Christopher V. Flett

Do you believe?

We never claimed to be perfect,
That means we’ve learned to be humble.
We say excuse me and I’m sorry…as well as please and thanks,
Even when its not our fault we apologize.
Sure one arm of the torch didn’t rise,
But when the earthquake struck Haiti, Canadians raised their hands to
say…”We’ll help.”
And yah, there is a fence around the torch,
But you can walk right up and shake hands with our prime minister and most
famous Canadians.
We put Gretzky in the back of a pick up, in the rain, not surrounded by
police…and he was okay,
And by the way… the great one is Canadian…and HE wasn’t complaining!
We do have security at the games, of course, but most people don’t even have
a gun they have to leave at home.
The medals ARE under lock and key, but our doors and our hearts are open to
the world.
It has been pointed out that some buses broke down last week…but let’s not
overlook the fact that our banking system didn’t.
We didn’t get the “green ice maker” right this time…but we will,
eventually,
Just like we did when we invented the zamboni.
Citius altius fortius
If you don’t reach higher how do you get faster and stronger?
Was the first quad jump perfect?
Should we not have given snowboarding to the world “in case” it didn’t take
off?
So big deal…one out of four torch arms didn’t rise. Good thing we had
three more! It’s called contingency planning!
But remember…the Canadarm works every time…in outerspace…and insulin
turned out to be okay.
We couldn’t change the weather, but maybe we can help to stop global
warming.
We don’t have the tax base of the US or the power of the Chinese but, per
capita, we ponied up for some pretty kick-ass venues in the worst global
recession ever.
Sure, some folks couldn’t afford tickets, but our health care is universal.
We have shown the world that we can raise our voices in celebration and
song, but moments later stand in silence to respect a tragic
event…together…

My dad always said, “You can play now and pay later or pay now and play later. If you play now, it will always be more expensive down the road.” What he was teaching us is that you need to put the work in BEFORE you reap the rewards. With the credit/housing crisis here in the US, it shows that many people tried to ‘live the lives they wanted’ before they had earned them. Buying houses they can’t afford, cars they can’t service, and vacations that they pay on their credit cards. People are being wiped out because they didn’t do the work first. They wanted to ‘pretend’ that they had arrived before ever paying the piper.

I’m spending a month in the tropics which feels both relaxing, but more important, gratifying. While my friends were all getting the big homes, the big cars, and taking the big vacations with the impressive pictures…I was building. I didn’t vacation, I didn’t buy the big house, I didn’t buy the new cars, and I didn’t jaunt all over the map to party. Instead…I worked. I know that paying now, would allow me to play later without worry. Here I am. The stuff in your life will not make you happy just by having it. You can go run up your credit cards and live like a rock star and that will bring you momentary happiness. Then the dread will set in when you realize the Visa bill is coming tomorrow and you are paying 19% interest on a balance you can’t possibly cover.  A friend emailed me bitching that I get to take “all this time off” and he gets two weeks of a year. I told him that it isn’t unfair, it is that we have made different decisions. He chose the ’security of a job’ and I chose to build an asset that created revenue. Remember that security that you crave may keep things out (unemployment, no money, etc.) but it also keeps you in (doesn’t allow you time to explore things you are passionate about, spending time with people you enjoy, having the freedom to choose.

Building a business is the single most important time investment you can make in your long term ability to ‘play’. It will generate revenues that allow you to sneak away without financial hardship. You may work very hard for 1,2,3,5 years, but in the end, that investment will return to you over and over again. When you see people enjoying the spoils of their hardwork, don’t feel sorry for yourself. Instead, find the inspiration to model what they have done so that you can enjoy what the enjoy. It isn’t about taking risks, it’s about getting past instant gratification (which we are all to focused on). Stay your course, build your model in a sustainable model, and enjoy all that being a business owner has to offer. We all start with the same options. How will you leverage yours?

For me…I’m needed back at the pool. There’s a drink waiting…

The term joint venture gets thrown around a lot, but most people are not really clear with it’s meaning or how it works.

In it’s truest form, a joint venture or JV is two or more companies coming together to build a business model and share in the profits. These companies bring together a diverse skill set, but remain autonomous from one another. Sometimes the JV is structured through an incorporated company (for liability issues) but more times than not, the companies simply form a relationship through a contract and get to work.

This can be a great model to look at if you have one side of a business model, but not the other. Maybe you have intellectual property, but not the market. Or you have the design, but not the manufacturing capability. Maybe you have anew business model, but lack the credibility because you are new. In this model each individual company covers their own costs and splits revenues accordingly.

JVs can be a great business model but require clear expectations from each participating party.

Now get at it!

The last couple of years, I’ve been building up a portfolio of companies that:

• Have a distinct offering within three niche markets
• Have the potential of being cash flow positive in a short amount of time
• Have little or no substantial debt
• Target professional women or do something to support women in the economy
• Are run by someone who understands their markets and has the horsepower to get the job done
• Can the overall idea, or any of the components, be licenced?

In exchange for an equity stake and preferred position on dividend payout, I leverage capital. Financial capital, intellectual capital, human capital, systems, networks, and know how. This type of business is often called Venture Capital. This is wrong. The work I do in this type of model is Angel Investment. People use the terms back and forth so I thought I’d lay it out once and for all. After completing 25+ of these deals, I thought that I would take a moment to illustrate the difference.

Venture Capital is someone like me using a pool of money owned by others, and leveraging an equity stake in a company. This is done to grow, flip, transform, or be amalgamated into something else. The money is almost always held in a ‘fund’ that investors put their financial resources into.  Think of it like a capitalist co-op.   There’s a lot more to it, but that is the simple definition.

.Angel investment is an individual like me using my own capital, knowledge, contacts, ideas, systems, etc. to take an equity stake in a company and co-pilot its development into a profitable model. Dragon’s Den makes itself out to be Venture Capital, but it is really Angel Investment. I found a great reference on WIkipedia that lays it out:

Angel investments bear extremely high risk and are usually subject to dilution from future investment rounds. As such, they require a very high return on investment. Because a large percentage of angel investments are lost completely when early stage companies fail, professional angel investors seek investments that have the potential to return at least 10 or more times their original investment within 5 years, through a defined exit strategy, such as plans for an initial public offering or an acquisition. Current ‘best practices’ suggest that angels might do better setting their sights even higher, looking for companies that will have at least the potential to provide a 20x-30x return over a five- to seven-year holding period. After taking into account the need to cover failed investments and the multi-year holding time for even the successful ones, however, the actual effective internal rate of return for a typical successful portfolio of angel investments is, in reality, typically as ‘low’ as 20-30%

When an Angel investor gets into play, not only could they waste their time, money, and systems, but they risk damaging their reputation with too many failed companies. That’s why Angels consider the personality as much as anything else when determining fit within their portfolio. A good person that is bad at business can be fixed; a bad person that is good at business is cancer to an Angel Investor.

Due diligence is a part of business that Angels do to try to weed out the good ideas by bad people/bad ideas by good people.

For existing businesses, I look at:

• financial modeling
• exit opportunity analysis
• research of the industry
• validation of market size
• competitive analysis
• site visits, and etc
• As a rule, I don’t buy debt as an Angel unless the model is making positive cashflow

For new businesses, I look at:

• target market identification and size
• competitive analysis
• competencies of the people involved
• industry trends
• cost of penetration
• the personality of the person with the idea (Can they get it done? Can they survive while the company is growing? Are they committed? Are they an employee (mindset) pretending to be and entrepreneur? Will they listen to the advice you give them or are they going to fight without knowing?)

At the end of the day, it is a gut cheque (using your intuition). Does this company make sense at this time, with this person, in these markets, following this plan? If all lines up, I pull the trigger. If I’m not sure, I start to pump the brakes, and if something feels really off, I hit the kill switch.