Why join Value Creation – Alternative ?

If you have an interest in M&A, fundraising or strategy consulting, you ought to consider joining Value Creation – Alternative (VC-A).

But why?

I am so imbued with VC-A value that I sometimes fail to remember that everybody may not be aware of all the advantages that the organisation brings to its members. This post is meant to mend this negligence.

From the outside, most of you may have seen the following pitch:

Value Creation – Alternative is a Strategy and Investment Advisory firm. We help companies to develop their business through acquisition and organic growth. We accompany our clients throughout the entire life cycle of their corporate development programme: strategy definition, target search, due-diligence, negotiation, transformation map and change management.
 
We are a worldwide network of more than 1,000 seasoned professionals with more than 45,000 contacts and have collectively advised M&A projects worth in excess of US$100B.
 
We support complex strategic and operational business decisions with deep analysis and robust processes. Our methodology is a combination of desk research, interviews and application of our internal know how.

But what really happens inside VC-A?
Why should someone be interested in joining VC-A?

Before answering, let’s first address the who question.

Who should be joining Value Creation – Alternative?

The good news is that nearly anybody can have a role in VC-A. Even our competitores can join to work on the side of M&A and Fundraising deals.

We are organised as a Pyramid:

Value Creation - Alternative Membership Structure

Brokers

In brokering M&A and Fundraising deals, it does not matter so much who you are, but who you know.

As long as you know how to use the Internet and can read and write in English, you are welcome to join as a broker to introduce potential clients.

Brokers get a commission that is typically 10% of VC-A success fees.

VC-A Subject Matter Experts (SME)

Let us know what your expertise is and we will try to staff you on Strategy Consulting missions. SME will have to submit a CV and display top-tier academic credentials.

VC-A Industrial Partners

If you work for a company whose services could be useful to help other companies develop their business, remember that this is VC-A’s mission.

VC-A Investors

Money is the nerve of war. We are always hungry for new sources of funds.

VC-A Agents

Want to take more an active role in VC-A and/or manage the relationship with the contact that you have introduced? Join as a VC-A Agent.

VC-A Agents may be required to execute a non disclosure agreement and need to have enough industry expertise to handle the clients’ relationships.

VC-A Agents will receive priviledged information on non-public operations and have access to VC-A list of blind opportunities through a personal login.

VC-A Associate Directors

One needs first to register as a VC-A Agent before one can be promoted to VC-A Associate Director. VC-A Associates need to go through our interview and compliance process. As a rule of thumb, only 1 Agent out of 20, who request the promotion, make it through the compliance process.

As a VC-A Associate Director, you are authorised to operate under the VC-A brand and have access to the list of VC-A opportunities, including the names of the contacts.

VC-A Partners

One needs first to be promoted to VC-A Associate Director before being promoted to VC-A Partners.

VC-A Partners have access to VC-A M&A Suite and have a say in VC-A Business Development Strategy.

Why should one be joining Value Creation – Alternative?

There is a plethore of reasons why one should be joining VC-A but to keep this post short, I will highlight only 7 of them:

  1. It is free to join VC-A
  2. VC-A Members are world-class professionals
  3. VC-A’s collaborative philosophy is antithetical to the way traditional Investment Bankers work
  4. VC-A leverages best in class technology tools
  5. VC-A’s compliance procedures allay scammers, fraudsters and time wasters
  6. VC-A sprawls across the five continents
  7. No minimum commitment required but the sky is the limit

1- It is free to join VC-A

I said the magic work : “FREE”. You can now relax and register on-line following the link: http://www.vc-alternative.com/blog/members/

However, remember that it is also free to leave VC-A. Although extreamily rare, those who do not adopt a collaborative attitude and/or behave unethically are kindly ask to leave.

2- VC-A Members are world-class professionals

I founded VC-A back in 2002 leveraging the contacts I had made during my MBA at the IESE Business School and the London Business School. As a result, most of our VC-A Members are graduates from top-tier MBA or hold a PhD.

Most of our members are seasoned professionals with more than 10 years of work experience gained at blue chip companies.

3- VC-A’s collaborative philosophy is antithetical to the way traditional Investment Bankers work

To my knowledge, VC-A is the only organisation willing to open up its database to its customers and to share its best practices collaboratively. Click here to see how our Value Proposition to VC-A Members blurrs the distinction between clients and suppliers.

4- VC-A leverages best in class technology tools

VC-A is a fintech company. We are 100% digital. Join as a VC-A Agent and request a on-line demostration of our VC-A M&A Suite:

VC-A M&A Suite Dashboard

5-VC-A’s compliance procedures allay scammers, fraudsters and time wasters

Our VC-A Members are all asked to go through a  compliance process. We have developed an in-house procedure to reduce the risk of dealing with scammers, fraudsters and time wasters. For obvious reasons, we cannot explain much more but you may be interested in this retated post:

Gold refining. How to avoid scammers, fraudsters, smugglers and bandits

…and have a laugh watching this video.

6- VC-A sprawls across the five continents

We focus on cross-border transactions and our objective is to identify counter-parties abroad. Our more than 1 000 VC-A Members are located all over the world:

VC-A Map

 

7-No minimum commitment required, but the sky is the limit

There are no minimum objectives to meet, no commitments to perform, no obligations to work [unless you are tasked on a assignment].

On the other hand, if you don’t involve yourself proactively, you won’t get to share the profit. You will get out of VC-A what you will put in. VC-A Members must be proactive or… remain employees elsewhere (== modern slaves).

We have more opportunities that we can handle. Our minimum success fee is USD300k [to be shared collaboratively]. So basically, the sky is the limit.

See a blind list of selected VC-A opportunities here.

 

 

GDPR law will be a double whammy to M&A practitioners

Unless you do not use emails, you should by now have been spammed by a large number of messages asking you to “opt-in” to keep on receiving marketing material from the issuer. This jocose incongruity highlights only one of the many loopholes of the GDPR law, whose original intention was to reduce the number of unwanted emails.

As someone who receives an average of 300 emails per day, of which a very large number are spams or scans, I do appreciate the need for some sort of solution, but as usual, governments’ regulation has not been thought through carefully and the law will be difficult, if not impossible, to implement comprehensively.

Let’s take the “opt-in” process for example. The idea is that EU residents who “opt-in” are proactively agreeing to share their personal data with you. But what if they don’t read the opt-in email or don’t receive it, or just forget to opt-in or unsubscribe? Can you send a reminder? Two? One every 3 months?

Another incongruence is the “right to be forgotten”. Besides the technical difficulties of erasing historical data stored in remote backups that nobody knows how to restore anyway, once removed from the system, the system can no longer alert you that the data being introduced are from an EU resident who wants “to be forgotten”. In other words, to enforce one’s right to be forgotten, one needs to be identifiable or faces the risk of being re-registered. To be or not to be is no longer the question. You need to be if you want to be “not to be”.

And last but not least, you need to be able to tell where the data are coming from. “They are coming from a business card that you handed over a few weeks ago of course. Can’t you remember? Neither can I but this is what our system is saying.” Prove it wrong.

Beside those loopholes, what worries (upsets?) me more, is that these kinds of law always favour the well-off.

Let’s take the M&A sector for example. There is a generally accepted principle saying that the larger the number of contacts, the higher the probability of identifying the best counter-party.

Thanks to the Internet and digital networks, by reaching out to counterparties anywhere in the world, small players can compete against mastodons like the big 4 or global investment banks.

The GDPR law is a double whammy to M&A boutiques and free-lancers because not only will they have to invest their scarce resources to update their IT systems accordingly, but also, will they struggle to maintain a database of active contacts.

Indeed, where large companies can afford to pay telemarking services to keep their network active and have a large pipeline of opportunities to allure counter-parties to “opt-in”, smaller companies, who cannot keep the relationships alive with automated mailings, will see their contact database shrink dramatically.

With the GDPR law, the European Union, so concerned with an unfair competition of mammoth companies the like of Amazon, Google or Facebook, is in reality, favouring bigger organisations against entrepreneurial ones.

Reference: List Building and Cold Email under the GDPR —How to Be Compliant

Transatlantic relationships and their future

The AmChamSpain invited VC-A to attend a roundtable to discuss Transatlantic Relationships and their future.

Guess speakers were (from left to right looking at the picture):

  • Daniel Carreño, President for General Electric
  • Jaime Malet, President for the AmChamSpain
  • Josep Piqué, Moderator
  • José Manuel González-Páramo, President for Europa del Trans-Atlantic Business Council and Chairmain for BBVA
  • Thomas Reott, Economic Advisor for the USA Ambassy in Spain

Moderator: Josep Piqué, former Minister for International Affairs and President for the Iberoamerican Empresarial Foundation.

How to raise funding despite a low credit rating?

About credit rating

Credit rating is a measure that most financial institutions use to decide if a prospective borrower can or cannot take out a loan. The way they calculate the rate tends to be rather opaque and varies from one entity to another, depending on their risk appetite and level of sophistication.

 

Ranking del riesgo crediticio

We will not delve here into their secret recipe but focus on a way to convince them to unlock funding to low credit rated applicants.

But before all, let me ask you:

  • Do you have a project, that is viable but requires a capital investment between €5 and €100 million to become reality?
  • Do your current creditors believe that the project is sound but tell you that your company and/or the project do(es) not meet all their lending criteria?
  • Have you already exhausted most of the traditional ways of fundraising: factoring, confirming, project finance and private asset-backed mortgages?

If you have exhausted the traditional ways of funding, then you may be interested in talking to us and meet up with a Guarantor to enhance your credit.

If the guarantees that you can offer and not enough to convince the Lender(s), then you should think about contacting us to receive Guarantor‘ terms.

The following graph summarises the process:

The concept is simple. The borrower reaches an agreement with the Guarantor, who brings additional guarantees to improve the credit worthiness and enable the issuance of the loan.

  • The benefit to the Borrower is to secure the credit loan
  • The benefit to the Lender is to reduce his risk by pledging the Guarantor’s collaterals
  • The benefit to the Guarantor is to optimise the return on his assets

What is our solution?

VC-A has reached an agreement with a US Holding to enhance credits. Our partner as got more than $1.2 billion of assets under management.

Investment criteria

Borrowers are companies that need to fulfil the following conditions:

  • The company must have been operating for at least 2 years
  • They must have invested at least $10 million into the business
  • They must face difficulties to raise funding
  • Their business model is transactional
  • They need a credit between €5 million and €100 million
  • Funding must increase substantially the value of the company
  • The company must have already identified a Lender willing to issue a loan subject to the execution of a secondary guaranty.
Preferred sectors

We shall favour the following sectors:

  • Energy
  • Telecommunication
  • Production
  • Media
  • Agriculture
  • Naval
  • Leasing of equipment
  • Logistic
  • Finance
  • Real Estate (development, not pure brokering)
  • Commodity trading
Preferred locations

We prefer to look at operations in the following regions:

  • Spain
  • France
  • United Kingdom
  • United States
  • Western Europe
  • Asia

Samples of projects

1- Company in a special situation (“zombie” company)

The company is operating normally but carries a huge bulk of debt accrued during the downturn of the economy and then restructured as very-low-interest-rate long-term debt by banks unwilling to show write-offs on their books. A so-called “zombie” company.

They have identified a very high return project but cannot get a short-medium term loan because of their high indebtedness.

2-Commodity trader

The Trader has got an opportunity to triple his turnover but traditional lenders do not want to fund him because they consider that his current balance sheet is too small compared to his trading volume objective.

3-Highly leveraged company with syndicated loans from traditional banks

The company is heavily leveraged with bank loans. In spite of having new viable projects, it cannot raise more debt because bankers do not want more exposure on that client.

4- Investments in projects that will impact the company valuation

Capital-intensive projects in need of capital to enter a new market.

e.g. Building a new manufacturing plan, new infrastructures (energy, telecom…), acquisition of units of productions to generate additional cash flow (ships, aircraft, hotels…) etc.

 

For the Spanish version, click here.

You may also be intereted in our article on "Leveraged Recapitalization".

My feedback on the Mobile World Congress 2018 in Barcelona

If you did not have the chance to go to the Mobile World Congress 2018 in Barcelona, you may be interested in my experience that I am kindly sharing with you in this post.

As a provider of Corporate Advisory Services, the three words that best describe my feelings and thoughts about the event are: huge, alike and pointless.

HUGE

2.400 companies, 107.000 visitors from more than 200 countries and 3.500 media and international analysts. The mammoth fair generated €471 million to the city of Barcelona. If figures talk by themselves, the 12 two-storey halls and the throng of people dwarf the visitor, who can feel lonely and lost in an ocean of lights, neon signs and flashy adverts.

It took me one hour and a half to get my badge and nearly half an hour to walk from the south entry to the northern halls.  I went there two days and could hardly see more than one-third of the booths.

Despite the immensity of the venue, it was packed with jittering people, who, unlike me, looked as if they knew where they were going, and slowed the pace of the visit down.

ALIKE

Far from a revolution, the technologies exhibited looked pretty much the same as the ones end-users are already used to. I know that the devil is in the details, but let’s face it, there was nothing new under the sleat (the sun had taken a week off during the fair).

It is most of the same but faster – G5 supersedes G4 – bigger – more MIPS, more MHz, more pixels … –  and more “things” to connect with few small ratchets of technologies such as 360º camera phones and 3D pictures:

  • yet another payment solution
  • yet another “smart” phone – designed for kids, waterproof, with facial recognition to sign in…
  • yet another software to secure/scale up/manage your network
  • yet another service company telling that the future is IoT, AI, Machine Learning, Augmented Reality, Mobility, Cloud etc… and that you need them or you will be out of business in a blink’s time
  • yet another presumably smart item for so-called smart cities, smart homes or smart cars
  • yet another robot manufacturer designed for industry 4.0 to reduce cost and slash jobs

The only breakthrough that really impressed me was Hubei’s flying taxi:

When I first watched it on the TV, it did not inspire me much confidence, but when I saw it for real, I realised that this drone is closer to a helicopter than the toy I initially thought it was.

POINTLESS (for me and VC-A)

Had you realised that the most succesful mobile company in the world – Apple with its iPhone Suite – did not bother to attend the fair?

Apple may share my view that exhibiting at MWC is pointless.

Why organise a fair of that size? After only two days, I was exhausted, bone-tired and did not even have a chance to visit all the booths.

I was also disheartened. None of the exhibitors I had been talking to knew the reason why they had come, let alone, what their company was looking for.

The palm went to NTT. After a glass of sake, and asking 3 different people how I could help,  a “techie” explained that they were not looking for anything because:

  1. they have enough financial resources in-house to develop their business themselves,
  2.  they have their internal human resources to innovate,
  3. the technology they are showcasing is not for sale because it is only a prototype and
  4.  they don’t need help on sales because they already enjoy a huge salesforce
Most companies have paid a fortune to attend the MWC with no other reason than parading their financial wealth.

Let’s face it, there is only a handful of telecommunication operators in the world. Why would companies selling EXCLUSIVELY to telco operators need to liaise with thousands of dissociated visitors that will never do business with them?

Why do companies selling smart cities solutions attended the event? An exhibitor from Intel told me very proudly that the Mayor of the city of l’Hospitalet visited his booth and it was an opportunity to sell their smart city dashboard. Knowing that the MCW was located at l’Hospitalet and that the Intel delegation had to fly from the USA, I fail to see the return on investment.

And last but not least, most of the gadgets presented, either did not work or were useless.

Who really needs an “intelligent” fridge to calculate the number of calories that were stored? [Yes, “stored”, not “ingested”, the fridge is not that clever to know who eats what].

Who really needs facial recognition that does not work? [The computer mixed me up with somebody called Ze Zhang in Hong Kong – and did not even come close to my age. With coloured people, recognition rate drops below 30%.]

Who needs to operate remotely a 360º camera embedded into a smartphone? [Just ask your phone partner to swivel his hand and at least you will be sure that nobody is spying behind your back].

Who needs a tedious robot to follow you with a tablet? [If you cannot carry the tablet by yourself, you are unlikely to be moving around on your own].

Yes, most of those inventions have still to prove that they will be useful to our society beyond pure entertainment.

Because, if there is a sector where AI, Augmented Reality and other new technologies are being successfully implemented, it is gaming.

I loved the roller-coaster, formula one, and sky simulators. Even if I felt a bit dizzy afterwards and even if those applications are pointless for my business.

Mobile World Congress 2018

Join us at the Mobile World Congress 2018 in Barcelona on the 26 Feb – 1 – Mar 2018.

www.mobileworldcongress.com

 

2018 Global Innovation Conference

The Council for Trade and Investment Promotion (CTIP) will be co-hosting a conference in the city of Newark, New Jersey, USA on March 28, 29 and 30, 2018.

The topic of the conference is “Hedging Technology for Competitiveness and Development”.

More information…

KIM Conference 2018

On the 7th day of 2018, we were delighted to attend KIM’s conference.

More info here…

XXXIII Foro Capital Pymes – 33rd SME Capital Forum

On the 5th day of February, VC-A attended the 3rd SME Capital Forum.

The forum was organised by Foro Capital Pymes and showcased 10 companies looking for funding in the following industries:

Company descriptionAmount sought
Eye protection solution for screen displays€3 000 000
Plastic melding company€1 000 000
IoT solution for healthcare centers€2 500 000
P2P Real Estate market place €500 000
Booths design and building company €2 000 000
Post-surgery solution to prevent the development of metastases€650 000
Sport clothing retailer€800 000
Power generators using plants' photosynthesis€650 000
Machine Learning software for POS marketing€600 000
Cloud infrastructure provider€1 000 000

 

 

 

Annuit Coeptis

Are you the victim of a conspiracy?

Are you unsuccessful in business? Is your company going through a long streak of bad luck? Do you feel isolated at work? Are people talking behind you back? Do prospects no longer answer the phone?

Chances are that you are the victim of a conspiracy.

There must be a machination designed by a small group group of very influential people, such as the Jews, the Italian Mob, the CIA, the Russians, the LGBT, the Opus Dei, the Monarchy, the Government, or closer to your home, the President of your community of neighbours, who want you to fail.

Why?

Maybe because you belong to an ethnical minority, are disabled, short, tall, ugly, handsome, gay, Catholic, outspoken or simply too successful?

If you believe the above, then you are one of the 8 people out of 10 who believe in conspiracy theories.

The United States of Conspiracy

There is a plethora of conspiracy theories, from the CIA, who orchestrated the killing of JFK to the creation of the HIV virus by the governments to – chose the option that suits you best – irradicate homosexuality, control African populations, make money by selling an anti-virus. But the one that I like best it the story about Jesus’s daughter he would have had with Mary Magdalene. The legend was spread out by Dan Brown with his Da Vince Code. Even after the author had publicly confirmed that it was a tale, a survey indicated that 4% of the Americans still believed the story.

There are several reasons why people are inclined to believe balderdash. Bob Strauss enumerates 7 of them in his article that we could group into 3 categories:

  1. lack of intelligence (limited brain power)
  2. lack of education (limited access to information), and
  3. poor critical reasoning (the inability to use accurately one’s brain power in combination with the information available).

I would add: 4. the desire for some of us to go against the establishment, the mainstream and the conventional, no matter how ridiculous the riptide is.

NASA running a child sex colony on Mars

Have you heard that the moon is a hollow artificial satellite placed in orbit around the earth around 900 years ago by extraterrestrial aliens to watch the development of humankind? Trust me, it is bogus!

As long as the number of people fooled by spurious conspiracy theories remains small, it does not go beyond the status of an anecdote.

The concern is when a brook becomes a river large enough to impact the mainstream.

We have already seen the impact of sham political statements and false theories on  elections or referendums like the Brexit, the US elections (more fake news than real information and Russian interferences) or the Independence of Catalonia (the Russian interference, NOTE: again the Russians: they must be everywhere like the Judes and the Aliens).

The phenomenon is not new. In his book written in 1885, Germinal, Emile Zola depicts how a seed idea can grow from one single man’s mind and turn into mainstream thinking. In Germinal, the novelty was to give more rights to lower class workers. More than a century later, employees in most developed countries can now enjoy decent salaries, paid holidays, reasonable work hours, welfare, retirement, medical insurance etc…

What is new, is the speed of the dissemination. When the message is good, it is worth pursuing it. But when the message is fallacious, distorted, inaccurate or simply wrong, we must be wise enough to kill it in the nest instead of forwarding it.

No, you are not being the victim of a conspiracy. At worst, you are the victim of the Internet and its social networks carrying tons of fake news and garbage.

Open-up your mind, ask questions, challenge the news, gather information from multiple sources, listen to different sources of information, vet the sources and we will all be fine.

Otherwise, we will continue to be plagued with incongruous theories like this one about the Three Wise Men being gays, that I have just made up out based on the news that Madrid chose drag queens for traditional Three Kings parade.

 

More thoughts

 

 

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