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Here comes 2020 (and what I’ve been up to for 3+ years)

Almost three years ago I wrote a blog post titled Hello, 2017. That was the last blog post I wrote. Since then I’ve been completely heads down building Highline Beta. It’s been quite the journey. Building a startup is basically an all-consuming experience, physically and mentally. The ups and downs are so intense, and so […]

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Almost three years ago I wrote a blog post titled Hello, 2017. That was the last blog post I wrote. Since then I’ve been completely heads down building Highline Beta. It’s been quite the journey.

Building a startup is basically an all-consuming experience, physically and mentally. The ups and downs are so intense, and so quick, and in such rapid succession, that you can very easily lose yourself in the process. There’s a reason that so few people start new companies–it’s an insane thing to do. I’ve never thought of starting a company as risky per se (as long as you don’t re-mortgage your home, take on vast amounts of credit card debt, or really get sick) but it is not for the lighthearted.

As I look back on 3.5 years of Highline Beta, it’s basically impossible to parse out everything. Without question there has been incredible learnings (many of which I hope to share someday). Lots of wins. Really big wins. And lots of mistakes. Any founder that tells you they’re not making mistakes, pretty much on a daily basis, has convinced themselves of their own lies.

(Some of) the Wins

In November 2019, we announced the first close of our fund. That was an incredible milestone. I’m now a VC. Who’d a thunk it. Granted, raising a fund was always part of the plan, but when that first close happens it’s still pretty unbelievable. Raising a fund is a very intense commitment. You’re now in it for 10+ years, which sounds like a long time but will probably feel like 10 minutes (and sometimes 100 years!), and you have to generate a return for your investors. You’re “playing” with a lot of other people’s money. I don’t take that responsibility lightly. Having once inadvertently offended one my angel investors (from when I was running Standout Jobs), and then investing personally in 17 startups (and seeing the good, bad and ugly), you take this sort of thing seriously.

We also spun out a company, Relay, in partnership with American Family. When I announced Highline Beta back in 2016, startup co-creation was a key part of our focus. The idea was (and is) to identify areas of growth with big companies, outside of their core business, and then look for opportunities to build startups in those areas. In 2020 we’re going to be spinning out more companies. We’re working on a few right now in areas that I’m super excited about.

We’ve launched several accelerator programs that are changing how big companies and startups work together. “Accelerators” means so many things to different people, and in some arenas the word is even tainted. But we’re building a model around commercialization that I know works (because I’ve seen it.) An example of that is 100+ Sustainability Accelerator with AB InBev. In just two cohorts (the second one is being finalized now), we will have helped AB InBev work with 40 startups to launch pilots, globally, and help the environment. I won’t lie, it feels pretty good to build businesses and solve real problems at the same time. You genuinely feel like you’re making a difference. Personally, 100+ has been transformative for me because it’s a powerful reminder of what a big company can do when it puts its collective mind and energy towards something that makes good business sense, and helps our global community as well. I’ve loved learning about all kinds of sustainability issues and crazy solutions that will fix them, from supply chain transparency for African farmers that need financial identities, to carbon capture technology in craft breweries, to food and ingredient producers that take spent grain and turn it into something new.

We acquired Female Funders, a platform for supporting women angel investors. This is one commitment to gender diversity in a world that is sorely lacking in it. There are simply not enough diverse angel investors. The same holds true for diverse founders. A lot of energy is going into founder diversity, which we strongly believe in. We decided to put a significant amount of our effort into investor diversity. Simply put, diversity = winning. I’m not super involved in Female Funders day-to-day, but I love what it stands for and where it’s going. It’s taken time, but we’re on the cusp of scaling our efforts in this arena and it’s going to be amazing.

Highline Beta continues to iterate on its service/product offering and go-to-market. We’ve had some nice wins here, but lots of learnings too. And missteps. Our business isn’t a simple 1 product or 1 service thing–it’s somewhat nuanced, adaptable and fluid. Building a brand in an ever-crowding market where you have innovation consultants, venture studios, innovation labs, independent consultants, accelerators and more, is hard. What are we? Who are we? What do we do? When? Why? Dammit, figuring this stuff out ain’t easy. I’ve seen many startups struggle with this, and we’re no different. Many startups aren’t even truly sure what problem they’re solving–at their very core–and then it feels a bit like wandering the desert.

This Stuff is Hard

One of the things I try and keep top of mind as we face these types of challenges is the notion of outcomes over outputs. It’s not too difficult to do stuff, make stuff, or keep busy. Creating value is a whole other ballgame. I recently read Outcomes Over Output by Josh Seiden, which is a short read (few hours) but poignant. I shared the book with a couple of members on our team, and actually we should all read it (probably a few times.)

You Forget What You Knew

When you’re in the middle of building a startup it’s easy to forget everything you’ve learned about building startups.

For example, true scale takes 7-10 years. If you look at most of the really successful startups (or beyond-startup companies), they’ve been at it for a decade. Airbnb is a great example of that. Nothing is built in a day. And if the foundation isn’t solid–which btw, takes a long time to build because you’re going to screw it up a bunch of times–things will eventually crumble. So you build. Brick by brick. Then a couple bricks are crap, and you replace them. Or you put a few bricks in the wrong place, and you have to tear them out and restart. Over and over. There’s no secret formula. No silver bullet. Anyone who tells you there is, is a flat out liar.

Another example: You will spend more time doing things you don’t want to be doing than you realize. It almost doesn’t matter what you like and don’t like, just be prepared for the fact that a good portion of your time will be spent on things you don’t like, because those will be things your startup needs. Maybe it’s managing cash flow. Or recruiting. Or sales. Or operations. When I find myself in this situation, I try and focus on the big picture, the vision of what we’re trying to accomplish. I focus less on the work itself and more on what that work will help us achieve.

One more example: Pivoting is very, very real. And the hardest part of this job is decision making. What seemed like a good idea 6 months ago goes in completely the opposite direction now. In the early days (even 2-3+ years in) there are so many unknowns that you have to make a lot of decisions based on gut and instinct. There’s some data, but never enough. And you have to move fast. So you pick. And then when you realize you’re wrong, you pivot. New data comes in, circumstances change, etc. I don’t think there’s been a single startup in history that hasn’t pivoted (there probably is, but this is a moment for being dramatic.) Sometimes the best decision is no decision at all. Take a breath, pause and think. Strategy is sometimes a bit of a dirty word early on for startups, but in absence of one you’re just running and executing, but perhaps not building as solidly and smartly as you should. So change is real. It’s the one constant. And it’s spurred by external and internal factors, some of which you can control, many of which you can’t. I try and remind myself that the whole thing is a learning process. When you stop learning, you’re probably toast. Back to the basics. Build. Measure. Learn. It’s so hard to do, but when done right, it genuinely works.

The Future is Bright

When I started Highline Beta with Marcus Daniels and Lauren Robinson, I was pumped. It’s all ahead of you. All vision and chutzpah. You’re selling the dream. But in reality when you start a new company you don’t have a heck of a lot. Maybe you have a validated problem. You’ve got a small team. But you haven’t truly proven much.

Three+ years later and reality sets in. Things look a bit less shiny. You’re three years older. Gray hair starts to creep in. Shit happens. But in actual fact I’m more excited about Highline Beta now than I was 3 years ago. Day in day out, it doesn’t always feel like that (*laugh*) but we’re building an actual foundation. Piece by piece. The fund is there. We’ve spun out a company and we’re working on several others. We have a foundational, core team that is charging ahead to crystallize Highline Beta’s value proposition and prove our value to customers, every single day. The assets are falling into place, which you need if you have any chance of scaling.

We’ve worked on some awesome initiatives, with great clients and crazy smart, ambitious people. We’ve helped huge companies genuinely innovate and push the boundaries of what we all thought was possible, whether it was pursuing new markets, new business models, hiring, incentive models, etc. New innovation systems are being built within companies that we haven’t really seen before. Being a part of that is pretty cool.

Connecting Dots

I realize now, 3+ years into this that Highline Beta is in the business of connecting dots.

You actually never know when the right ingredients come together to make something special. It could be an idea within a large company. Or a person that wants to build something new. It could be the combination of a growing trend, a startup building tech in that space, and a corporate partner that wants to invest. I’ve been surprised many times with respect to where opportunities lie, and how you can connect dots for customers, users, startups, partners, etc. when you put yourself in the middle of many things.

We’ve been lucky at Highline Beta to work across many different industries. We have learned a lot. We’ve worked in insurance, health care, mobility, banking, home & proptech, CPG, and more. When you go into an industry as a newbie you get to ask all the dumb questions. Eventually the questions become smarter, and the opportunities start to emerge. You start to see patterns and your Spidey sense kicks in. Deals start happening and you’re off to the races.

I love learning about new industries. More specifically, I love understanding the problems in those industries at a very user/customer-centric level, because that’s when you can build something great.

And now things are coalescing. We’re seeing the same challenges over and over again inside large companies and we have answers. We can solve real problems. Patterns are emerging that give us the confidence and ability to deliver even more results for clients, startups, and our investors.

I also think there’s a book in here. It’s been 7 years since Lean Analytics was published. I wasn’t sure I would ever write another book, and maybe I won’t, but Alistair Croll and I have started talking about it. And I’ve got a separate book idea based on a lot of the stuff I’ve now seen that I think could truly help corporate innovators everywhere. We’ll see if 2020 is the year.

I truly love writing. My team groans every time they get an email from me, because they’re often small manifestos of crazy…I can only imagine what they think when they’re scrolling through. But long form content is important. At least to me. The idea of putting yourself out there, sharing your thoughts in a deep, meaningful and strategic way feels right. Sometimes you feel inspired, or just need to get some things off your chest. Having said that it might be another 3 years before I write another blog post, because I’ve got a lot of intense work ahead of me. We all do at Highline Beta, and I’m excited to take it on and win.

I want to thank everyone that’s helped Highline Beta get to this place. Our investors, partners, clients, friends, family, team and more. Happy Holidays and have a kick ass 2020.

Source: http://www.instigatorblog.com/here-comes-2020/2019/12/20/

Private Equity

Two weeks left to score early bird savings at TC Sessions: Space 2020

NASA just made history by landing a spacecraft on an asteroid. If that kind of technical achievement carbonates your glass of Tang, join us on December 16-17 for TC Sessions: Space 2020, an event dedicated to early-stage space startups. We’ve launched early-bird pricing, and $125 buys you access to all live sessions, plus video on […]

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NASA just made history by landing a spacecraft on an asteroid. If that kind of technical achievement carbonates your glass of Tang, join us on December 16-17 for TC Sessions: Space 2020, an event dedicated to early-stage space startups.

We’ve launched early-bird pricing, and $125 buys you access to all live sessions, plus video on demand. Don’t procrastinate. Buy your pass now before the early-bird reenters Earth’s atmosphere (and prices go up) on November 13 at 11:59 p.m. (PT).

More ways to save: Go further together with early bird group tickets ($100) — bring four team members and get the fifth one free. We also offer discount passes for students ($50) and government, military and non-profits ($95). Looking for out-of-this-world exposure? An Early Stage Startup Exhibitor Package ($360) includes four tickets, digital exhibition space, a pitch session to attendees and the ability to generate leads. Bonus savings: Extra Crunch subscribers get a 20 percent discount.

TC Sessions: Space is an unrivaled opportunity to learn from, connect and network with boundary-pushing founders, investors and officials from NASA, the Aerospace Corporation, the U.S. Air Force and leading space companies spanning public, private and defense sectors.

We’ve packed the conference with outstanding presentations, fireside chats and interviews. Plus, you’ll find breakout sessions on specialized topics, audience Q&As with Main Stage speakers and the expo area for partners and early stage startups.

Here’s a taste of the topics but keep an eye on the agenda, because we’ll add more speakers and sessions in the coming weeks.

Asteroid Rocks and Moon Landings

Lisa Callahan, vice president/general manager of commercial civil space at Lockheed Martin Space, discusses all aspects of scientific and civil exploration of the solar system — from robots scooping rockets from the surface of galaxy-traveling asteroids, to preparing for the return of humans to the surface of the Moon.

Sourcing Tech for Securing Space

Lt. General Thompson is responsible for fostering an ecosystem of non-traditional space startups and the future of Space Force acquisitions, all to the end goal of protecting the global commons of space. He’ll discuss what the U.S. looks for in startup partnerships and emerging tech, and how it works with these young companies.

Bridging Today and Tomorrow’s Tech

Corporate VC funds are a key source of investment for space startups, in part because they often involve partnerships that help generate revenue, and because they understand the timelines involved. SpaceFund’s Meagan Crawford and Lockheed Martin Ventures’ J. Christopher Moran discuss how these funds fit in with more standard venture to power the ecosystem.

TC Sessions: Space 2020 takes flight on December 16-17, but we’re starting our early bird countdown right now. Great savings disappear in two weeks on November 13 at 11:59 p.m. (PT). Buy your early bird passes today and celebrate your savvy shopping with a tall glass of Tang.

Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.

Source: https://techcrunch.com/2020/10/29/two-weeks-left-to-score-early-bird-savings-at-tc-sessions-space-2020/

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Leon Black offers more details on ties to Jeffrey Epstein – Update

Apollo chief executive raised the issue after questions swirled about his relationship with the late financier

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Leon Black, the billionaire chief executive of Apollo, on Thursday, 29 October, offered a history of his ties to the late financier Jeffrey Epstein, his most detailed public account yet of a relationship that sparked renewed concern among his firm’s shareholders and fund investors in recent weeks.

Epstein was indicted last year on federal sex-trafficking charges involving underage girls.

On a call to discuss the private equity firm’s third-quarter earnings, Black said he wasn’t eager to speak publicly about his personal business, “but this matter is now affecting Apollo, which my partners and I spent 30 years building, and is also causing deep pain for my family.”

The Apollo chief reiterated that he paid Epstein millions of dollars annually to provide professional services to his family partnership and other family entities, “involving estate planning, tax, structuring of art entities and philanthropic advice” from 2012 to 2017.

He said there was substantial documentation of the work and that it was vetted by law firms, accounting firms and other advisers.

“There has never been an allegation by anyone that I engaged in any wrongdoing, because I did not,” Black said. “And any suggestion of blackmail or any other connection to Epstein’s reprehensible conduct is categorically untrue.”

Black also re-emphasised that Apollo never did business with Epstein, who died by suicide in jail in August 2019, the New York City medical examiner found.

The speech came after the three Apollo board members to who make up the New York firm’s conflict committee last week hired law firm Dechert to conduct an independent review into Black’s business with Epstein. Black said he asked for the review and is cooperating fully.

The moves were prompted by a New York Timesreport on 12 October that Black had paid Epstein at least $50m — more than previously known—in the years after Epstein was convicted in 2008 of soliciting prostitution from a teenage girl.

The article didn’t present any evidence that Black participated in inappropriate activity, but it sparked concern among some of Apollo’s public-pension fund investors and has weighed on the company’s shares.

Apollo’s shares rose briefly after Black’s statement but later fell about 1% in morning trading Thursday, 29 October.

Black, who co-founded Apollo in 1990, said he met Epstein around 1996 when Epstein was advising a number of prominent clients on estate-tax planning. The adviser had been named a trustee of Rockefeller University and served on the Council on Foreign Relations and the Trilateral Commission.

In his network were “luminaries I respected and admired, including several heads of state, heads of prominent families in finance, a US treasury secretary, accomplished business leaders, Nobel laureates, acclaimed academicians and noted philanthropists,” Black said.

The Apollo chief said he wasn’t aware of Epstein’s criminal conduct until it was reported in late 2006 that he was under investigation by state and federal authorities in Florida.

In 2007, Epstein signed a federal nonprosecution agreement, which has since been scrutinised, to resolve that investigation, pleading guilty the following year to two state prostitution counts. He spent much of his 13-month sentence outside prison.

After his release, Epstein went back to his financial-advisory work and once again began associating with prominent people from finance, academia, science, technology and government,  Black said. He said he didn’t learn the extent of the further allegations about Epstein’s conduct in 2018 until after he had already stopped working with him.

“Like many other people I respected, I decided to give Epstein a second chance,” he said. “This was a terrible mistake. I wish I could go back in time and change that decision, but I cannot.”

Whether Black’s explanation and the independent investigation will be enough to satisfy the firm’s jittery investors remains to be seen. Working to Apollo’s advantage is the fact that big pension funds, which typically need to invest large sums of money, have relatively few options for where to do so. And Apollo’s funds have continued to offer them strong returns.

Any defections among investors could theoretically threaten the firm’s goal set last year of reaching $600bn in assets over the next five years. For now, growth in the metric is chugging along. The firm said that assets climbed to $433.1bn in the third quarter, up from $413.6bn in the prior quarter and $322.7bn a year earlier.

Apollo chief financial officer Martin Kelly said the firm’s assets were durable even if the independent review of Black has an impact on fundraising. He noted that 60% of Apollo’s assets are in permanent-capital vehicles—pools of money that don’t need to be constantly replenished—and 90% are either in permanent-capital vehicles or funds with five years or longer from inception.

Kelly said the firm expects some of its investors will pause new commitments until the independent review has been completed. But even if Apollo raises no additional third-party capital this year, its fundraising of $18.4bn from third parties through 30 September already falls within its typical annual range of $15bn to $20bn, he said.

“We have incredibly long and durable relationships with our clients,” Apollo co-founder Josh Harris said on the call. “We’re deeply in contact with them, and obviously they are awaiting the results of the review Leon discussed.”

In response to an analyst question about how long the review would take, Apollo said it hoped the process could be completed by the end of the year, but that it was in the hands of the conflict committee.

Apollo also reported lower net income and distributable earnings for the quarter. It posted net income of $272.4m, or $1.11 a share, down from earnings of $363.3m, or $1.63 a share, a year earlier. The decline was primarily driven by a bigger loss attributable to noncontrolling interests.

Fee-related earnings were a bright spot, climbing 30% year-over-year.

Apollo invested a net $20.9bn across its various investment platforms during the quarter, a metric that reflects investments in vehicles beyond traditional drawdown funds.

The firm said it would pay a dividend of 51 cents per share versus 50 cents a share for the third quarter of 2019.

Write to Miriam Gottfried at Miriam.Gottfried@wsj.com

From The Wall Street Journal

Source: https://www.penews.com/articles/leon-black-offers-more-details-on-ties-to-jeffrey-epstein-update-20201029

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Private Equity

Alternative Investments/ESG: Brunel Allots £1.2B ($1.55B) Sustainable Mandate To Three Managers

The Brunel Pension Partnership has picked Ownership Capital, RBC Global Asset Management, and Nordea Asset Management to manage its new Sustainable Equities Fund of around £1.2 billion ($1.55 billion). Brunel is one of eight pooled Local Government Pension Scheme funds in the U.K.

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Alternative Investments/ESG: Brunel Allots £1.2B ($1.55B) Sustainable Mandate To Three Managers

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The Brunel Pension Partnership Limited (Brunel) launched a new Sustainable Equities Fund for local authorities’ pension funds.

The Brunel Pension Partnership has picked Ownership Capital, RBC Global Asset Management, and Nordea Asset Management to manage its new Sustainable Equities Fund of around £1.2 billion ($1.55 billion).

Brunel is one of eight pool Local Government Pension Scheme funds in the U.K.

The sub-fund mandate is on behalf of 10 local government pension scheme funds. They wanted a listed equity portfolio with a pronounced skew in favor of ESG considerations. The emphasis would be on companies with positive ESG performance rather than negative exclusions. (Institutional Asset Manager)

Multi-manager sustainable fund

Brunel shortlisted the three managers from 70 expressions of interest.

“The three managers we appointed share a broad investing style and a prioritization of sustainability, yet their approaches are also different enough to provide clients with the diversification they were looking for,” said David Cox, Head of Listed Markets at Brunel.

“We were delighted to find managers who share our understanding of sustainability, embedding it deep into their culture and investment processes,” says David Jenkins, Portfolio Manager for the Sustainable Equities Fund. “This portfolio, therefore, meets our aspiration to go beyond traditional Responsible Investing and ensure that the managers are engaged with the companies and are investing in them for positive reasons, not simply focusing on negative exclusions.”

Investment thesis

The portfolio is significantly underweight to the GICS energy sector. It also features an aggregate carbon intensity that is significantly lower than its benchmark, the MSCI All Country World Index.

The selected managers will integrate ESG considerations into their whole investing process. Their focus will not be to manage ESG risks – rather to positively seek out exposure to companies on a sustainable path.

In the process, they would also generate a suitable financial return.

Related Story:  Insurers Take a Fancy To ESG & Sustainability ETFs (Invesco)

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Source: https://dailyalts.com/brunel-allots-1-2b-1-55b-sustainable-mandate-to-three-managers/

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