It’s an interesting profession. Investing in enterprises with potential for growth. Persuading others to invest. Taking an active role in the Board. Pushing for performance. Supporting initiatives that drive success. And then exiting with a tidy profit.
Sounds easy, but isn’t. Along with Financial Skills you must have an appetite for risk that modern bankers lack. You must quickly understand sector dynamics. You need a working understanding of a many disciplines, from Sales and Marketing to Production and Procurement. And if you get it wrong, your prospects of return and, perhaps more importantly, your reputation may be diminished.
I asked my new friend what steps he and his colleagues took to understand the companies that they bought into. He waxed lyrical about various aspects of Due Diligence. He was extremely confident on matters financial, as you might expect. When we came to brand value he seemed to be on shakier ground. A strong brand was ‘a good thing’. But how to measure brand strength was more of a puzzle. Continue reading