Investment Insights from Mr. Brad Triebsch
Written By: Amanda Moore
The Entrepreneur Mentor Students enjoyed a wonderful lunch, courtesy of the Central Valley Fund, and excitedly welcomed Brad Triebsch, Principal at Central Valley Fund (CVF). The Central Valley Fund was the first successful venture fund focused on investing in California’s Central Valley. The CVF uses its $120M investment to finance small and mid-size businesses in later stage growth and expansion, strategic acquisitions, ownership transitions, and recapitalizations. The CVF provides both subordinated debt and preferred equity (mezzanine capital).
The CVF doesn’t invest in just any company, it uses a strict guideline to assess and identify potential opportunities. It looks at a company’s operating history (existence for 3+ years), companies with $10M+ in revenue, strong cash flows (in excess of $1M), experienced management teams, and geographic proximity. The CVF has learned through experience that “investments typically do better when the investor is closer and can be more hands-on”.
However, despite the wonderful investment opportunities for later stage companies, Mr. Triebsch stated, “We need an early stage fund to get our Central Valley companies through the “Valley of Death”. He mentioned how the valley is missing one key ingredient in venture funding – Series A round investors. Mr. Triebsch stated how Series A round financing takes a different skill set entirely and the CVF is looking into possibly branching into early stage investing in the future.
The Entrepreneur Mentor Students asked Mr. Triebsch if he could give insight and tips when faced with a giant investor such as the CVF. He stated the very first thing you need to do, before you meet an investor, is “research everything about them – their interests, potential emotional connections, etc.” Mr. Triebsch went on to further state, “When an investor comes to your company, be nice, serious, and organized. Also, be clean shaven, have a welcome sign for the investors, have the cost accountant have print ups of financials ready, and look busy!” He said there are two things to remember when facing a potential investor
- “See your preferred investment partner last – your pitch will be better.”
- “Don’t joke with potential investors about money or losing money.”
Mr. Triebsch said many times investors will seek 51% of the company in exchange for their investment in order to take control of your company. He said when an investor is offering to throw a lot of money your way, it can be tempting. However, Mr. Triebsch stated, “Don’t give up control of your company even if you’re surrounded by Harvard MBAs!” He told us in order to not feel pressured, we need to start thinking about money before we need it – “the best time to go see a bank is when you don’t need money”.
Mr. Triebsch left us with a few tips as we begin our entrepreneurial journeys:
“Surround yourself with smart, top-tier people and stay away from toxic people”
“Have fun along the way, life doesn’t need to be drudgery everyday!”