As director of the O’Hara Administration investment group, Alejandro Betancourthas invested in companies within the oil and gas, financial, and technology sectors for nearly a decade.
The key to successfully partnering with entrepreneurial organizations, Betancourtsays, is to find ones that are run by the right management team.
“There are 10,000 good ideas out there,” he says. “But not all of them come to be a successful venture — because there are many factors that make them successful. The most critical one is the people.”
Betancourt was drawn to financially back the Hawkers sunglasses brand, for instance, after learning about the founders’ creative approach to product development and marketing, and the affordable, high-quality products.
The company’s business model initially involved distributing a brand of sunglasses one of the founders had purchased during a trip to the U.S. After sales skyrocketed, the team decided to debut its own line. By 2016, Hawkers was producing an annual income of $78 million, according toTechCrunch— which also reported that 90% of the organization’s sales were coming from purchases made via its website.
At the time, Alejandro Betancourtsays social media venues weren’t as widely utilized as they are now, offering early adopters like Hawkers an economical way to promote products.
“[The company] discovered the conversion rate was crazy,” he says. “They became one of the largest and fastest-growing sunglasses brands in the world. [It] was extremely inexpensive to get impressions on digital media; [you’d] spend $100 on Facebook and get $300 in revenue.”
Relying on Strong Oversight
An entrepreneur’s general mindset can factor heavily into Alejandro Betancourt’s decision to invest in a product or service — including how any team he’s thinking of allocating resources to plans to pursue their goals.
“The first thing I look at is the management — their philosophy and the way they function,” he says. “That’s what makes a difference there. I always like to meet the key people and [see if] they are good entrepreneurs. For me, the big rationale is understanding that the people behind it are the right people.”
Being able to trust an organization can operate without constant assistance is crucial, Betancourt says, because investors often need to dedicate their time to multiple ventures — and can’t spend all of their available hours assisting just one of the entities they’re working with.
Alejandro Betancourt, for example, is one of the BDK Financial Group’s original founders and investors. Today, though, he typically isn’t part of the daily functions within the company, which offers banking services to the francophone countries of Africa within the economic and monetary union of West Africa.
“We have an excellent team — top people from the banking industry that have evolved and developed it to be an important player in the region,” Betancourtsays. “When things fly by themselves and go so well, you don’t get involved in the day-to-day operations. That’s what I’m doing with BDK because I consider that to already be a successful venture that has a good strategy and execution on their plan. [When] you have the right people, you just enjoy the ride.”
Guiding Entrepreneurs’ Achievements
Particularly early on in an investment relationship, Alejandro Betancourtfrequentlycontributes a number of resources to help position organizations to thrive.
“They ask me a lot to get put in touch with other companies I’m related to so they can exchange ideas,” he says. “They ask me about what I think about where the market is going, and they are constantly explaining the potential the different strategies they are implementing have, and [asking] how I think they will go.”
Betancourtsays his role can be to provide companies with realistic opinions — and hope.
“You’ve got to be optimistic,” hesays. “It’s your job to support that [entrepreneur], but with a realistic view. You’ve got to bet on it; you’ve got to believe in it — but always with two feet on the ground. Because if you pass the border from the realistic world to a fantasy world, that’s where you get lost, and you can destroy your company and your project. Every entrepreneur has to dream big — but it has to have a route to success. It has to be doable.”
However, even with an investor’s best due diligence efforts and a company’s strongest attempt to succeed, there are times when new ventures just don’t work out.
“Look, 90% of projects that are started fail,” Alejandro Betancourt says. “That’s something you’ve got to live with. Those are the realities of being an entrepreneur.”
In certain instances, perseverance can be key.
“Once I start something, I just don’t stop,” Betancourt shares. “I try to see every single option that could turn negative and try to mitigate it beforehand. Even if the idea is great [and] you have the right people, it’ll always surprise you with things that are not expected. You’ve got to be there to make sure you push through and keep everybody working, focused, being creative, and innovating. That’s what’s given me successful ventures and experiences.”
At times, exiting an investment may be the best choice due to time constraints, operational issues, or other concerns. Yet making that decision can be challenging, Betancourt advises.
“I’m a fighter and when something is going wrong, it [gets] my attention,” he says. “I go really deep into it. I’m the type of guy that sinks with the ship. That’s an issue I’ve got to work on; I’m a good buyer, but I’m a terrible seller. You’ve got to understand when the right time to move on is and not throw good resources into bad money. It’s a really easy [principle] to say and really hard to follow.”
Having a big-picture view of your overall investment portfolio, Alejandro Betancourtadds, can potentially help put investments you’ve departed from into perspective.
“What counts is your batting average,” he says. “You’re not going to always hit a home run, but as long as you have a good batting average, and you are doing well in most of the choices you have made, that will bring you into a good position.”
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