CBS Investment Funds Team10
 

CBS Investment Funds Team10

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CBS Investment Funds Team10 CBS Investment Funds Team10 Presentation Transcript

  • CBS Investment Funds Kumar Mani Andrey Menemshev Pradeep Ramani Neeraj Kulkarni Sophia Mighty LEAN LAUNCHPAD with Steve Blank, Bob Dorf and the other awesome 15 teams! AUGUST 26-30, 2013 Total Interviews 76 (14 scheduled)
  • Columbia Business School MOVIE 2
  • Columbia Business School On Day 1 3 Money Mgmt It Just Works (Better than 2-20 fund or Betterment etc) “Hedge Fund” * 0-25 cost * Above market returns Brokerage Research Legal Regulatory Audit/Tax Core: Research; Enabling: Legal/Audit/etc Industry 2-20 We are for 0-25 Key costs – transactions, research, management Personal, direct, Tier 1 Individual Not costly, but Tier 2 Individual Cost-sensitive Mostly “mass”, Some “niche” (Existing investors are mass) T1/T2 pays 0-25% Performance fees only WE THOUGHT EVERYONE WOULD JUST UNDERSTAND OUR STORY. WE THOUGHT ‘IT IS ABOUT JUST MONEY’ AND THAT’S THE BALL GAME
  • Columbia Business School But on day 1 we were asked: 4 Do you know your customer? Really? Do you really understand them and their pain points? Have you really figured out why they will buy from you?? We said: Size of market is XYZ Demographic is XYZ Finance is $$$ Customer = number, chart, graph, statistic (with standard deviation) To which they said Get Out Of The Building And Discover Them!
  • Columbia Business School On Day 2 5 Money Mgmt Current 2%- 20% We are 0%- 25% ? Fin Analyst (Recommend, not Manage) Investments Portfolio Risk Brokerage Research Legal Regulatory Audit/Tax Cap Introducer (recommend FA) Core: Research; Enabling: Legal/Audit/etc Build relationship With Cap Intro Industry 2%-20% We are for 0%-25% Key costs – transactions, research, management (See next chart) Personal, direct, Tier 1 Individual Not costly, but Tier 2 Individual Cost-sensitive T1/T2 pays 0-25% Performance fees only T1/T2 – Decision Makers (knowledge?) ? Consider FA - Recommenders ? Cap Introducer as “Distributor” We found The High Net Worth, our perceived customer, will only talk to us if his Financial Advisor or Capital Introducer okays us. We also need to revise our value proposition beyond just the 2 and 20. (Why, our classmates asked, do you guys think you’re so special?) And the teaching staff said: Re-look at your value proposition and form a revenue model
  • Columbia Business School On Day 3 6 Scale (expenses) 1. Operate in GZ until $50M 2. YZ when $100M 3. Establish corpus to sustain YZ We started with a very important customer interview (lasted 2 hours) that really blew our mind. We understood how a real HNW thinks and works. We also formed a revenue model (this was easy after so many finance classes). To which the teaching staff said: Now explain your business model on the canvas in this context
  • Columbia Business School By this time ● We had done a whole bunch of interviews ● We had done a whole bunch of presentations ● We even pitched a few people But it felt like we were looking at a complex problem 7 And the winning move, while there, wasn‟t really apparent
  • Columbia Business School On Day 4 8 We explained: ● We have been performing well against the market for the past 5 years (good and bad years), always over the best index ● We do deep fundamental analysis and only stick with good safe companies with good earnings ● And we are disciplined about how we invest. (We don‟t hesitate to pass.) OUR WINNING MOVE: Our disciplined market-beating investment process, and our 0% management fees that aligns YOUR (investor) interests with ours.
  • Columbia Business School On Day 5 9 Money Mgmt Current 2%- 20% We are 0%- 25% „Value Investing‟ Investments Portfolio Risk Brokerage Research Legal Regulatory Audit/Tax • Core: Research • Enabling: Legal/Audit/Tax • Relationship with Cap Intro Key costs – transactions, research, management Operational costs – Taxes, Brokerage, Auditing, Legal and Bookkeeping Other costs – Rental Space, Events Personal, direct, Not costly, but Cost-sensitive • T2 individuals with at least $250K to invest • Friends and family, classm ates • Cap Introducer(rec ommend FA) Performance fees from investment profits of • Friends and Family, Classmates • T2 Individuals • Investors acquired through Cap Introducer • Cap Introducer as “Distributor” • Friends and Family, Classmates • Organized Events Focus on a specific segment of potential investors • Friends, family , classmates • T2 individuals with at least $250K to invest Your connections and network are your channels Our value proposition is not just our unique management fees It is also our „Value Investing‟ method
  • Columbia Business School And now ● We would like to invite you to learn more about us and invest with us ● Office hours ● One on one sessions (sign up sheet available) ● As many classmates suggest, we are happy to explain our investment process in more detail so you can make the winning move 10 Kumar Mani Pradeep Ramani Andrey Neeraj Kulkarni Menemshev & Sophia Mighty
  • Columbia Business School Those who inspired us, and showed us the way 11 And all of you!
  • Columbia Business School For the curious 12 The movie is the true story of real life US chess champion Josh Waitzkin. He found a real teacher in Bruce Pandolfini. Warren Buffett found his teacher in Ben Graham. We, Team 10, found our teacher in Bruce Greenwald and many other professors at Columbia Business School. But more important, we found our passion for value investing. This, as Bob said on Day 1, is our “inner light”. It is our real winning move.
  • Columbia Business School THANK YOU! 13
  • Columbia Business School APPENDIX ● Number of interviews: 12 + 10 + 11 + 13 + 16 + (14) scheduled = 76 ● Key Hypotheses: H1 – HNW will directly invest (No, will invest after FA OK/s) H2 – Everyone is just interested in money ● Insights: (1) Everyone wants better money management (2) Personal interactions, 1x1 Q&A is key to Get customers; returns necessary to Keep customers 14
  • Columbia Business School REVENUE MODEL $20M AUM (12%) In 2/20, Investor gets $1.52 With us (0/25) Investor gets $2M Our fee $400K 15 AUM ($M) Chart showing 7% returns