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April 20, 2010
 

Venture Capital Bank Investment Criteria

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This time I thought I'd promote the bank I work for a bit. It's deal hunting season and I get many business plans in my email. So in order to help prospective deal makers - I've jot down a bit about our investment criteria. Saves everyone a huge amount of time (and a few tears)!

Venture Capital Bank (or VC Bank for short) is a Bahrain based Islamic Investment Bank, focused on Venture Capital (VC), Private Equity (PE) and Real Estate (RE) in the Middle East and North Africa (MENA) region.

Currently, we're on the lookout for opportunities with great growth potential. A few pointers for deals that we're interested in are:
  • Companies that are Shari'ah compliant – defense, alcohol, hotels (selling alcohol), etc are off our list.
  • We are sector neutral, though we like to focus on oil and gas, retail, IT, education, good franchises, manufacturing, logistics.
  • We invest in companies mostly for a majority, controlling stake and in exceptional cases - a large minority with sufficient board level controls, so investing in funds and fund of funds are ruled out. However, we do direct co-investments also.
  • Our investment size sweet spot is in the range of USD 30 – USD 50 million, however we can do and have done larger deals in the past.
  • Generally, our target IRR is in the 25% - 30% range or above. Anything below that is not usually considered as worthy of attention by investors.
  • Our exits are generally after 4 – 5 years, and we have five companies in our portfolio which are being prepared for IPOs / Trade Sales.
  • We are focused on companies that have a few years of track record (preferably three), a strong management team and good industry/sector growth opportunities and either based in the MENA region, or wish to expand into this part of the world seeking both equity finance (expansion capital) and contacts for establishing themselves in the region. Having said that, we do not invest in distressed companies/real estate.
  • The Screening-to-Investment time frame will of course depend on the target company's readiness with information. Generally, we've seen well prepared company's take 2-3 months (including due diligence, negotiation).
  • If in case, the company is identified as a startup / seed / concept or real estate development – we will put them in touch with our other teams (VC and RE).
You can check out our website and download the latest VCOMM newsletter in English and Arabic. If you have some time, check out our corporate video too.

How do you get started? If you think you've got a great deal - then contact me at jose@vc-bank.com or on (+973) 39114645.

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Filed under  //   bank   criteria   investment   vcbank   venture capital  

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February 19, 2010
 

Deal Maker CRM for Deal Flow - Highrise

It's all about the network. The value of the network increases disproportionately to the size.

If you did a survey, you'd be surprized at how many high-touch professional services firms (PSFs) such as private equity, venture capital and investment banks actually track their deal flow. That's primarily because the deal team are too busy working on finding deals, post acquisition monitoring and growing their portfolio companies, to update a deal register or any crm software for that matter.

However, if there is a solution that will reduce the amount of time needed to enter the data points and access them - then you stand a chance of getting them to use the solution. As a deal maker, if I don't see immediate value for the time and effort spent, I'd certainly not waste any more precious time on it.

Another issue, is probably the lack of a formalized sales process to actually force someone to use the CRM package.

However, if you've ever had the chance to understand first-hand the importance of knowledge management - you'll definitely want to put in place a system where deal makers are encouraged to share information.

I found a solution that probably meets all the essentials - Highrise. I'm currently using this for tracking the deal flow in AVCION and highly recommend it. Not only have I been more efficient, but I'm really on top of things now. Wouldn't you like to be switched on always!

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Click here to download:
Deal_Maker_CRM_for_Deal_Flow_-.zip (137 KB)

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Filed under  //   avcion   banking   business   crm   deal flow   deal maker   highrise   private equity   system   venture capital  

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February 1, 2009
 

Differences Between Venture Capital, Private Equity And Hedge Funds

Let me say this upfront, we're all part of the same pool i.e. swimming pool. Just like we have different styles of swimming, we have different forms of 'alternative' investing. Venture Capital is more like the Backstroke, comfortable, not as fast as the others (long incubation times) and sometimes clueless (they look up at the sky ;o) Private Equity is like the Breaststroke (Frog/Butterfly), sure, supported, slow but steady on known facts (history of company) and Hedge Fund is like the Freestyle, make money somehow or the other, use whatever it takes, absolute returns, faster (trading, vs investing).

Jokes apart…

Since there are no legal or commonly accepted definitions, here are the Ultimate Differences between Venture Capital, Private Equity and Hedge Funds (ok, they're generalizations!):

PEVCHF Differences

Ok, this is not a perfect table of comparisons, mainly because we've seen each one step on the other's shoes. The lines between venture capital and private equity (and hedge funds) investments have been blurred by increased competition in the capital markets, which has forced each type of firm to expand their respective horizons in order to continue capturing new opportunities. But this is normal – at the end of the day, it's CAPITALISM!

P.S. If you'd like to add your thoughts on improving this comparison matrix, please send an email.

From the page Differences between Venture Capital, Private Equity and Hedge Funds - JPMARTIN

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