In the last post we addressed some environmental trends of 2020 that reinforce the growing concern with the transition to a more sustainable world. Interestingly, we came across a news story about Bill Gates leading more than $ 1 billion fund focused on fighting climate change by investing in clean energy innovation, which confirmed the idea that this market could indeed be an opportunity for both entrepreneurs and investors
“Anything that leads to cheap, clean, reliable energy we're open-minded to. (...) It's such a big market that if you're really providing a big portion of the world's energy, the value of that will be super, super big.”
These were the words of the Microsoft founder, which led us to ask a pertinent question. What is a good deal for an investor? Bill Gates clearly specified what he was looking for. Although the goals and the points of view of each investor are different, there are certain common points that must be present in any good investment. That's what we'll talk about in today's post!
First, good numbers are important. The most important part of investing is looking at the potential of high returns and a clear exit opportunity. In addition, it is important to know the likely time in the future you may have need of the funds. For the former fund manager John Arnold, getting a quick return is not a problem, as stated in the news:
“Being a 20-year fund with patient capital that’s not needing short-term gains allows us to have a longer-term outlook as well as fund technologies that don’t fit into the traditional VC model as it exists today”.
It is good to obtain return as soon as possible. However, it is preferable to look at the big-picture trajectory, and invest in companies that generate stable returns on invested capital. Looking at BGI’s values, startups take an average of 2.5 years to raise capital and our portfolio counts with 4 exits: Movvo, Mediwise, Samebug and Muzzley. Also, our portfolio includes startups such as FeedZai, which raised almost 80M euros.