To have the privilege to be in on the ground floor of new companies or new technologies created by leading individuals in an industry can be one of the most rewarding and gratifying experiences. The development and growth of mankind is driven by these vary forces. These situations are not only rare and difficult to identify, but also difficult to have access to.
Through key contacts in specific growth industries, Cobalt Capital is constantly alert to these extremely high return opportunities. But opportunities like this also carry risk. Should you invest? How do you know how a given opportunity fits into the global vision of emerging technologies?
The professional staff of Cobalt Capital clearly shares your concerns. In addition, our professionals will help you evaluate your acceptable level of risk in relation to the opportunities at hand. In gauging these various factors, the first place our staff begins is with analysis of opportunity itself. Through accumulated experience, several key factors have been identified over time:
Key Factors for Venture Investment
Is the target industry in a mode of growth, transition, or a mature industry? A growth industry is a leading indicator of future prospects. On the other hand, an innovative idea, no matter how good, will not have access to an expanding market in a mature industry, and is therefore is not under consideration here.
Are the marketing and sales plans in place to allow effective announcement and distribution of the technology. Are the logistics of implementation in place, and are the resources available to address early stages of introduction and thentransition into support for broad market growth and sustainable dominance.
What are the barriers to entry for competitors once the idea is out? Will others have easy or difficult entry into the market, and does the business plan detail the possible change over from a position of market innovator to long term market supplier and dominator.
If the investment is technology based, is the nature of the technology such that it will be viable in a reasonable time frame? What are the expectations and dependencies that might influence the time frame.
Does the market have a projected value of $500 million within the first few years. If the market seems smaller does the investment have a very strong proprietary, trade secret, or technology patented position in the market place?
What are the start-up costs, staffing costs, and initial production costs? Are they sustainable and will they yield a profitable and therefore strong position in the market?
If the opportunity addresses a relevant problem, is the infrastructure in place to support the idea?
Does the staff have a solid track record, or experienced management to guide technically fresh and qualified individuals on their journey?
At what stage is the emerging market? Are there potential competitors and do they measure up to this investment?
With these ten areas probed and documented, the opportunity for investment is scored relative to other Venture Capital candidates. The results are passed between members of who have researched competing opportunities and the results and evaluation are cross checked. This care and scrutiny provide you with the picture you need to evaluate the opportunity and the level of risk.
From several investments which may be available at any given time, our professionals work with you to evaluate which opportunity provides combination of risk management and growth potential with which you feel comfortable. These efforts are also factored with other investments in your investment portfolio to provide a balanced yet highly profitable wealth management system.
IPO or Privately Held?
Getting in at the ground floor is quite an advantage. Most successful Venture Capital investments lead to an IPO. In this case your investment is sought world wide. The other successful scenario is the company maintains it’s market position by maintaining the formula for operational success and management which gave it birth. These rare instances of success still often yield after time tothe need for an IPO to support yet greater ideas or market penetration.