Comments on: Are Strategic Investors More Important in a Downturn Economy? http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/ Startups, entrepreneurship, business and social media Tue, 16 Mar 2010 13:42:21 +0000 http://wordpress.org/?v=2.9 hourly 1 By: gokhanht http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-111143 gokhanht Wed, 12 Aug 2009 08:57:01 +0000 http://www.instigatorblog.com/?p=602#comment-111143 <a href="http://www.nilart.net" rel="nofollow"><br>Joomla</a><br><a href="http://www.film-izleyelim.com" rel="nofollow"><br>Film izle</a><br><a href="http://www.film-izleyelim.com" rel="nofollow"><br>Film seyret</a><br><a href="http://www.film-izleyelim.com" rel="nofollow"><br>Film</a><br><a href="http://www.guzelsozlerim.org" rel="nofollow"><br>güzel sözler</a><br><a href="http://www.joomlasiteleri.net" rel="nofollow"><br>joomla siteleri</a>
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]]> By: Ed Harris http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105701 Ed Harris Mon, 17 Nov 2008 03:44:40 +0000 http://www.instigatorblog.com/?p=602#comment-105701 I don't think there will be too many "strategic investors" in my industry (health care). It may take2-6 years, but Obama is going to have the Federal boys taking care of things. I won't jump to any conclusions yet...but I am skeptical of the results. I don’t think there will be too many “strategic investors” in my industry (health care). It may take2-6 years, but Obama is going to have the Federal boys taking care of things.

I won’t jump to any conclusions yet…but I am skeptical of the results.

]]> By: DanGTD http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105537 DanGTD Thu, 30 Oct 2008 16:06:08 +0000 http://www.instigatorblog.com/?p=602#comment-105537 Definitely you should be careful. There's a big chance you'll have to step aside sometimes in the future. Definitely you should be careful. There’s a big chance you’ll have to step aside sometimes in the future.

]]> By: Kris Bovay http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105502 Kris Bovay Tue, 28 Oct 2008 17:58:28 +0000 http://www.instigatorblog.com/?p=602#comment-105502 A timely topic, Ben. I work with small business clients; one of these clients was in the midst of significant expansion program, with lender support, when the September financial 'storm' hit. Now, the bank has changed its requirements (debt to equity) to the degree that the expansion cannot move forward. The client is looking for a strategic investor rather than pulling in/out completely. But, yes, the risk is higher. When they find someone with the money and the interest, what will they have to give up in return? It's a tough spot for all businesses looking to grow (and without a 'war chest' to do so). A timely topic, Ben. I work with small business clients; one of these clients was in the midst of significant expansion program, with lender support, when the September financial ’storm’ hit. Now, the bank has changed its requirements (debt to equity) to the degree that the expansion cannot move forward. The client is looking for a strategic investor rather than pulling in/out completely. But, yes, the risk is higher. When they find someone with the money and the interest, what will they have to give up in return? It’s a tough spot for all businesses looking to grow (and without a ‘war chest’ to do so).

]]> By: Scott http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105485 Scott Mon, 27 Oct 2008 19:03:18 +0000 http://www.instigatorblog.com/?p=602#comment-105485 Hey Ben, Thoughtful post. While I believe that strategic investments are an option, a key concern I have would be "Do they know if they can really do this or not?" Does a larger company have a solid grasp on their financials and how much bureaucracy and time will be involved before you see the money. With the current economy, you're seeing large companies cut people and costs but adding more "approval/risk" groups to all financial decisions. Even if I thought I had a solid strategic investment lined up, I'd still be out there until I had the money in hand with an agreement I could live with. I probably wouldn't hold my breathe. Good luck to all, Scott Hey Ben,

Thoughtful post. While I believe that strategic investments are an option, a key concern I have would be “Do they know if they can really do this or not?” Does a larger company have a solid grasp on their financials and how much bureaucracy and time will be involved before you see the money. With the current economy, you’re seeing large companies cut people and costs but adding more “approval/risk” groups to all financial decisions. Even if I thought I had a solid strategic investment lined up, I’d still be out there until I had the money in hand with an agreement I could live with. I probably wouldn’t hold my breathe.

Good luck to all,

Scott

]]> By: Allan http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105483 Allan Mon, 27 Oct 2008 18:32:04 +0000 http://www.instigatorblog.com/?p=602#comment-105483 Thanks for this interesting perspective. The recent and infamous Sequoia "RIP Good Times" presentation to their portfolio companies encouraged entertaining strategic investments going forward. Good to see some warnings about the downsides. I wonder if anyone has put together a survey of strategic investments to show how they've performed over time and what the outcomes were? Thanks for this interesting perspective. The recent and infamous Sequoia “RIP Good Times” presentation to their portfolio companies encouraged entertaining strategic investments going forward. Good to see some warnings about the downsides.

I wonder if anyone has put together a survey of strategic investments to show how they’ve performed over time and what the outcomes were?

]]> By: Mark MacLeod http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105477 Mark MacLeod Mon, 27 Oct 2008 10:27:54 +0000 http://www.instigatorblog.com/?p=602#comment-105477 Hey Ben, Thanks for the link in this post. You ask a good, timely question. While I recognize that excepions exist, I am as against strategic investment as ever. Strategic big public companies are reeling from the drop in their stock price these days. They don't have the confidence or patience these days to carry uncertain investments on their books. In contrast, VCs are private and can take a multi year view. Mark Hey Ben,

Thanks for the link in this post. You ask a good, timely question. While I recognize that excepions exist, I am as against strategic investment as ever. Strategic big public companies are reeling from the drop in their stock price these days. They don’t have the confidence or patience these days to carry uncertain investments on their books.

In contrast, VCs are private and can take a multi year view.

Mark

]]> By: Greg Balanko-Dickson http://www.instigatorblog.com/are-strategic-investors-more-important-in-a-downturn-economy/2008/10/26/comment-page-1/#comment-105472 Greg Balanko-Dickson Sun, 26 Oct 2008 17:18:41 +0000 http://www.instigatorblog.com/?p=602#comment-105472 Hi Ben, it's been awhile I saw a great example of a strategic investment in the photography business. Co. A was a very high end (and most expensive), well known establishment. Co. B was funded as a startup at the low-mid level price point with student photographers that earned equity based on performance. They were located on the same street, different names, and identities. When people were unable to afford Co. A, they were referred to Co. B. It worked great because Co. A could continue focusing on it's affluent clientele while Co. B got qualified leads that fit their business model. They were in the same industry but served different markets at different price points. That said, they also had well defined shareholder agreements that identified conflicts of interest and remedies. Their situaion was unique because they kept their companies separate and the public never knew their was any connection. As separate companies if there was any M&A activity, it was dealt with at an arms length and left the other business intact. It was one of the most unique and functional strategic investments I had ever seen. Hi Ben, it’s been awhile

I saw a great example of a strategic investment in the photography business. Co. A was a very high end (and most expensive), well known establishment. Co. B was funded as a startup at the low-mid level price point with student photographers that earned equity based on performance.

They were located on the same street, different names, and identities.

When people were unable to afford Co. A, they were referred to Co. B. It worked great because Co. A could continue focusing on it’s affluent clientele while Co. B got qualified leads that fit their business model.

They were in the same industry but served different markets at different price points. That said, they also had well defined shareholder agreements that identified conflicts of interest and remedies.

Their situaion was unique because they kept their companies separate and the public never knew their was any connection.

As separate companies if there was any M&A activity, it was dealt with at an arms length and left the other business intact.

It was one of the most unique and functional strategic investments I had ever seen.

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