Blue Sky Capital Resources is not your typical private equity investment firm (PE). This is because we focus on opportunities in the mid-level business market. We work with companies with revenue but significantly less profit than what a traditional PE firm would be interested in. This unique characteristic causes us to focus on heavily on three crucial considerations: disruption, alignment of values, and passion.
Of course, we perform exhaustive financial analysis and deep dive all other normal and prudent aspects of the business, but we must see clear vectors on these three aspects, or the business is not a fit for us regardless of financial performance. This article will explore them and explain why they are so valuable to us and why you should value them too.
1. To throw into confusion or disorder.
2. To interrupt or disturb the progress of an event, activity or process.
3. To break apart or alter so as to prevent normal or expected functioning.
Disruption comes in many forms, from a unique recurring revenue model, a new widget, a new perspective on healthcare, or a better way to take care of a customer. Our entrepreneurial and investment banking background provides us a unique perspective on the market. We consistently look for the disruptive qualities of every business opportunity we consider.
We analyze companies daily from our defined spectrum of industries, maybe one in a hundred offers true disruption. Sometimes the disruption is hidden in the details and sometimes it is as plain as the nose on your face. When we identify the disruption, we then need to understand how we are going to improve the companies processes or systems and work to define an action plan that we can implement with the stakeholders that will make a meaningful impact.
1. Monetary or material worth.
2. Worth in usefulness or importance to the possessor; utility or merit.
3. A principle or standard, as of behavior, that is considered important or desirable.
4. To regard highly; esteem: I value your advice.
Quite simply we are looking for business owners that share and align with our core values of integrity, passion, kaizen, and diligence to name a few. We have gone to great lengths to implement processes and tools that enable us to understand not only the opportunity but also the character traits of business and business owner(s). We utilize the services of a psychologist to help us conduct owner interviews and create cultural profiles of the businesses we consider.
At the end of the day we are creating long term relationships with like-minded individuals that want to do the right thing while making a difference. It is extremely important to us to know who we are going to be working with, what are their strengths and weaknesses? How can we improve or augment them? What is the anticipated impact of the improvement? We must have answers to these questions and executable key performance indicators (KPI’s) incorporated in our plan prior to making any investments in a business.
1. A strong affection or enthusiasm for an object, concept, etc.
2. The object of an intense desire, ardent affection, or enthusiasm.
3. Any strongly felt emotion, such as love, hate, envy, etc
Of the three considerations this is perhaps the most important. We are looking for passionate owners that display a “fire” in their eyes when they talk about their business. They can clearly communicate where they want to go and know what they are missing, there might be two or three things that if they could implement would ensure the future success of the enterprise. We then need to understand how our expertise and capabilities are going to be implemented and have the required effect on the business moving forward.
We would not consider any opportunity where a business owner is looking to pull the parachute and land safely on the ground. If we are going to jump, then we are all going out the door at the same time.
In summary we have a financial fiduciary to our investors and business owners we become involved with, everyone involved is looking for a return on investment (ROI) and we know that a small amount of focus on these three considerations will make a difference in the performance of the investment. We are not just financial investors looking to write a check, we must also see where our expertise and experience will make a difference. We are passionate about our company, the goals we have set and making a meaningful impact in people’s lives, the business community and in our world. We will accomplish this mandate by making responsible, calculated investments into businesses and ideas that matter.