So, this is the worst market in its third year in the venture capital space in
terms of raising funds. What advice would you give to people in the room who are
trying to go out and raise capital? Obviously, it's good to be in the family office
room like this. What else might they do?
The first piece of advice I would say is stand out. Make sure it's different. And,
Even if it's something that's similar, let's say we're talking about PR,
there are a lot of PR firms right now that are rolling up into, there's a lot of
roll -ups going on out there. What's unique? What is it that you do that is
different? And what is it that you're going to do to double, triple, even put,
let's go a lot higher than that as far as money's concerned. Make it interesting,
but be real, I also wouldn't be grasping at straws. I keep it very real and I'd
have my little ducks in a row rather than just all over the place. Be prepared for
the questions but be different.
I'd say there's a couple ways I'd answer that. So our company we specialize in
opportunistic or non -correlated investments and what is that? That means right now
we're in one of the biggest downturns in commercial real estate that's been it's my
lifetime. I lost everything in the residential collapse in 2010, but opportunistic
funds right now, not value add, multifamily or things that aren't quite penciling
yet, but opportunistic acquisitions and debt and equity make it very relevant. Finding
the upside of the downturn make it very relevant. So repurposing strategies that take
harness of the downturn, also leaning to right now we're at a very unique time
right this isn't typical and we're in the middle of we just got done with a black
swan event interest rates skyrocket insurance costs are high materials labor went up
we have two proxy wars going on through your Canadian Israel we just bombed Iran's
direct war we're in the middle of a trade war there's the probabilistically this
engineer inside of me says hey maybe we should think about alternatives, things that
aren't dependent on macroeconomics, things that don't ride the waves of the rest of
the fundamentals of our portfolio. And so oil and gas is a component of that,
right? Opportunistic certain investments in real estate or legal industry or
healthcare. And how our organization continues to stay relevant is by offering
alternatives outside of those such as legal investments investments in health care,
ones that help to build true resilience even in downturns. David?
Well, I agree it's a hard time. There's been a lot of deals promoted with companies
that were going to make money someday. I think the key thing to look at in a
company is what is its real prospect to produce return and the things I'm working
on are geared towards making hundreds or thousands of percent on capital income and
my best investments that have worked out have had crazy income for the amount and
income is what you love you know getting into paying investments now in the stock
market there are assets that are yielding real high that are out of favor like the
midstream pipeline companies but my effort with my invention company is to promote
things that have the potential to have game -changing wealth to transform a few
dollars into a ton of dollars. Lottery ticket type winnings. I agree with everything
you just said David. I think the most mispriced asset class on the market right now
is the midstream MLP pipeline infrastructure. It's 70 % gas,
but it's priced almost a hundred percent correlated to oil has nothing to do with
oil So I think you're really onto something there Joe, how about you your thoughts?
Question being raising capital. Yeah, how do you and do you raise capital? We yes,
we raise capital. We don't tend to have to ask very hard these days because we're
in fund six We have our LPs and we tends to be about a two week close, you can
imagine. We have been looking for some new investors just to diversify the investor
pool. But we also, we're kind of deal junkies. We see a lot of stuff that's beyond
maybe what is committed capital investment opportunities, peripheral energy tech
opportunities, other extraction related industry oriented stuff It's not minerals and
royalties and one of the things that attracts us is when someone's you know say
stand in the lane But really the ask is not an ask for the next two years.
The ask is for the next six months They're short -ass. They're small -ass They're
about accomplishing a discrete set of goals that they're gonna focus in on with that
capital that they're gonna put to work Kind on the premise that the reduced is the
risk is reduced considerably is that there is a line of sight to actually see that
capital go to work and maybe provide some insider solutions or quick failures that
could then be used and turned into later successes for the entity or the venture.