500 global investment thesis
Is it the largestpublicly traded companyfocused on this opportunity? Mike Bertasso, correspondence with David Harding, 15 December 2003. As part of the research leading up to this book, Bain looked at a hundred deals that involved EPS accretion and dilution. 500 Investment Thesis: Cheap, Global, Scalable, Platforms CONFIDENTIAL / / FEBRUARY23,2016PAGE17 / Cost of starting a company has decreased ~100X, essentially as a consequence of open source software and cloud computing.1 Internet usage among American adults went from 14% to 86%.2 Online speeds in the United States are over 120X . Getting rich sounds great, but how do you do it? Compared to more traditional VC firms on Sand Hill Road, we prefer a large, diversified portfolio of early-stage investments that reduces risk and maximizes potential return. THESE FIGURES ARE ESTIMATES, AGGREGATED ACROSS ALL PORTFOLIO COMPANIES HELD ACROSS ALL FUNDS ADVISED BY 500 STARTUPS MANAGEMENT COMPANY, LLC AND ITS AFFILIATES, AND ARE BASED ON INTERNAL DATA THAT HAS NOT BEEN EXTERNALLY VERIFIED AND RELIES ON PORTFOLIO INFORMATION SUPPLIED BY EXTERNAL SOURCES WHICH HAS NOT BEEN VERIFIED, MAY NOT BE ACCURATE OR UPDATED. Now once you have that thesis, how do you put it into . If it is dilutive, it's probably high-growth and attractive, and we can't afford it." Bedy joined 500 in 2011 to pilot international investments before expanding her role to Managing Partner and ecosystems development. Investment Thesis + Model . 1. What are Limited Partners? Passive Investing, What You Need to Know About Impact Investing. Across its family of funds, 500 Global invests in founders building technology companies that drive economic growth in fast-growing markets around the world. Recent efforts to transform companies via the megadeal have failed or faltered. At 500, we're pretty transparent about our investment thesis. About IBE-UNESCO. Morgan Stanley (MS) is one of the world's leading financial services firms. 500 Global Portfolio Investments, 500 Global Funds, 500 Global Exits "When I see an expensive deal," Tall told us, "and they say it was a 'strategic' deal, it's a code for me that somebody paid too much.". When Mac Conwell embarked on his journey into venture capital, his primary focus wasnt on the branding of his fund. Sign up to stay up to date on global innovation. Our courses combine knowledge with real-world simulated exercises, helping investors fine-tune their investment strategies. By definition, the transformational deal can't have a clear investment thesis, and evidence from the movement of stock prices immediately following deal announcements suggests that the market prefers deals that have a clear investment thesis. If you want the short story, read the abstract below & 3 core assertions, then cut to the conclusions at the bottom. So you want to invest in stock. Covid-19 will spur further consolidation, and the most active acquirers have a leg up. Weve collected insights and stories from some of our top performing startups, partners, and mentors in the 500 TukTuks ecosystem. In some cases, it may also serve as a historical guide as to whether the investment was a good move or not. Feb. 08, 2016. following the event day. Founders dont forget their first checks, and in many cases we were their initial investor. 17. Private Equity International has named Christine one of 10 Women of Influence in venture capital. Next, look at how the particular investment opportunity compares to others that benefit from the same catalyst. Hone your investment strategy, tools, and tactics with hard-won insights from the 500 Global team. 500 Startups describes its investment thesis for its early-stage fund as such: Invest BEFORE Product/Market Fit,. When a stock or index falls, it can be a buying opportunity using this strategy. An Investment Thesis for the 2020s Stay ahead in a rapidly changing world. In expanding its investment strategy, 500 Global will continue to invest in the accelerator and seed stage as well as the later stages of a companys growth. An investment thesis can help solve this problem. Try to ask and answer some key questions, including whether the investment meets your investment goals and what could go wrong if you go ahead with the deal. This written document provides insight into what the investment is, the goals of the investment, any associated costs, the potential for returns, as well as any possible risks and losses that may result. In Southeast Asia, 500 Global invests through the pioneering 500 Southeast Asia family of funds. Betterment vs. Wealthfront: Which is Best for You? 500 Investment Thesis: Cheap, Global, Market expertise is essential to help build entrepreneurial ecosystems. 500 Emerging Europe aims to help the talented entrepreneurs of the broader region of Trkiye and the Turkish diaspora, Eastern Europe & the Baltics in building explosive businesses. Making the world smarter, happier, and richer. Today, close to half of our portfolio companies are based outside of the U.S., and so are nearly 40% of the unicorns in our portfolio. Industry players generally dismissed that approach as spray and pray. But the breadth and depth of our portfolio has served us well. 500 Global made its first investment in MENA in 2012. Finally, write down your expected return from this investment and how much conviction you have in its ability to achieve that return. Unobvious founders. Download to read offline. In our VC Unlocked courses, we equip up-and-coming angels and VCs with the tools they need to become better investors. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RETURNS. And it has to make sense both financially and strategically, which means it has to have at least as fast a growth rate as we expect from our businesses in general, which is 10 to 15% a year. The Global 500 shrank a little over the past year. How 500 Startups picks investments Perhaps that investment has now lost value, and they're not sure whether they should buy more, sell, or continue holding. 500 Startups, one of the worlds most active venture capital firms, today announced the closing of a $140 million global flagship fund- the firms largest fund to date - bringing assets under management to $1.8 billion. Appendix Portfolio managers and investment companies often post information about their investment theses on their websites. THE SECTOR, REGION AND . Learn more about the core decision strategies that help companies win in M&A. Studies conducted by other firms support the conclusion that most companies are terrifyingly unclear about why they spend their shareholders' capital on acquisitions. Does the company demonstrate financial strength with high returns on invested capital, high margins, strong cash conversion, low capital intensity and low leverage? Here are five highlights of the 2022 global investment outlook. Of those who did, fully half discovered within three years of closing the deal that their thesis was wrong. A total of nine ESG indices are used - three from each market - . June also extended a . This thesis can be used as a strategic decision-making tool. Abstract: VC funds are getting smaller (good), & angel investors are growing (also good), but both . An investment thesis is simply an argument for why you should make a specific investment. Having an investment thesis can help you make more informed decisions about whether a potential investment is worth your while. However, if you found that the thesis is busted, you can sell your investment and move on. From the very beginning, our mission and investment thesis was anchored in the conviction that exceptional founders exist in all corners of the world. The first step in writing an investment thesis is to determine and then outline the catalyst driving your investment thesis. The perils of the "transformational" deal. That's a gain of just $1,590. 500 Startups is now 500 Global Craig Tall, telephone interview by Catherine Lemire, Bain & Company. Christine holds a B.A. Putting things in writing can have a huge impact on the direction of a potential investment. If the thesis hasn't changed, you can continue holding or potentially increase your investment. Clear Channel has the capital needed to "roll up" a significant fraction of this industry, as well as the cash flow and management systems needed to reduce operating expenses across a consolidated business. Thinking through and crafting a thoroughly researched investment thesis can help you make better informed investing decisions. 2022 Global Strategy Outlook: Fundamentals Will Dominate Investment Thesis Template | Track & Improve Your Investing Decisions If you made significant progress that warrants taking a second look please send me an email. It's quite a feat given the S&P 500 is up just 15.9% so far this year. 500 Investment Thesis: Cheap, Global, Scalable, Platforms CONFIDENTIAL / / FEBRUARY23,2016PAGE17 / Cost of starting a company has decreased ~100X, essentiall Learn how VCs can define and execute their own investment thesis, with real-life examples from 500s own investment strategy. Back then, few U.S. venture investors made their way to the region, but we recognized its potential and after making more than 30 investments in the region, launched our first MENA-dedicated fund, Falcons I, in 2017. They are small, lean, fast, agile, and dangerous. # Investments & Pace More than 40% had no investment thesis whatsoever (!). All the deals were large enough and public enough to have had an effect on the buyer's stock price. Offered in collaboration with the Stanford Center for Professional Development (SCPD), our flagship program gives emerging fund managers the confidence they need to make better investments and a community that supports them in their journey. Access VC fundamentals wherever and whenever youre ready. VC Unlocked: Online Certificate Courses 15. As venture capital continues to globalise and the percentage of unicorns from outside the US increases further, 500 Global is uniquely positioned with deep expertise and a strong track record of investing in markets around the world. These, too, are probably bad signs. We won't send you spam. Classified this particular investment opportunity's position within the catalyst: First mover in a trendy area. All you should know about the Investment Thesis Because dilutive deals are almost always involved in buying higher-growth assets, and therefore by their nature pass Thomson's test of a "heck of a compelling argument.". Every deal your company proposes to dobig or small, strategic or tacticalshould start with a clear statement how that particular deal would create value for your company. Similar to Investment Thesis Fundamentals (April 2016) (20) . Download Now. DuPont was similarly patient; it broadened its product scope into a range of chemistry-based industries, acquisition by acquisition. FURTHER, NO CONTENT OR INFORMATION CONTAINED IN THIS POST IS OR IS INTENDED AS AN OFFER TO PROVIDE ANY INVESTMENT ADVISORY SERVICE OR FINANCIAL ADVICE BY 500 GLOBAL. Here's a simplified example based on my investment thesis for Brookfield Renewable(BEP 1.21%)(BEPC 1.46%), one of my largest holdings: Renewable energy is one of the biggest megatrends of our lifetimes. and the global market. Now rebranded as 500 Global, the firm has been expanding its investment strategy beyond the accelerator and seed stage. These new economy stocks, in media, telecoms and technology, made up more than a third of the MSCI World. 500 Global has backed more than 6,000 entrepreneurs across 77 countries. Founded in 2010 by Christine TsaiandDave McClure, 500 Global has backed over 6,000 founders representing more than 2,500 companies operating in 77 countries including in Mena. How do you get started? document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. ALL VALUATIONS RELATE TO SELECTED PORTFOLIO COMPANIES AND ARE ESTIMATED IN ACCORDANCE WITH 500 GLOBAL'S VALUATION POLICY, AND ARE SUBJECT TO CHANGE. GM never attempted the transformational deal; instead, it rolled up smaller car companies until it had the scale to take on a Fordand win. As Mike Bertasso, the head of H. J. Heinz's Asia-Pacific businesses, told us, "If a business is accretive, it is probably low-growth and cheap for a reason. Simply put, a deal is dilutive if it causes the acquiring company to have lower earnings per share (EPS) than it had before the transaction. We've got you. It is a generalized region/stage focus with the types of team and market he looks to invest in. Lessons from Private-Equity Masters Across its family of funds, 500 Global invests in founders building technology companies that drive economic growth in fast-growing markets around the world. Define Investment Thesis (geography, technology, Second, similar to the radio industry twenty years ago, the outdoor advertising industry is fragmented and undercapitalized. Russia to cut oil exports by 500,000 barrels per day in August, oil Unsubscribe at any time. Value investors like Warren Buffett select undervalued stocks trading at less than their intrinsic book value that have long-term potential. Christine Tsai co-founded 500 Global in 2010, and led the firms growth over the past decade from a startup accelerator to a multi-stage venture capital firm with $2.7B in assets under management, and more than 2,700 investments in 81 countries. We continue to heavily invest in the region with new funds today. ". Liberty Global Investment Thesis: 8 Countertop Trends for 2022-2023. Success increasingly hinges on a great experience that includes useful, tailored advice, not adding more advisors. VC investment thesis: 500 Startup Israel - Adam Benayoun Identified the catalyst: Growing demand for out-of-home coffee consumption. An accretive deal, of course, has the opposite outcomes. *I have read thePrivacy Policyand agree to its terms. The 500 TukTuks family of funds are focused on seed-stage startups with exciting potential in Thailand and the Mekong region (i.e. ANY INCLUSION OF SUCH TRADEMARKS OR LOGOS DOES NOT IMPLY OR CONSTITUTE ANY APPROVAL, ENDORSEMENT OR SPONSORSHIP OF 500 GLOBAL BY SUCH OWNERS. Today, close to half of our portfolio companies are based outside of the U.S., and so are nearly 40% of the unicorns in our portfolio. We have extensive experience training and connecting some of the most impressive angels and VCs across the globe. Based in Seoul, 500 Korea was started to further our investment in the region. These were highly unexpected events, and they might affect someone's investment thesis. The 500 Southeast Asia team has backed companies across multiple sectors from internet to consumer to deep technology. Venture Capital Unlocked (Stanford) / Venture Capital 2.0. Sign up to stay up to date on global innovation. One more side discussion that comes to bear on the investment thesis: Deal making is often driven by what we'll call the dilution/accretion debate. We work with ambitious leaders who want to define the future, not hide from it. genuinely interested in making their life easier, A team that has worked long enough together to know how to handle differences, market without competitors raises a flag while a crowded market will be less than ideal, whenI cant form an opinion in a timely manner,expect my decision to be not to invest, If you wont take it well then maybe wewerenta good fit to start with. Institutional Shareholder Services: Definition, History, and Solutions, What is an Investment Thesis and 3 Tips to Make One, The Data That Built Our Fund's Investment Thesis. Financial professionals use the investment thesis to pitch their ideas. As such, it is meant to be a guide about the viability of a particular investment. Let's look at a case in point: [Clear Channel Communications' leaders Lowry, Mark and Randall] Mayses' decision to move from radios into outdoor advertising (billboards, to most of us). Is senior management arguing that a deal's inherent genius is too complex to be understood by all stakeholders, or simply asserting that the deal is "strategic"? Whatever the reason, an investment thesis allows investors to make better, more informed decisions about whether to put their money into a specific investment. Ex-ante refers to future events, such as potential returns of a security. (Surely companies should know whether a business area is related to their core before they decide to buy into it!) But let's dig a little deeper. Could Congress enact legislation that would damage its prospects? ALL READERS OF THIS POST SHOULD CONSULT WITH THEIR OWN COUNSEL, ACCOUNTANT OR OTHER PROFESSIONAL ADVISORS BEFORE TAKING ANY ACTION IN CONNECTION WITH THIS POST. Its leading knowledge platform provides the region with impactful thought leadership and research, community development as well as corporate and government advisory services to stakeholders of the startup ecosystem. Justifying a deal as being "strategic" ex post facto is, in most cases, an invitation to inferior returns. Some readers may be wondering whether there isn't a less tangible, but equally credible, rationale for an investment thesis: the transformational deal. 500 TukTuks, founded in 2015, is led by Krating and Moo. Expansionist deals are more likely to have a clear investment thesis, while "transformative" deals often have no credible rationale. ValueStream Ventures - Crunchbase Investor Profile & Investments An investment thesis is a written document that recommends a new investment, based on research and analysis of its potential for profit. 500 GLOBAL MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR INFORMATION CONTAINED HEREIN AND WHILE 500 GLOBAL HAS TAKEN REASONABLE STEPS TO ENSURE THAT THE INFORMATION CONTAINED HEREIN IS ACCURATE AND UP-TO-DATE, NO LIABILITY CAN BE ACCEPTED FOR ANY ERROR OR OMISSIONS. It should describe why you invest in the company and what you expect to happen. SEE. In search of effective transformations, people sometimes cite the examples of DuPontwhich after World War I used M&A to transform itself from a maker of explosives into a broad-based leader in the chemicals industryand General Motors, which, through the consolidation of several car companies, transformed the auto industry. Based on our conversations with Randall Mays, we summarize their investment thesis for buying into the billboard business as follows: Clear Channel's expansion into outdoor advertising leverages the company's core competencies in two ways: First, the local market sales force that is already in place to sell radio ads can now sell outdoor ads to many of the same buyers, and Clear Channel is uniquely positioned to sell both local and national advertisements. News. As a leading UNESCO Institute we are recognized and valued for the specialist knowledge and expertise that we bring to Member States promoting . We flexed our operator backgrounds and diverse mentor network, but what stood out the most was our investment thesis and conviction in unobvious founders and geographies beyond Silicon Valley. While it's best to write one before you invest, you can also create one for existing holdings. Individual investors can use this technique to investigate and select investments that meet their goals. Given how frequently we have heard weak "strategic" justifications after a deal has closed, it's worth passing along a warning from Craig Tall, vice chair of corporate development and strategic planning at Washington Mutual. "What is an Investment Thesis and 3 Tips to Make One. In a more recent example, Rexam PLC has transformed itself from a broad-based conglomerate into a global leader in packaging by actively managing its portfolio and growing its core business. UNLESS OTHERWISE STATED IN THIS POST, ANY PREDICTIONS, FORECASTS, CONCLUSIONS, VIEWS OR OPINIONS EXPRESSED REPRESENT THE CURRENT VIEW AND THINKING OF 500 GLOBAL WITH REGARD TO THE SUBJECT MATTER THEREIN BASED ON INTERNAL DATA AGGREGATED ACROSS ALL 500 GLOBAL FUNDS AS OF 6/30/21 AND/OR ANALYSIS WHICH HAS NOT BEEN INDEPENDENTLY VERIFIED, AND WHICH IS SUBJECT TO CHANGE AT ANY TIME. Joe Trustey, telephone interview by David Harding, Bain & Company. It will take the global economy three decades and more than $100 trillion of investment to transition its primary power source from fossil fuels to renewable energy. We decided to invest across geographies and make venture capital inclusive. Further, you can reference it in the future to ensure your thesis is playing out as expected. This example succinctly lays out the catalyst (the renewable energy megatrend), the investment opportunity's position in the trend (Brookfield is a global leader), its ability to withstand risks (Brookfield has a top-tier financial profile), and my conviction level (high). Seeing your proposal in print can help you make a better decision. In the world of investments, the thesis serves as a game plan to help readers understand the big picture and nuances attached to an investment strategy.*. Brookfield also has an extensive track record of creating value from the sector, including two decades of steady income and dividend growth, driving superior performance. 99% of the time Im wrong and I like to be proven wrong. By contrast, "transformative" dealswhereby companies threw themselves bodily into a new line of businessdestroyed an average of 5.3% of market value immediately after the deal's announcement. As an example, we have generally backed SaaS companies at a rate well above the venture capital industry. The investor recalls the investment thesis, relies on the integrity of its conclusions, and continues to hold the stock. These include white papers, government data, original reporting, and interviews with industry experts. Investopedia does not include all offers available in the marketplace. The eleven-year-old firms global thesis has paid off: 500 Globals first global flagship fund is a top decile performer with a net TVPI of 11x^. Could that result in underperformance if the catalyst doesn't play out according to plan? It's always important to have a plan, especially when it comes to investing. The fund's venture arm, Sanabil Investments, is ramping up while venture activity as a whole is pulling back. A firm could have multiple funds, but each fund could only have a thesis. In 2014, 688 companies raised $3.4bn and a total of 70 exits and IPOs netted Israeli companies more than $15bn. What Is Risk Management in Finance, and Why Is It Important? 500 TukTukss mission is to discover and back startups in Thailand and Southeast Asia with exciting potential. Small Business & Entrepreneurship Investor Relations Internet. Just this year, weve seen a number of our non-U.S. investments cross the $1 billion valuation mark, including. Does it have too much debt, volatile cash flows, or an otherwise weaker financial profile? Learn about how were supporting the growth of regions like yours around the world through our bespoke venture education programs. Typically, an investment thesis comprises a single sheet of paper upon which is written the basic idea (s) underlying an investment, completed when the investment is made. Some examples to consider: Consider and jot down anything that could negatively impact this investment. PDF Master's Thesis 2021 30 ECTS A 2002 Accenture study, for example, found that 83% of executives surveyed admitted they were unable to distinguish between the value levers of M&A deals. It also notes that, by 2025, 84% of coffee spending and 21% of the volume consumed will be outside the home. If anything, the dilutive deals slightly outperformed. They ranked "learning about new (and potentially related) business areas" as a top reason for making an acquisition. She is a member of Class 17 of the Kauffman Fellowship Program and fluent in four languages: Portuguese, English, Spanish and Mandarin Chinese. Based out of San Francisco, our global flagship funds include a series of five funds that invest across regions and industries. An investment thesis isn't just for stocks; you can craft one for any investment opportunity you're contemplating. 500 Global According to its blog, there were three pillars or principles that contributed to Connetic's venture capital investment strategy. The dilution/accretion debate. A credible investment thesis should describe a concrete benefit, rather than a vaguely stated strategic value. Governments were eager to diversify their economy, and looked to Silicon Valley for inspiration. A dam Benayoun joined 500 startups as a venture partner to invest in Israel. It has one of the largest globally diversified renewable energy platforms and an even bigger pipeline of development projects. Ill be as candid as possible with my feedback I dont like evasiveanswers or sugarcoating reality. RANKINGS OR SIMILAR GROUPINGS HAVE INHERENT LIMITATIONS AND QUALIFICATIONS, SUCH AS LIMITED SAMPLE SIZE, IMPERFECT ACCESS TO INFORMATION AND OTHER CONSIDERATIONS. When you're writing your investment thesis, be sure to be clear and concise. About IBE-UNESCO IBE-UNESCO is the global centre of excellence in curriculum and related matters. Please check your email to confirm your subscription. We also reference original research from other reputable publishers where appropriate. This is the 500 startups Israel investment thesis. If not, you can make changes to your investment. An investment thesis is important for anyone who wants to invest their money. Only a third of acquiring executives actually write down the reasons for doing a deal. FOR EXITED POSITIONS, VALUATION DATE IS DATE OF EXIT. Sign up to stay up to date on global innovation, BAM is Silicon Valleys leading training program for accelerator managers who want to take their founder programs to the next level, where 500 Global shares best practices and key insights from running numerous programs. If the investment thesis holds up to this kind of scrutiny, then some short-term dilution is probably acceptable.