Projects RH works with its clients, and our strategic partners, to introduce potential investors or lenders to exciting projects and opportunities. Our work extends across national borders because we seek for our client’s investors who will assist with the business as well as invest. Our core business is we connect projects & money. Introductions are a key part of that.
We work to ensure our clients receive strategic and warm introductions to potential investors and lenders.
We are firm believers in the view that you must put your best foot forward and that many investors and lending institutions once they mark “No” on their database will not again look at the opportunity regardless of how events have changed or how well the numbers have been refined. We have seen institutional investors apply this argument even after a client has gotten an independent experts report. “The rules are the rules, Paul.” It still rings in my ears as a comment for the reason they said “No” was the client did not have an independent expert’s report. Fortunately, for our client, another investor seized the opportunity based on the independent expert’s report.
One of the key factors in life is that people invest in people. It really doesn’t matter whether you’re dealing with a venture capitalist in Melbourne or a family office in Kuala Lumpur. What is critical is that people can meet and deal with people with humankind empathy.
Some organisations which work in our space work on a transaction basis. Generally, is really all about the numbers and if you get the numbers right somebody should be able to talk somebody into a transaction. That may be true for some businesses but most of Projects RH’s clients are new businesses or a business was something special, they may have a technology resource or way of doing business which is different. Each requires a belief that the founder and/or management can deliver what’s on paper.
People Power
Even when you have done all the numbers, about 1/7 of the world’s population works on a transactional basis. The balance needs also that human connection which David Thomas so eloquently describes as you need to have at least 3 cups of tea. In much of the world we need to build trust first. At the 1st cup of tea, we introduce each other and learn. If we are asked to have the 2nd cup of tea, we are working towards being friends and developing trust. If we are called back the 3rd cup of tea this is a sign that we are being treated as friends and are beginning to be trusted. It is my experience that at the 3rd cup of tea stage, just as you think you are about to go home, the most senior person from your host will invite you to go for a walk. During this walk you may talk of many things, family, soccer and then your project. As you shake hands and say farewell be assured your project has been fully analysed but more importantly the investors want to do business with you because they believe in you as a person.
This process, like so much of life, requires us to be authentic and positive. It is this plus having being fully prepared which will give us the confidence to close the deal.
At the moment, it is hard to share a cup of tea but amazingly people are doing just that and having virtual lunches. What is important is we need to have the time to be committed to building the relationships which will serve the business long into the future. It is important also that we respect these occasions and dress appropriately.
Background / History
At Projects RH our role is remarkably simple. We need to identify and communicate to potential investors and lenders:
- What is the problem?
- How does the product or service solve the problem?
- What is in it for the investor and lenders?
Whilst this does sound simplistic, communicating clearly these three things are the keys to getting an investment decision.
We must have the same story answering these questions in our one-page teaser, pitch deck and information memorandum. In reality, unless we can convince the client to see the one-page teaser, all our efforts may be in vain. We need to be prepared it to make different documents for different investors and lenders when we know they have specific issues they like to see addressed. It is important we recognise the sensitivity of investors.
Our focus is to build on solid, ethical and committed relationships. We know our clients and we will need to return to the same investors and lenders so we must deliver what we promise.
Communications
Our job is to introduce projects to people who can fund them. When we introduce a project, we introduce people and companies. Projects RH does not provide investment advice, credit advice, accounting advice, or legal advice. What we do do, is we take our clients to get the appropriate advice they need. Our client company founders and their boards are the ones who issue and sell the shares. Our job is to prepare them for the mission. This preparation includes managing media profiles and rehearsing their presentations. We are strong advocates of good websites, a presence in LinkedIn and sending the client a video. Our strategic partner for videos is York Studios in Melbourne. The themes in all our media and social media need to be the same. Carmenza Hoyos Llano has overall responsibility for our client’s media presence.
Given we believe first impressions count and in most relationships, you need to hit it off at the beginning, we help our clients manage their image in a number of ways. We do offer our clients access to our brand management and digital marketing team based in Colombia led by Anna Cristina Bueno.
We seek to embed ourselves with the client as part of their team to ensure that gaps in their management team are filled. We see ourselves as the people who prepare and/or check the financial model. Having understood the business case, we work with the team to prepare the company’s information memorandum for the market. We need to stress it is their information memorandum and we can only make suggestions. We then work with our client’s team to prepare a slide presentation and a one-page summary.
Modern Australia
Projects RH is unashamedly about connecting projects and money. This means we create opportunities for our clients to meet and work with potential investors. Each client is different and we respect this difference. We do have a process whereby we get to understand the client and the business. We work with the client 1st to build a business model so we can understand what they’re hoping to do; we then prepare an information memorandum or storybook of what they want to do and how it will work, plus what the investor will get. We then work with the client so that they can present this story and this requires the preparation of a pitch deck (slide pack) and the all-important one-page teaser. If you cannot sell your story in one page you really don’t know what you want.
Our job is to introduce the client and their project idea to someone in our network or someone we can network to. Our network takes us to credit professionals, investment analysts and private investors. It also takes us across Australia and out to Asia, Europe and the Americas as we chase sectoral investors.
One of the advantages of having international investors into Australia is that they also bring with them technology training and systems.
Events of 2020
Whilst many of us will remember it as the year we spent much time working from home and not travelling, what 2020 should be remembered for is how it’s changed the market.
2020 will be remembered as the year when investors had the opportunity to be very choosy and demanding, but more important it is a time when our market proved to be truly global. In no longer matters where you are because nobody else is travelling either. If you want to have a meeting with a sectoral investor based in Hong Kong or Paris, or even New York no one is demanding that you come. Meetings are by Zoom and other media and people can be patched in from all over the world. In turn this is making our presentations and information memoranda even more important.
From the investor and lenders side, we are getting very clear guidelines of what they want. 2020 is a year where established businesses are seeking debt and equity; this is making it harder for new businesses and they may need to accept terms they don’t like from both lenders and investors. What is important is that both lenders and investors are being upfront about what they want and it’s unacceptable to the client we can quickly move on.
Conclusion
Introductions are critical to any business seeking to be connected to debt or equity. Projects RH is very pleased with what we do in funding & financial services, and we only take forward clients we believe can deliver what stated in the information memorandum, financial models and business plans. Ours are warm introductions as we have assisted in the preparation of the proposal and discussed it with a potential investor prior to the meeting. We work with our clients to ensure that when they go to market that they are ready and are perceived to be ready. 2020 is clearly the beginning of a decade of a further globalisation of our market and more importantly for Australia to be seen to be part of a global capital market system. We are seeing Australians increasingly invest offshore in the areas of their existing expertise and for foreigners to want to lend and invest into Australia based on the fact that they like investing into the Australian market and they believe that they understand the types of client Projects RH has and sectors they work in. Clearly, we focus our introductions on people we know who have a track record of investing in a particular area.
We believe our process and coaching assists our clients to access investors and lenders so that they become partners in the long-term the growth of the business.
Projects RH is not a licenced financial planner. If the director of our corporate client needs professional advice, we would refer them to our strategic partner, Graham Kinder, of RiverGold Capital, who is an appropriately certified financial planner.
Projects RH is not a licenced credit adviser. If our client is seeking conventional debt as part of their funding strategy, we would work with a licence credit adviser such as Barry Watkins of Clever Finance Solutions. Often our investors will want to be hybrid security investors. For the purposes of this paper debt includes hybrid securities.