CAPITAL INSIGHTS a newsletter from Capital Venue.
What is your personal mission as a venture capitalist?
To grow manufacturing and other service sector jobs that offer good quality jobs and access to promising careers.
What kinds of roles did you hold before you got into Venture Capital? Were you an Entrepreneur? If so, why did you decide to cross over?
I have an entrepreneurial background as the founder of a housing development group in Concord NH and a statewide workforce group along with experience in all three sectors - business, nonprofit and government. I admire entrepreneurs because I like to work with "doers" where principles are put into action. The role of investor developed when I saw it as a way to combine my interest in strategic growth and organizational development planning and my passion to help grow long-lasting companies that offer good jobs.
Number of Deals that received investment in the past 12 months:
1 deal
How many of these were new investments?
It was an acquisition that allowed an entrepreneur to buy an existing 10 year old-business to grow it to its full market potential.
What's your career investment batting average?
One for one. Our first deal was in the machine and tool industry which experienced an industry-wide 18% decrease in 2003. In contrast, our portfolio company will at least match last year's 10-year-best, sales record. A solid first year, given the transition and soft market.
What role does technology play in your selection of investments?
We are not positioned to do startups, and do not screen based on technology but it often plays a part in establishing a unique competitive advantage that can fuel expansion.
How do you assess the caliber of a management team?
I have found that the caliber often correlates to self- knowledge, so I simply ask for their self-assessment. If that is corroborated through experience and employee feedback, it builds further confidence. While skills and experience are important, I also look for management teams that have a "win-win" attitude toward all their stakeholders - customers, employees, suppliers, and investors. And finally, it is important that the team is in it for the long haul rather than a quick flip.
How do you validate market size for a potential portfolio company?
We do an industry analysis early on in due diligence and at the end of the process ask to speak directly to key customers when we are about 99% sure that we will make an investment.
Has your investment mentality changed with the economic downturn?
No, because we look for the growth potential over the long-term. No matter where we are in the economic cycle, our analysis assumes that there will continue to be up and down periods.
Venture capital is thought to be still far from an efficient marketplace; do you see that changing?
Small manufacturers often need capital to grow to the next level. We are trying to be useful to those businesses who find themselves caught between banks and venture capital. They have maximized what they can get from the bank, but don't offer the size of the deal or hockey stick type growth to get the attention of VCs.
We are more risk tolerant than banks and offer a "kinder, gentler" form of Venture Capital.
Advice to Entrepreneurs:
Follow your passion, prepare for success, and invest in your employees so that they can invest in you.
What do you do for fun when you are not working?
Play hockey 2-3 times per week and enjoy family time.
Vested for Growth
7 Wall Street
Concord, NH 03301
Tel: 603-856-0729 Email: jhamilton@vestedforgrowth.co
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