Do you need to transform your brain?
The purpose of this post is to share my learnings and unlearnings, with the expectation that some will be of value to you. This post was 100% written by me – not by AI. When you send me an email, my response is 100% written by me.
Why am I able to help business leaders succeed, without telling them what to do?
- The leader must make major critical decisions and business changes they’ve never successfully done before.
- Leaders who want me (or a subject matter expert) to tell them what to do will usually fail. Why? Hearing what I say, seeing my presentation, or reading my presentation results in leaders having: little in depth understanding, low long-term retention of knowledge, little ability to successfully answer challenging questions, and little ability to make to make ongoing changes to the leaders’ actions.
- What results when I ask leaders questions and suggest the thinking they need to do to make their decisions and manage their execution? Leaders have a deep understanding of the knowledge, retain the knowledge for long-periods of time, can successfully answer challenging questions, and can make ongoing changes as they execute.
- To learn and understand something new requires their brains to create new neural connections. Brains naturally resist this process. Brains will find many reasons not to change. Changing the mental model of a leader results in mental discomfort, stress, and pain.
- A leader doing their own thinking results in them persuading and convincing themselves, with less resistance and pain.
Sharing my learnings
Below are links to my website containing new and revised articles since my last update in May. The critical learnings are included. Each article designed to enable discussion among founders, owners, shareholders, investors, CEOs, and boards of directors. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.
Links to my points-of-view articles:
What are the core components of talent? V5
- There are 10 core components of talent.
- People often focus on just 1 component of talent: Crystallized intelligence (e.g. historical skills, knowledge, experience, etc.) and ignore the other 9. This often leads to major problems, because historical skills, knowledge, and experience are quickly becoming obsolete.
- Any role many be comprised of both people and technology (such as software, including AI) talent.
- The 10 core components of talent apply to both people, technology, and AI.
https://koorandassociates.org/creating-business-value/core-components-of-talent/
How profitable are public stocks?
- The majority of US public stocks from Dec 1925 to Dec 2023 had negative returns.
- The best performing 4% of US public stocks from 1926 2016 provided the entire stock market gains which exceeded one-month Treasury Bills.
- S&P 500 outperformance relative to S&P 600 small cap and Russell 2000 has been increasing over time.
- Most U.S. large cap funds have underperformed the S&P 500 for the past 15 years.
- Most U.S. mid-cap funds have underperformed the S&P mid-cap 400 for the past 15 years.
- Most U.S. small-cap funds have underperformed the S&P small-cap 600 for the past 15 years.
- It appears to be close to impossible to predict the future performance of equity funds by looking at past performance.
https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-are-public-stocks/
How profitable is private equity?
- The traditional PE equity value creation model appears broken. For 40 years the approach has been financial leverage and increasing the price to EBITDA multiple. This approach now often appears to fail.
- The future is impossible to predict. The future is uncertain. The future cannot be predicted by extrapolating historical trends.
- Successful GPs and LPs will be those who have the desire and ability to transform themselves.
https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-is-private-equity/
How profitable is venture capital?
- If you were good at predicting which fund managers would be successful, you could have had excellent returns. But many Limited Partners (LPs) lost money from their investments.
- The trend has been that the % of funds providing any cash return has been declining.
- I have read multiple articles that some LPs have started to question VC fund managers who are showing high IRR results (which include both actual realized returns and estimated future unrealized returns) while the LPs are receiving little or no cash because the fund managers are unable to sell their investments to buyers.
How profitable are search funds?
- The IRR for traditional search funds in Canada and the US has been 35.2%.
- To make a profit by investing in search funds, you need the ability to predict which people (searchers or managers of funds which invest in searchers) have the talent to be successful.
- 66% of search funds with an investment return, lost some or all their investor money. A small number of search funds generated much of the IRR return e.g. 8 exits had IRRs of 100% or more.
- You may need to fund between 30 to 45 searchers, to have a high chance of approaching the IRR for the asset class as a whole.
https://koorandassociates.org/selling-a-company-or-raising-capital/how-profitable-are-search-funds/
How profitable is angel investing? V4
- Someone making investments in individual angel startups has the potential to make profit if: has the capital to create a diversified portfolio, the time to do due diligence and support the portfolio companies, the talent to select potentially profitable startups.
- Someone making investments in an angel fund has the potential to make profit if: has the time to do due diligence and the talent to select fund managers who will be profitable in the future.
- In either of the above cases, you may need to wait 10 or more years before achieving a cash profit.
Are you an angel investor or gambler? V3
- You may need to create a portfolio of 20 or more companies.
- You might need to invest $800,000 or more.
- You need the skills and time for both due diligence and helping founders succeed. Money by itself is not enough.
- You need to determine if you’re putting capital into early-stage companies because: you are an investor; you are a gambler; or this is a charitable activity and not part of your overall investment portfolio.
Traditional succession planning dooms your company to failure? V3
- Board directors and C-Suite executives must be able to make major decisions on the day they are appointed. Needing to learn about the company for 6-12 months risks failure.
- Board directors and C-Suite executives need to have the capabilities to succeed in a future which is very different from the past. These leaders are of limited value if they only have the skills and experience to solve yesterday’s problems with the day before’s solutions.
- Board director and C-Suite talent requirements must be defined in terms of the 10 core components of talent. The traditional approach of focusing on crystallized intelligence (i.e. historical skills, knowledge, and data) is insufficient in today’s turbulent and hyper-competitive world.
https://koorandassociates.org/creating-business-value/traditional-succession-planning-is-obsolete/
Personal Update:
- Mentored a startup at the University of Toronto, Department of Engineering. The approach was based on weekly advisory board meetings.
- Continued as Board Director at a private company.
- Continued as a Patient Family Advisor at Sunnybrook Hospital.
- Continued my long-term fundraising for the Geoff Carr Fellowship at Lupus Ontario. Over the past 19 years family, friends, neighbours, and colleagues have contributed over 276.000,000. You can use the donation link later in this update
- Continued as a member of the Angel Capital Association in the US and the Institute of Corporate Directors in Canada.
- Continued to share with you, and on my website, some of what I’ve learned and unlearned, with the intent that some of you will find value. The learnings and unlearnings are applicable to any size company, ranging from early-stage startups to large global enterprises.
I continue to focus my time to maximize the value and impact of my two professional purposes: #1 Enabling current and emerging business leaders to succeed, #2 Enabling business leaders to have a positive impact on society.
To support the Geoff Carr Fellowship at Lupus Ontario
Koor and Associates 