Welcome to Candid, a short format newsletter you’ll receive every Friday in your inbox. Each week I focus on one topic, most will involve growing businesses, investing in companies, current events, or similar topics I find interesting.
I try to keep it light, add a bit of snarky humor, and I keep the shameless plugs for ROND at a minimum (after today that is).
I won’t use this as a platform to discuss my political beliefs or rant about situations, companies, or people that annoy me. However, high-profile companies with publicly available financial information are free game. I won’t be denied the twisted pleasure I get digging through S1’s and pointing out nonsense.
Next week will be a normal newsletter. However, this week, I wanted to repay the support you all have given me over the last two years by telling you first about the changes coming to ROND.
What’s Next for ROND
The initial thesis behind ROND hatched two years ago. We founded ROND to plug a gap in the capital markets for small, growing businesses seeking only a modest amount of capital.
These businesses don’t want to become the next Facebook. They want enough capital to accelerate their growth curve, take advantage of a market opportunity, and create a more valuable business.
After immersing myself at this end of the market, I can confidently say the original thesis behind ROND is spot on. There are great businesses, solid investment opportunities, and a severe lack of capital and resources to support the goals of these business owners. I’m very bullish on our opportunity to create a scalable investment platform at this end of the market over the next several years.
However, there’s been one significant learning since launching ROND that I didn’t fully appreciate when we started. “Transactions” rarely happen at this end of the market. Instead, relationships are built, and those relationships develop into trusted partnerships over time.
In short, investing at this end of the market takes a considerable degree of patience and a philosophical shift in the role of an investor. If we want to create a scalable platform, we need to do things differently.
This led to a fascinating market discovery exercise. I went back through all my past meeting notes since starting ROND and then began interviewing entrepreneurs at various stages of business.
I also did a humbling analysis to determine what exactly investors offer of value outside capital. For all the hype and BS in the market about helping grow businesses, driving innovation, etc., as investors, there are only three things we are best at:
- Assessing the risks and opportunities of a business
- Being two inches deep and a mile wide, but knowing how to identify the people who can go deeper on any given subject area
- Knowing how to access the capital markets
The last several months of market discovery have unearthed fascinating patterns and incredible insights. It has helped inform what’s next for ROND and here’s what’s next:
ROND is launching a new division called Capital Studio.
Capital Studio focuses exclusively on helping entrepreneurs better position their businesses to access the capital markets. Capital Studio takes the things that as an investor, we excel at, and repackages them in a way that adds value to business owners exploring a capital raise.
I want Capital Studio to be the first place a business owner goes when they are contemplating a capital raise because they know they will receive creative solutions that they can’t get anywhere else. We have a lot of work to do to get to that point, but that’s my vision.
My final thoughts:
A few weeks ago, a friend asked me, “Why are you doing this.”
Here’s my answer: I get a personal sense of reward out of working with the hardworking men and women who are building value for their families by growing a business. If I have the slightest impact on helping them achieve their goals, then I can wake up every day and be proud of what I do.
Have a great weekend everyone.