From capitalist to catalyst…
Thursday, 13 November 2008
By Doron Ben-Meir
For almost a decade now the question “what does a VC do when he doesn’t have a fund to manage?” was not one I reflected upon too deeply, but our friend the “financial crisis” has further suppressed the appetite of our institutional investors for this asset class. There remain existing funds in the market and a few strategic corporate investors, but our industry is facing some very “interesting” times.
As a serial entrepreneur one learns the art of persistence, and one also learns when to work around a problem rather than maintaining a crash or crash-through approach.
Our first love is building quality businesses that typically (though not exclusively) have a technology based value proposition. In the absence of being able to invest in such opportunities, we choose to work with interesting companies to help them with their business architecture, strategy and select elements of their execution.
Our model is sometimes referred to as a “venture catalyst”.
The idea is that the experience of having built several businesses across a variety of technology disciplines, combined with the intimate understanding of how investors think, offers clients a unique blend of operational and strategic assistance at a time in the cycle when none of us can afford too many mistakes.
The result is a business that progresses more quickly and efficiently – hence the catalytic analogy.
We’ll provide a range of services, including strategic/business planning, international expansion advisory, and entrepreneurial coaching/mentoring.
Our clients will include R&D institutions, VC portfolio companies and privately funded businesses through to larger scale operations looking to develop fresh strategic direction in an ever changing marketplace.
We can also assist with funding, but unlike a conventional investment bank, we would not take a deal to our colleagues in the VC industry unless, prima facie, it is the sort of deal we would look at seriously in our own fund.
This is a matter of professional integrity which, if compromised, cannot be recovered. While this means that we are very selective, the flip side is that we maintain high credibility in the industry and so provide qualified clients with a significant advantage in a very tight market.
In future blogs I will relate anecdotes and experiences of catalyst activity in addition to my existing focus on funding your business.
Doron Ben-Meir has been an active venture capital manager for the last eight years. He founded Prescient Venture Capital and prior to that was a consulting investment director of Momentum Funds Management. He was a serial entrepreneur over a 12 year period, co-founding five new technology based businesses.
For more Funding Your Business blogs, click here.
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