Asset-Management

Why “asset management” is missing a point

Every startup (and banks, for that matter, but in a much less attractive fashion) are all after the Mass Affluents, meaning the large majority of potential investors and try to manage their money or at least to be the preferred infrastructure through which they can manage it themselves.

Personally, I had the worse experience ever with asset management, equity and financial products (funds, mainly blue chips) investments.
I can proudly claim I had no significant success in investing in financial products, whether I did it myself or I delegated it to someone else.

In Italy, we have this great category called “financial promoters”.
Thirty years ago, they started their career with a great deal of skepticism, fighting the perception that they were like stilling the money from the savers, that they pretended to be cheaper than banks but in reality was the opposite, and so forth.

Now, my home country maybe is not the brightest example of modernity or vision, for this and its insurance market (to name another financial service that badly need innovation as well) is not a good example either.
This being said, what I have learnt in my failed career of a private investor is the following :
– you have to follow your investment daily,
– there is never enough information that needs to be gathered in order to take mindful decisions,
you (or whomever human) very hardly beat the market, unless your money is virtually unlimited,
you have no idea what “risk profile” REALLY means nor if the portfolio you have been advised to set up is the best for you,
luck is still a great components of a successful investment, sometimes in a higher proportion you would like to admit.

There are roughly twenty very good platform for asset management now in the market, without of course taking into the account the market feeds aggregators, the on the spot analytics platform, and the “behavioural” trading platform (where you do nothing else than betting on you copying someone else’s strategy, for example).

The reasons why this business is exploding have the same fundamentals than Alternative Lending.
It’s impossible for a bank (in this case for an asst manager) to perform in managing a portfolio of a few dozen of thousands dollars, as well as it’s impossible for a bank to give a 20000 USD loan and make money out of it.

Now : most of the value proposition of these new asset management startups today is based on ACCESS and PRICE. Access to a variety of financial products (and a comprehensive literature around it) in a much more unbiased, granular, global way than what a single bank can do, and price because the commission asset under management is much lower than the “traditional” way.

What very few people have managed to do is to go beyond asset management and give tailored STRUCTURE on the way people manage their money. Let me explain myself.
What the mythical Italian “financial promoters” were doing, back when they started, was very simple : they built such a deep knowledge about you, your family, your assets, your real estate appetite, your pension requirements, the need for your kids school and most importantly a feeling that they would have managed that money as if it was theirs.

Something that today is missing – again, for the mass affluent, meaning anybody fortunate enough to save some money at the end of the year – is being able to do Life Scenario Planning and get the necessary help to implement it when needed.

Since I left my dear, safe, structured, hierarchical, over cuddling previous company, I am facing this problem myself : I have a piece of that mythical retirement, no defined plan, some attempt of real estate. But who could I really trust to advise me on what the best future proof asset allocation would look like for me ?
When you can afford a private banker for yourself, admittedly you would be better helped off… But arguably that person would be partial and probably have dozen of clients like you.

What’s the point I am trying to make here ?
Unless you spent 30 years in the same company, bought a house and save enough for your kids to manage to grow up and reloaded their dreams (or at least help them to), it is likely you need mindful advice about :
– heritage,
– real estate management,
– life insurance,
– pension,
– tax optimisation.

And no one will pay enough attention to you unless your money at the banks justifies that waste of (their) time.
Interesting enough, there are only so many billionaires (or close to that ) on the planet and the next market is clearly going to be the second layer of that fortune.

The new entrants combining a intelligent, top notch user experience in managing their assets, supported by a like-human advice big data driven and most importantly a comprehensive profiling and tailored proposal on the top of the pure investment side, will get the biggest part of the cake.

Stay tuned

Matteo

CapeTown-Innotribe

10 Fintech CEOs any bank should hire. Not sure AT ALL they would go, though…

Another list, this time about Founders & CEOs.
I am in the plane flying back from amazing Cape Town, after the Local Innotribe challenge and once again intrigued by the entrepreneurs talent and the drivers that push them to be different, to stand up, to take risks, to look for something that is not done yet.
This is not a “top 10 whatever”, rather a list of people I had the opportunity to meet in the past months and one day I would love to put all of them together in a room and create something new, like a CEO Hackaton. Could be amazing !

Yoni Assia
eToro CEO, guru of innovation in capital markets and extremely focused entrepreneur.
I like his irony, his openness and the fact he is never short of smile on his face.
Yoni could have done anything in life, anything that requires an exceptional intelligence.
Yoni is a pioneer, copied by many now and he is no short of creativity, vision and an exceptional feeling for the best customer experience.

Marc Dowds
Marc, CEO of Trov, is discover of my friend Peter(Van) at one of the Sibos(Es) – I think it was Toronto – and we talked about ideas for hours… Since then, we spend more time in trying to meet than actually meeting. Marc is a tech enthusiast. Someone who knows how to build – and exit, for sure – businesses and he has the power to explain with an irresistible clarity the most complex issue. Love his brain and how strong is our bond even without seeing each other much

Thomas Deluca
Thomas – CEO, Former AMP now… 2 different names will let him explain – and I met for the 1st time at the Gym of an IFC event. Then Innotribe, then we (SBT) became his main investor in the first round. Thomas is not the typical startupper. He is a business builder and inspires the confidence a financial institution needs to trust his company.
Humbleness, vision and cleverness in the same person. I love it.

DJ Didonna
DJ – CEO, EPL – is also an Innotribe Alumni. The passion for what his idea does is very deep and so is the understanding on the market. He knows – extremely important – how to surround himself with talent. DJ is driven by his mission, not by the money, which makes his personality really special.

Jilliene Hillmann
CEO, Realty Mogul, Jilliene is a true strong personality combine with an achiever mindset that makes her really special. I spoke also about her in the Fintech Women post few weeks ago. Her assertiveness, her expertise and the way she communicates what she does make her really special. I was captivated the minute she started presenting, I still remember it.

Shivani Siroya
Also starred in another post, Shivani is the co-founder of Inventure. She looks like a university student but is an illuminated CEO, driven by the impact that her start-up is bringing to the lives of developing markets people. So bright.

Alex Sion
Moven co-founder, not an easy place to be as Brett is taking a lot of place (and the reason why I don’t feature Brett as an entrepreneur is the reason why I don’t call Roger Federer a Tennisman). Alex is a powerful tech savvy with great marketing skills. Rare combination.

Paolo Galvani
Italian international entrepreneur, Founder of MoneyFarm, very competitive market, Paolo inspires trust and breath cleverness. Not because we have the same passport, I promise.

Michael Kent
No Bullshit CEO of Azimo, I love Michael. Pragmatic, market savvy to the max, smart and could teach many VC partners on how to conduct DD on startups.
I also – simply – love his style and the velocity at which his mind works.

Robert Bell
Rob – CEO, KlickEx – is a fantastic person to start with and so brilliant that sometimes he needs a translator to really make himself understood. (Although a translator should have very high IQ as well). We have met so many times. I coached his pitch as many times and yet he keeps changing and being more and more successful with his idea. A Genius Entrepreneur.

More to come

 

Stay Tuned

Matteo

Team-recipe

Team recipe 

I have been thinking a lot what a team actually need to succeed, and this came out on a personal story. I failed a couple of start-ups before, as a founder. In both cases coming up with the idea and bring that idea to life with very little or no resources and in both cases fail to scale, learned a lot and only few years later realising why.
I like to think I am creative and developed a network to be able to get things done, but I clearly miss “being relentless”… Meaning focusing on getting that project done because of a sense of boredom, of “not challenging enough” or simply because another idea, twist of the project itself or opportunity came up and my brain was instinctively attracted to that, with no other option than de-focus on the previous one (my dear friend Mariela thinks I should have an Impresario).
Despite that, I have – always – a very clear vision where the “thing” should go.

Does a start-up team need somebody like me ? Possibly.
But what else ?
Agility and Creativity are essential in a start-up team. So is the Vision.
But there are 2 other assets you cannot miss for the perfect recipe : financial control and project management.

As boring as these 2 assets might sound, in a small team these are essential. And the more the company grow, these are the ones who will ensure stability (and reinsure the investors).
Financial Control will also evolve and overstep into the Marketing function and a project management will closely beef up the sales (typically something that the “visionary” can or should do).

We actually had this discussion at a round table las week in London and many of the start-ups CEO and co-founders seemed to be mindful of this quest for balance.

Why is this discussion so important ?
Being an investor means finding yourself on the good side of the money, as I always say. The job seems relatively easy, especially if you don’t have to do much effort to build a deal flow (no later than yesterday I received the email about the Innotribe Challenge judging task, there are 180 companies eligible to be screened, great job BTW).

There are several moments in the life of a portfolio, when one or more start-ups become a “problem” for a number of reasons :
– strategy re-thinking,
– our of cash and pressure to raise,
– resources issue,
– management frictions.
And the list goes on….

Now : in this moment, the founders start calling you every 4 hours, send you tonnes of information because they feel they have to show they do stuff, and you get involved in the smallest possible management decisions of the company (including of course the tough ones).
In these moments, your ability to bond with the team is essential, because you all of a sudden become part of it for real (not only on paper because you are a shareholder).

The challenge is to find the emotional energy to have the same commitment, focus, brainpower to help all portfolio companies at the same time and the “problem” companies with a redoubled effort.
When the relationship gets that intense, is where the balance (or the absence of) of the assets I mentioned previously becomes crucial.

Stay tuned

M

KeepCalm

Please, make HUNDRED versions of your pitch!

We had a long discussion with Mircea, my Partner in SBT Venture Capital, after we both jumped out from a call with a start-up pitching for a series A investment.

Mircea was pitched on a SME micro lending US based start-up, and he told me the guy spent 10 of the 30 minutes available in explaining why alternative lending is a good business to be, market size and opportunity.

Now, if you are talking to a Fintech investor who lives on earth and has not been hibernated for the past 5 years, you could assume that he knows something about one of the biggest trends of this business, with two recents IPOs in US, right?
Also, 3 seconds on our website would immediately help you spot we already invested in Advanced Merchant Payments, in the alternative lending field.

This is one of the reasons why we are doing the Crash Course on start-ups at FinTechStage : one of the topics we want to share with the crowd (presumably early stage, not only Fintech and seed-funded companies at best) is the most effective way to get investor attention. 

There are several parameters to be taken into the account:
– how much time you have
– who are you pitching to
– in which context are you pitching
– how do you think the person in front of you can help best
– what has this person done in the past that can add most value to what you are doing
– …. And many more…

There is a fact: in Fintech, today, there are more start-ups than available funds, especially if you want to get funded by someone who – on paper at least – has the right connections and experience to help (even though many entrepreneurs would take any money, and it s fair enough, I made this mistake before as well).
What does it mean?

You have to stand out from the crowd, from the 3/4 daily pitches we all get, especially in a round where you are asking an investor to value your company three to ten times your current revenue and you cannot commit you will get there because there is not enough evidence to demonstrate it.

So the first thing you will get money for is how smart, empathic, resourceful, well prepared and mindful of your counterparts YOU will be.

Not your pitch, YOU… well, your fundamentals have to be sound as well, of course. But in most cases, unless you have invented something that NO ONE else has done, there are other parameters that might get you funded. And most of them you can learn how to prepare.

Stay tuned

Matteo