Streamline deal flow management in Affidavits

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our founder and CEO Richard Wilson everybody thank you round of applause thank you Honduras I hope everybody enjoyed lunch I'm now gonna talk about what we hear over and over again over the past 12 years at our events is that families don't invest in one out of every ten deals they see they don't invest in one out of every 50 or even every one out of hundred deals they see it's really one out of every 300 or 400 or 500 many families see hundreds of deals a year and they close one or two deals per quarter I know there was a one investor meeting that just happened outside where they might place a thirty-five million dollar allocation but they might be only making four of those investments over the entire year but it's a big investment so I want to talk about this cuz I was thinking what could I share that I haven't focused specifically on enough at our events that would appeal to everybody in the room it doesn't matter if your private equity fund a real estate developer or a private investor and it's this very topic so I found that if you meet with a private investor and they do not have any deep flow the very fact that they're seeing one deal is an anomaly in itself because they're not used to seeing deal flow they're not used to being able to invest in a private company and so if you're working with somebody who you meant at the golf club and they're worth five million dollars and they only get two investment options per year they might think both look pretty good because it's pretty exciting compared to the stock market or it's exciting compared to just working day to day running their business or working as a professional if you're working with a family office gets thousands of deals their definition of an anomaly is going to be very different and then there's family offices and investors that are all in between so many of you know the family office Club already but probably about a third of the room this is your first event ever with us so thank you for joining us so there's no confusion as a member you get access to all 32 events per year as a premium member and it doesn't cost you anything extra to come to our events and nine of them are investors it's like this 20 of them are very fast-paced training workshops just like the one had at the raffles Hotel in Singapore about two and a half weeks ago and every year we're in San Francisco London New York Miami Dallas Singapore etc so the first point I wanted to make with anomaly deal flow is that if you think you have good deal flow and you just start investing in that that might stop you from getting great deal flow you might say you might say I'm like one of my friends had an exit to a publicly traded company for 50 million dollars and he said oh we're seeing a pretty good deal flow have probably seen 40 deals over the past three years but if you talk to a lot of family offices they see that many deals you know per week or per month it's not all about quantity of course it's all about figuring out what your strike zone is is a family office or a private equity group or a private investor and then getting more quantity within that quality circle figuring out what are the overlapping attributes that make a good quality deal and maximizing the quantity in there and there's no way that you are not gonna make better investment decisions if you're able to review 200 deals that are all in sell storage all in the state of Florida versus looking at two you're not gonna be able to see what's the good apple bat out you won't be able to see the miche's which is more aligned which is more credible so by very definition to get a nominally deal flow you have to get a lot of deal flow and in all of 2019 the only family office that told me we do not need more deal flow at all certified true was somebody from the team of Mark Cuban's family office that doubt to me cold because of our media assets and our event in Dallas a few months ago and they said no we have portfolio companies we might co-invest with their families within our portfolio companies but we don't need more deal flow every other person in cleaning including grant cardone including kevin harrington including every one of the 75 investors you see on stage here today and tomorrow they all want more deal flow not a single one of them was paid a speaking fee they're healed here to get deals done and that's the whole point of the family office club so this is relevant for all those reasons and Jim Collins is famous in his book good to great of saying that good is the enemy of great and I think a lot of people do have good deal flow but they don't realize that it's not that good compared to family offices who have great deal flow so I kind of want to open everyone's eyes to that that it could be much much better and sometimes you know they go through some attributes of really good deal flow in opportunities so you can identify them more quickly and to share examples of this here over the next ten minutes so first of all what is what does the word anomaly really mean it's basically saying that it is not average it's not one standard deviation away it's three standard deviations away it's literally 0.3% of what you're seeing and that's why I like to use that term because again and again on stage we hear and sometimes they can sound kind of depressing for someone trying to get a deal done oh yeah we look at hundreds of deals and we only do a few but that's the whole point of the family office clubs you can follow up and make a real relationship you can come to the workshops learn new strategies and learn from each other you might learn things from each other at a workshop or at a lunch or during cocktails today from someone else doing something similar or access deals from them that's more powerful than anything you hear on stage there's part of you know learning from peers and the investors in the room who cares about getting more deal flow well if you're in investor relations then you should care because if your deal flow is excellent enough you could get referrals to your deal from somebody who's never even invested with you before but they hear what you do and it's so unique and it's so focused and so credible but they're fine introducing you to their father or to their friend or to their family office executive that they've known since they went to school and I've seen that happen many times over and so if the deal is so good that that is happening then you know you have something and that is an anomaly type deal it's one of the reasons why people like to work off of referrals they don't have to tell you about everything they're doing but if they're most excited about one or two ideas that be dull which is a one out of three hundred some reactions you want to get when you're looking at deal or if you're telling yourself that you're you're saying this to yourself is never seen that before or Wow how does that work and you want to learn more or we wish everybody offered this with one of the billion dollar plus family offices on stage here here's a client of mine we are on a call three days ago and he said those exact words he said I've never seen in 20 years I've never seen someone with this type of structure and I think it's excellent and it's no wonder that you're at fifty five million a bit of this year and you were only a twenty five million a bit eighteen months ago and they're just they're just growing very rapidly it's because of those types of you know reactions is what you're trying to aim for here's ten attributes that can help you identify anomaly deal flow when you're networking here today or help assess out of everything you're doing what are other people perceiving as a true anomaly a true special opportunity to invest and not just average or basic the first one is that it can't be common by very definition it has to be the opposite of common but I think a warning here is it's not just unique for being unique sake if you don't know your market know what your competitors are doing know what your investor complaints are and then know where the market is trending and going towards you might be unique in a way that nobody cares about you want to be unique in a way that's different than competitors and aligned with what your investors are wanting and the second thing that's an attribute is superior alignment it doesn't have to be performance only fees but it should be that you're not making money while you're investor still hasn't made any money and it should be transparent and it should be that you're paid handsomely if things do go very well I think family officers are perceived as cheap sometimes because they negotiate down fees and people say you're worth four hundred million dollars why do you care if my retainer is five thousand a month versus ten thousand a month but the thing is they haven't gotten rich by being foolish with their money and they don't want to pay the price of a Rolls Royce and get a Honda Civic with no air-conditioning it's not about the price of the Rolls Royce it's like a normal massive fluent person staying at the ritz-carlton for two nights is equal to them by Ana Ritz a Rolls Royce so I think that's something to keep in mind they're not cheap they just want to have the value aligned with what they're doing the next thing is to always have a compelling team there's never an anomally deal that has a bad team unless you're in the distressed workout area and you're looking for horrible teams with a great product and you can acquire all their IP that may be the one scenario but otherwise the team has to be amazing or excellent or it doesn't even matter what the pitches that's why earlier today and I said when people run out there IR RS and say oh it's a great return or it's low risk or worse yet they say it's no risk then the we also they're a little bit on their heels like okay but what's the context of all this because none of that matters if I don't trust you and trust that your team is with your strategy and that's aligned with the market trends and aligned with what we want to do and I think it's that integrity of all those things the integration of all that is what's powerful and the more integration or integrity there is then the better you'll do in the marketplace and the more that you'll be able to move forward that's one reason we try to everything that I say on stage our workshops or you know at this point right now are things that we're doing and these are all ideas that we try to live and we try to use you can see that in our marketing that you can see that in our op with linear adviser division we help private investors we don't charge any consulting fees no asset management fees we just take a little five to ten percent carry on deals they do through us and if one loses money they don't get charged any fees on any other deals over years or across deals so we only get paid when they're making money over the medium to long term and that's an example of just listening to what investors complain about and want and trying to design a model to fit that to show you that I'm not just trying to make up ten PowerPoint slides to kill some time because of some technical failure or something so had enough of those for today dominated a niche is a common deal flow attribute a lot of families have created their wealth through dominating a niche area so they understand that strategy which could be owning an electro property or otherwise or just a very focused private equity or real estate strategy it's much more credible to say we are a lower-middle market private equity fund that only invests in consumer product companies that are profitable into at least a million in revenue but are based in Southern California it's credible to think maybe you've got that mapped out for yourself and you kind of know who the players are there versus saying we're at lower middle market private equity fund and you know we invest in companies globally and then they look at how large your team is and it's only eight professionals and you're competing against you know apex and 20 billion dollar-plus private equity funds it's hard to make that credible pitch and I learned that when you know I started my business by just sharing information online about family offices as I was meeting with them and I kind of accidentally got on the front page of the Boston Globe and then bought family offices calm and spoke many times and that really came from me having a frustration of having a global macro hedge fund manager client but they had a very small team they had six people on the team and we were competing to it's global macro hedge funds that had people that were born and raised in China and a spoke Mandarin since birth they're gonna probably know China better than a hedge fund who says oh we've been to China twice and there's our thesis on it it's not as convincing it's not as credible it's not focused enough best in class or number one in something one thing I like to say a lot is you need to be number one in something for a very specific someone and then that is how you get them to lean forward because you're hitting them between the eyes with value somebody an investor from Spain was asking me how it started the family office Club and I said really I just I got a little bit lucky that I was sharing thought leadership it turns out the ultra-wealthy don't like responding to a lot of sales messages they want to meet the person but if they have a migraine they want to reach out and get an excedrin they don't care about any of the other vitamins or medicine on the counter at that very moment in time during that month or quarter they might look at other things but if you can be the thing that reach out to and grab when they want that leverage or that help then that's a way to build relationships the next part here has a great momentum so identifying a rising tide figuring out what's inevitable and if the deal is related to that it's much more likely to be some sort of anomaly deal if it just seems boring when you listen to it or you've heard it 500 times it's not an anomaly deal every deal that you hear this an anomaly should be exciting to learn about and make you lean forward I also should not be confusing it really can't be confusing and be exciting at the same time these are some examples I'm not gonna read off each one because the slides are going to be in the thank you email but it's just one example is a company that had a hundred million dollar valuation by a CEO built it from scratch he's now building the same exact company from scratch a second time but now he has a majority equity share and so the minority and he's much more motivated and he's done the exact same business model that's rare usually people have just parallel experience another example is a income investment model but it is act by the credibility and collateral of a 50 million a bit of plus company they make their monthly distributions like we heard on stage Grant said you know investors love that another example are I've done three gross revenue of royalty investments and we just closed an investment with our carrot client two weeks ago structuring it as a gross revenue royalty in consumer product companies that's very unique and on stage in twelve years one investor in London has brought up gross revenue royalty structures while deals maybe others are doing them but it's really not talked about much so it's unique to find that type of an opportunity and the last example I'll give is um a group which is here today and they had five hundred million in a um when I meant them three and a half years ago and I meant with them for two hours after one of our events I said I've never seen someone do what you're doing and it's go amazingly well they were true anomaly in my mind and right now they're at over two billion in assets just three and a half years later and they're raising two hundred fifty three hundred million dollars a year in their model because they're in a focused geographical area good quality assets good team but they also have a unique feed structure and that they're not offering a management fee or performance ease they take an equity bump another ten percent take an equity bump and then they just ride along with the investor and everyone says why don't you charge me a 10 percent carry on the back everybody does we don't care if you do they said we don't want to stop raising three hundred million dollars a year no one else is offering our model so that's the type of stuff that I try to look for and I thought that'd be useful to share with the audience here for your own funds for your own investment management portfolios for you as a private investor of just how do you only work on the white space the true anomaly opportunities you know to everything else so you have the time and energy to really double down on where that empty space is where it's not overly crowded so here's a picture of my team we have about a thousand speakers that we've had on stage in the last twelve years we have done a hundred and thirty live events and meant well over twenty five hundred family offices in person fifteen different countries so I'm glad that you're here today I hope you can consume some of the four or five books have written on family offices or most recent one called sent a millionaire strategies you'll get those in the thank you email as well and please use my team as a resource one thing that almost everybody ignores and forgets to use is that as a member you can submit your materials every single quarter every three months from whenever you submitted them last and will read every word of them and give you two to four pages of feedback and here's what I would change here's 20 different suggestions and then you might not like a few of our suggestions maybe you won't be practical but there'll be five or 10 ideas in there you could implement right away and then three months later you can submit your materials again and that gets you more value of your membership at no cost it also allows us to get to know you and it really through clients of pitch Dexcom and really through those capital-raising audits we call them through the membership portal that's how the things get into our brain of it's not just a shaking of a hand as we walk out the door and then I sort of put a face with a name it's really we've read all your materials now we can keep you in mind if there's someone else - you know joint wind venture with here or an investor to connect you with you know it helps us add more value and know who our members are at a really deep level so I'd encourage everybody to use that membership benefit helps us and it helps you and will help things move forward and family offices want you to have this advice and feedback that's why they share it on this stage because it makes their life more efficient when you use these strategies and use things like a one-liner etc so here's the calendar you can always get this at family offices comm so please look there for the updated schedule these are events just through the first half of next year so we have 32 events and nine different cities next year wherever you're based you're probably doing business in one of the cities where we're hosting events so I'd love to see you at at least one event per quarter some people like to come to one and a half or two events per quarter on average so I'd love to see you there and thank you for your time and attention at the event we're gonna get moving through the agenda now and I'll welcome Andres back up as our afternoon emcee so thanks for being with us here today