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Interview with Callum Laing: The Entrepreneur Exit Alternative

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So, if you’re an entrepreneur, there’s a lot you need to know about scaling your business; especially when it comes to getting funding.

If you’re looking to grow a successful business, chances are you will need to obtain more capital. It’s an essential part of building a thriving enterprise.

But it’s not easy, is it? For many entrepreneurs, it can be quite confusing.

Any founder of a company or small business owner knows that it’s tough going out there. Small businesses are the lifeblood of economy, but entrepreneurs have many challenges facing them. This is especially true when it comes to gaining the funding needed to scale.

I spoke with Callum Laing, partner at Unity Group, about the challenges small businesses face and a unique opportunity that they can potentially benefit from. Laing is co-author of the new book “Agglomerate – Idea to IPO in 12 Months”, and is a previously published author of “Progressive Partnerships – The Future of Business.” 

Laing’s mission is to make it easier for entrepreneurs and startups to get the resources they need to achieve their objectives. As an author and businessman, he has helped many business owners realize success in their funding efforts. In this interview, you will learn why an IPO or an acquisition might not be the best funding solution for your company. You will also learn alternative methods of raising the capital you need to grow your business.

What are some of the biggest challenges small and mid-sized companies face at this time?

Small and mid-sized companies, generally referred to as SMBs (Or SME’s outside of the US), usually are companies with less than 500 employees. According to the 2012 US Census Bureau data, firms with fewer than 500 employees accounted for 99.7% of those businesses.

Access to resources is always a major challenge for SMBs. Business owners struggle every day to scale. Without capital it is difficult to attract great talent. Without great talent it is nearly impossible to compete with the big companies. If they are ‘lucky’ enough to be in a position to take on investors or a bank loan to scale, the terms are normally so onerous it ceases to be attractive.

What about achieving scale through an IPO or an acquisition?

Because of the difficulty in accessing capital, business owners often believe the only way to get investment is by going public or getting bought out. However glamorous those two options may sound, the reality is much harsher and often comes at a very high price. The public hears about the shiny new “unicorn” start-ups that end up being covered in the media all the time. These include the Ubers, the Airbnbs, and the Dropboxes. But the vast majority of businesses toil away under the radar.

IPOs, acquisitions or investors all come with strings attached. In fact, those strings are often more like chains and padlocks. Business founders have to sell their soul, their dream and their control to the investor. In small business, much of the value of that business resides with the founder and her senior team. When investors come in and take control they are removing the power from the very people that got the business to where it is today.

What are the drawbacks of these options that founders often aren’t aware of?

When companies sell or merge, you often see an exodus of talent —- sometimes with key accounts. Small businesses depend heavily on the talent of key employees. A change in management philosophy and execution often creates conflict between the buyer and the bought; many M&As fail because of this.

Post-merger, you also frequently see the removal of one of the brand names, usually by the company that was bought. This destroys a lot of the brand equity carefully cultivated over the years. Most roll ups are either debt funded or investor funded. Either route creates a huge stress on the eventual vehicle.

Then there’s going public through an Initial Public Offering (IPO), which is very time consuming and costly. Public companies also need a board to run both the business and the IPO. Some IPOs are exits in disguise. The talent is either leaving or planning to leave. This can lead to building a bad reputation. In other cases, the IPO is pushing for the highest valuation because of a planned exit, or they want to raise money and thus want to minimize dilution. While there are lots of advantages of going public, IPOs are simply not a great way to raise capital for the average business owner.

Where does that leave small businesses then?

It leaves them between a rock and a hard place. This is the exact situation that our firm, Unity Group, sought to alleviate. The solution we arrived at is what we call the “Agglomeration.” It sounds like a fancy word, but it is taking the best of mergers, reverse takeovers (RTOs), roll ups and IPOs…with none of the downside.

The best way to look at it is as a cooperative IPO where a group of businesses join forces and publicly list, growing further by acquiring more companies in the same space. The twist to the model we have introduced is that the individual founders keep full control over their own entity. They are just using the publically listed vehicle as a platform. Allowing them to swap shares for more liquid shares, yet still retain the control of their own entity.

This way they achieve scale while still being able to run the business as they see fit. All member companies share a common holding company with a consolidated income statement and balance sheet. Instant scale helps them win bids when pitching for contracts, geographic coverage, and product diversification. They can talk big when they need to, and be small and nimble when it comes to serving individual clients.

What other benefits does an Agglomeration have besides scale?

There are many unique aspects of an agglomeration that helps small business owners. In terms of liquidity, the public listing allows people to sell when they want or sell a little and keep the rest. It creates financial freedom for the founders. The fact that they are all in the same boat fosters cooperation to drive share value and the timing of share exits. Since all the entrepreneurs joining are looking to grow and not exit, it is easy to get a significant multiplier effect.

When it comes to wealth and value creation, this is really the “Holy Grail” of entrepreneurship. It takes away the binary sale choice, and creates smooth and growth platform. Profits and cost savings are directly multiplied in the company’s valuation creating a direct correlation between effort and reward. We also have a dividend policy so all companies in a group issue dividends, meaning the founders get income from their shares without the need to sell them.

From an investor standpoint, an Agglomeration provides a very compelling proposition. Finally you have the ability to invest in fast growth small businesses but with the liquidity that public stock provides allowing you full access to your capital at any moment. Additionally, because there is a portfolio of companies in the group, your risk of any one company struggling is minimised by the diversified nature of the agglomeration. Companies within the group can also access soft loans from the parent, or cash and expertise to help with consolidation. This significantly increases their ability to survive and scale over their competitors outside the group.

What’s the future of Agglomeration?

Unity Group currently has around a dozen Agglomerations in process from Marketing to Childcare and from Tech to Finance, plus many others. We are always looking to speak to good, debt free, profitable businesses that would like to explore whether this is the right option for them.

Because of the massive potential in this movement, we are releasing the intellectual property on the Agglomeration in our book “Agglomerate – Idea to IPO in 12 Months.” Rather than keeping it to ourselves, we feel that letting everyone have the blueprint is the best way to allow as many small businesses to benefit as possible. In so doing, we hope to unlock the massive potential that is the small business which ultimately benefits the economy and its workers as a whole.

You can download a free copy of the book here:  http://www.callumlaing.com/wbaf/

This article first appeared on Huffington Post by Jeff Charles.  https://www.huffingtonpost.com/jeff-charles/callum-laing-the-best-way_b_12077962.html

This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

Investors

Eva Law

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Eva Law invests in businesses and people who share something she believes in and understands well.

What’s your story?
I serve affluent families, corporations and investors in Asia. I am well connected with entrepreneurs, wealth creators and the next generation who dream big. I offer my clients solutions which are contingent to their requirements.

Apart from supporting clients with their investment, I am passionate about helping clients with things like family governance, family business growth, management and succession. Since recently establishing the Life-Quest Fellowship, I now support good causes and help them to build a dynamic economy, harmonious society and a ‘greener’ world.

I am available for talks, I welcome co-investment in any form and I am always happy to meet bright people with good ideas.

What is your involvement with Investment?
With regard to my own investment, I together with my vehicles are actively investing in technology, impact investing projects and young companies.
My daily life requires me to work closely with the buy-side parties. They are the wealth owners, the successors and the co-investors. In this role, I need to fully understand their unique requirements. I manage and facilitate the potential formation, execution, disposal and ongoing management of the investment activities either operating in-house or run by mandated external managers.

How did that come about?
I started investing in technology when the tech-bubble burst. For impact investing, I was inspired by people with vision and good hearts and that was when I engaged in the family offices network. My investment in young companies started 2 years ago when I started supporting programs relating to the incubation and acceleration of start-up companies which exhibited the potential to be successful. Being a family office specialist, it is my natural role to offer tangible support to clients to assist in arranging their investments, club deals and asset disposals.

What are some of the key things you have learnt about Investing?

  • Be patient with long-term investing
  • Buy and invest only in businesses or projects you understand
  • Make informed decisions – do due diligence and checking
  • Take diversification seriously
  • Know when to sell and when to buy
  • Maintain liquidity at a reasonable volume

What mistakes do you see less experienced investors making?
Many investors confuse historical returns with future expectations, the investment advice they receive about long term probabilities and average returns may have little or no relevance to the actual results they get.

I have seen on many occasions, investors fail to match investment styles with their own personal goals. There’s no single right answer to investment strategy that will result in financial success for everyone. Investors have to find the path that will adhere to their unique expectations, limitations, skills, resources, goals, values, and risk tolerances for achieving financial success.

Following those ‘gurus’ who have made their millions doing the “blah, blah, blah” strategy doesn’t mean it’s the right strategy for all investors. Investors are advised to be vibrant and be able to make decisions contingent on their own conditions.

What mistakes do you see Entrepreneurs making?
Not being adaptable. Companies don’t fail because of changes to the environment. They fail because their leaders are either unwilling or incapable of dealing with change. Indeed, companies don’t change. People do. It means that to stay competitive in today’s environment warrants not only the skill and will to adapt to change but also the foresight to anticipate it.

Excessive optimism. Failure to consider the downside risks will bring the business to a halt quickly. Often an enterprise or start-up expects to have its product on the market in the near future and have sales growing at aggressive rates with unrealistic margins. Sooner or later, the company will experience cash flow disaster, and most entrepreneurial businesses have no plan whatsoever for such variances. They fail not because the idea was necessarily bad but more than anything because their forecasting was poor and the capital dries up.

What’s the best piece of advice you ever received?
I receive advice from the people who surround me – my family, the church, the community. I have shared some of the advice i have received which resonates with me:

  • Don’t give up on what you want most, for what you want now. It’s about sticking to your priorities.
  • You cannot control the external world, but you can control your reaction to it. By focusing on what I can do, I can stay positive.
  • Only pack what you can carry yourself. I realize excessive pressure is no good and it won’t help your end goal.

What advice would you give to those seeking funding?
First, fundraisers should have clear expectations and well contemplated strategies. Second, qualifying the target investors/funders early so they focus their scarce resources on people likely to support them. At last, research the potential investors/funders and build a relationship with them over time. People buy from people they like, trust, respect and believe in.

Other tip: Make the pitch simple. Nobody will buy what they don’t understand. It’s very important to take the complexity of the company and industry and develop a “narrative” that helps investors and funders better understand the context. It’s basically story telling.

Who inspires you?
The people I am surrounded by.

What have you just learnt recently that blew you away?
Do what you love and create the environment that’s right for you. That is why I built the Associations, the Fellowship and my own business. I love doing what I want to do and I can help the world along the way.

What business book do you recommend the most?
I recently read Jonathan Taplin’s book, Move Fast and Break Things. It examines the “monopoly platforms” built by Facebook, Google, Amazon and others. It also discussed technology’s impact on society.

Shameless plug for your business/organisation:
Association of Family Offices in Asia (AFO) is a professional society in Asia which distinctively gathers single, multiple and virtual family offices as well as industry societies in the region. AFO offers a range of consultancy services and organized activities to facilitate collaboration and co-investment among the prestige circle.

Asia Co-Investors Club (ACIC) is a group of private investors who organize partnerships. The relevant group in ACIC establishes new ventures, buys or sells securities and real assets based on a majority vote of the members. Club meetings are voluntary, thought provoking and educational. Each member may actively participate in investment decisions.

How can people connect with you?
Connect me via LinkedIn or write to me at [email protected] or reach out to my assistant at [email protected]

Social Media profiles?
https://www.linkedin.com/in/evalaw/

This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

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Investors

Louie Pinto

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Louie Pinto swears by his tried and tested formula – the Billionaire Rule of 3.

What’s your story?
My name is Louie Pinto. I was born in the USA to immigrant parents with humble beginnings. In my 20s, I decided that I wanted more out of life and wanted to live an extraordinary life, so I decided to study the rich and wealthy. For the last 18 years, I’ve studied under some of the top mentors in the word, like Tony Robbins, Zig Ziglar, Joel Bauer, Harry Dent, etc. I came up with a formula called the Billionaire Rule of 3, which I started to teach and apply in my own life and the lives of others. I’ve spoken to over 10,000 people in the last few years in Asia alone.
Last year, I founded GCBA- Global Cryptocurrency and Blockchain Alliance with 2 partners of mine in Singapore. We started at a coffee shop and less than 1 year later, we have thousands of members and we have impacted many of their lives.

What is your involvement with Investment?
I focus on modern wealth strategies, which include bitcoin and blockchain education. Investing in cryptocurrencies is risky, that is why I teach people to focus on crypto education. I teach people to have a small exposure to crypto, keep their traditional investments, like RE and stocks, but also use a small amount in crypto to supercharge their returns.

How did that come about?
I was first exposed to bitcoin in 2014. I did nothing. Then last year in April, I had a mentor ask me to really take a hard look at bitcoin again as a way to create generational wealth in a short amount of time. I started to share with some friends, then it grew from there. We have thousands of members all around Asia in our Alliance.

What are some of the key things you have learnt about Investing?
Well, my billionaire rule of 3. Step 1. Find the right trend. Step 2. Is it the right time? Step 3. Take massive and immediate action.

What mistakes do you see less experienced investors making?
Focus too much on not having a plan or a strategy. If you don’t have a plan, you become a gambler, and the casino is filled with broken souls and wallets. We focus on having a game plan and simple strategies to make money. Our focus is that investing should be boring, and profitable.

What mistakes do you see Entrepreneurs making?
Not spending enough time on education. One of my friends, just bought a small plane. He asked me if I wanted to go for a ride. As we were talking, I asked him where did he go to pilot school? He said he didn’t, he just watched a few videos on youtube and read a book. Now that is risky and no one in their right mind would fly with that person. But people gamble away their life savings in the markets and other investments, because they are not educating themselves first.

What’s the best piece of advice you ever received?
Define your target and keep taking steps, no matter how small, each and every day, until you accomplish it.

What advice would you give to those seeking funding?
You need to have solid proof of your results before you can start to ask people for money.

Who inspires you?
Being a new parent (my little girl is 4 years old), I really admire parents who will do anything, including giving up their dreams, to provide a better life for their children. Only just becoming a parent, have I started to appreciate my own parents even more.

What have you just learnt recently that blew you away?
Sometimes you can even surprise yourself. Last year, when I first got started, I never would have imagined that I would be speaking to thousands of people a month, sometimes up to 8 times a week, and be a leader in this field. I grew up with low self esteem and had a really bad stuttering problem that prevented me from speaking in public for many years.

What business book do you recommend the most?
There are so many that I’ve been blessed with over the years. 1) Rich Dad Poor Dad, by Robert K. It shares simple, but powerful ideas on gaining wealth. 2.) Awakening the Giant Within, by Tony Robbins. He focuses on mindset and taking massive action. After reading this book in my 20s, it sent me on a few different paths.

Shameless plug for your business/organisation:
www.GCBA.world

How can people connect with you?
Facebook
Email – [email protected]

Social Media profiles?
https://www.facebook.com/louie.pinto

This article is part of the World Business Angel Forum media partnership with AsianEntrepreneur.org

If you would like more information about WBAF, please contact Callum Laing WBAF High Commissioner for Singapore. [email protected]

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