Since the Industrial Revolution in the 18th century, companies have existed with the aim of solving problems and, as a consequence, generating value for their shareholders. And even with all the technological developments, the logic until recently was always this. There's nothing wrong with that. However, over the years, the way people see business has changed. And, from then on, other factors began to be considered.
In line with what studies show on customer adherence and employee engagement with companies and brands guided by good practices and social and environmental commitments, investment funds emerged with the aim of investing in organizations that, in addition to being good businesses, generate positive impact on society.
In addition to the company's ability to generate financial returns, other assumptions are analyzed. The size of the market is assessed, whether the problem the team proposes to solve is relevant, whether the product is of quality, whether there is production and delivery capacity and what the entry barriers are, among other variables. But is this enough?
“The success of the investment process is also about reputation.”
For an investment journey, which can last up to 10 years, to be successful, it is very important to evaluate who the people involved are. What does that mean? The success of the investment process is also about reputation and involves questions and answers.
1. What is the trajectory of the entrepreneur and the team that is part of the project?
2. How did they work in other businesses and business relationships?
3. How do they face challenges?
4. Along the way, if there was any discrediting situation, how did you deal with the episode?
If the answers include transparency, ethics and respect, it is very likely that the company will be at the forefront of opportunities. Credibility will set you apart. However, the opposite brings harm. I followed, for example, a case of lack of transparency between the entrepreneur and the shareholder, which ended in a huge loss of trust and cost him his position as CEO.
On the other hand, I have already experienced a situation in which the entrepreneur, always very correct and transparent, did not accept an investment from a group of investors of which I was part, because the proposed terms did not make sense to him in that situation. Time passed and, three years later, we had the opportunity to invest in the company and reach an agreement. This would not have been possible if the parties had not acted ethically and transparently.
A business is not limited to financial return. It will always be a relationship of trust based on people, on the legacy that the partners and the companies they represent have built. In the end, it's all about a people's journey, which goes far beyond money.
Mauricio Sirotsky Neto is a founding partner of RBS Ventures, managing partner of Maromar Investimentos and member of the Board of the RBS Group
The signed articles reflect the opinion of the authors
