Congrats on the buyout by FundingUniverse. Blake’s a great guy and they’ve got a lot going on.

Good luck!

David

I think you can probably write the same thing about our industry while substituting “Sales Revenue” with “Assets Under Management.” Technically, the two are highly correlated, but for some reason, businesses in this industry seem to be way more externally and internally fixated on AuM.

As someone who’s been a part of a fund that went from $500k to $400 million and back to $70 million over 25 years, and watching Kyle lead a fund from zero to $30 million in about 6 months, I can attest that growing a business is indeed a crazy ride. In investment management, it’s full of trade offs too, things like moving away from core strategies to accommodate more assets, more expensive staff & infrastructure to handle a bigger portfolio, and linking up with third party marketers & managers to grow assets further.

It’s never perfect, and “pretty good” might be the best a rational individual can hope for. The key, however, is always that push to be better and a list of factors like those you mentioned.

Anyway, part of getting sales from $10M to $100M is making sure that your business doesn’t blow up or collapse under its own weight somewhere along the way if there’s a sales setback. That journey of growth isn’t always a straight line. Are the proper mechanisms and structures in place to keep the business afloat if sales go from $50M to $25M?

Some of those things might include:
- Securing channels for efficient access to emergency capital before the actual emergency.
- A highly dynamic and scalable staff/technological infrastructure.
- Knowing which fixed, high-overhead, “sticky” investments are the most effective at growing the top line.

I’ve seen a lot of traders wash out over the years because they couldn’t (operationally) withstand a sharp reduction in AuM. It’s too bad. Some of the best and most profitable trading business are those that have had a major drop in assets somewhere in the history of their growth and lived to tell the tale. Generally speaking, I’d rather invest in a manager who’s survived a rough patch or two than one who’s never known the challenge of a crappy year. The former guy is usually the better bet for future growth.

I suppose that’s really the story of the serial entrepreneur, right?

Launch a business. Fail, learn. Launch a better business. Fail, learn. Launch the business that gets you from $1M to $10M, the one whose failures show the secrets to getting the next one to $100M.

I appreciate your insights… I know there’s a lot of ugly ahead (there already has been), but that gives me hope to know that it’s worth it.

I’ll have to keep reading (and maybe read some old posts)- you’re doing exactly what I want to do (serial entrepreneur)… though sometimes I think I’m more of a ‘schizopreneur.’