Symptomatic – how the walk go


Money go where Money can be made ……and Gold-digers flock where Money is moving hands

The last couple of posts, and the next couple to come, is an attempt in lifting a couple of key questions to reflect on….answers? There some, yes. Opportunities…? A bunch! Ways to round the obstacles – absolutely! Ways to win…? Only for them who dares -wisely ๐Ÿ™‚

There is a lot of creativity in India – sprung out of necessity and ambition, in Stockholm due to tradition and fashion, Silicon Valley due to it’s very nature, Berlin…around the world actually. The innovative – innovation – aspect in what is going is not as apparent. One can wonder why.

I watched a Youtube interview with one of the most prominent and successful VC’s partners from the Valleys most famous VC “partnerships”, famous for investing in some of the most innovative startups in history – early stage. He said that there is more money to be made in investing in already listed companies like FB and Amazon than in early stage companies. He did the math…and added…but “we will still do early stage”. It was clear – it is better, easier and less risky to be on NASDAQ, even NYSE, pr act as a PE, rather than be an VC (being an angel is not even on the map). One can multiply the money many times by investing, but only lose 1x the invested amount ๐Ÿ™‚ – right?

I recently had an exclusive trade deal for a very large volume of an attractive product and reached out to someone I knew who has direct access to the regions largest buyer. He called the buyers PA and left a message. About an hour later I had calls from probably 25 – 30 brokers claiming to represent the buyer. I were lucky not to have all 6000 (approx.) flocking brokers hanging at five-star hotels in Dubai on the phone. It got managed and deal closed. But, when these 6000 guys go hunting and there is no pray, the business guests and prominent tourists at these hotels “by-accident” get the most “innovative” deal proposal of a lifetime, by men dressed as “sheikhs” or silk suits. Many of these guys are x-investment bankers from our financial centers or failed business guys from all over the world. How do serious business people compete in such an environment? Who can you trust? How do you get access?

In Stockholm, I been told, that 19 out of 20 funded startups go bankrupt when first rounds money is “burnt”. Back in 2000 only 1 out of 1400 startups got funded in Silicon Valley – that was during the internet bubble when everything got funded that had a 3-page business plan. I think that tells a lot about entrepreneurs and investors. In Stockholm today, investors in 19 out of 20 startups don’t do their job, and young people (because most entrepreneurs in Stockholm are young <30) experience failure. Many times as their first career experience. If they learn from it – good. If they had had investors who did their job, and mentorship that did what was required, many would probably have excelled – or understood there was a reason for not getting funded.

I asked 6 or the most prominent investment bankers in Stockholm a simple question. Only one had an answer. I told that I had a significant amount of capital to invest – should have got them excited. I wanted, on behalf of my client invest in a good company in a sector in Sweden that will have a significance for the region, Sweden and that will have a material role in the future for Sweden. Investment horizon – long; 10-15 years which is part of approx. two financial cycles. Five investment advisory teams go blank. The sixth answers; “Haaa…That is a though question. It’s is no IT, telecom or finance…what we have is forrest and iron.” … Do you want me to elaborate on where iron is mined economically, where paper and pulp industry is located, or who owns the relevant companies in these sectors…. ? The short answer is – not in Sweden or Swedes.

What is the value of knowledge, experience, know-how, …. Services. Is the market rate of “intellect” an indication of Anything? …or the lack of willingness to pay for it – KNOWLEDGE and expertise….In India advise is regarded as for free, it is a way of building trust and relationship, or solidifying ( a long term relationship), only delivery of goods or assets has a value that result in a monetary payment – a trading mentality. In Sweden rates for project managers has gone from SEK 1500/h in 1990 to SEK 550-600/h in 2015 – in Stockholm. What do we call that – negative return on Intellectual Capital (IC)! …some 10-15 years ago I recall I heard IC was going to overtake money is importance…Ohoo yes…it is all converted into SC (structural capital) – IT systems and soon autonomous Robots. (Disclosure: I am heavily invested in autonomous systems).

What are we observing; lack of direction, a conspiracy of disinformation, a natural linear progression, or an inflection point where the past 25 – 35 years investments in internet, telecom and military systems combined with a political power shift is about to break through, surface…show its “face” …

 Italy is in position to become Europe’s fastest growing economy – I just read on the World Economic Forums web site.

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