative medicine. Dr Hood’s journey began at a young age, when he was an assistant professor of molecular immunology at California Institute of Technology in 1973.…