The Three-Stage Rocket Tests Us

The last line of that passage in the Archive reads: whether the firm is willing to look at the next deal. Up to here this volume has been all actions, and someone has to check whether the actions are right. We built ourselves a three-stage rocket: close rate, annual table-turn rate, institutional give-back rate. Let us state the view first. All three measures test our own process. Not one of them tests the market.

Why not test the market? Because you cannot. Our trade is more like farming. The harvest depends on downstream demand, technical progress, how warm the money is, and policy, and none of the four is in our hands. There is no scale effect either: double the headcount and the harvest does not double. But the process is in our hands. The weather is not ours to set. The process is.

Stage One: Did the Deal Get Done

First, the close rate. Of the deals we refer, how many finally close. The denominator is small, twenty or thirty deals a year, half new deals and half existing clients coming back for the next round. But a small denominator leaves nowhere to hide. It checks the homework of the earlier pieces: whether the profile was accurate, whether the screening was strict, whether the full picture was explained. And when the number looks bad? Check the process.

A cold market is weather, and you cannot inspect it; the process is ours, and you can. Work backwards through it, one step at a time. The first duty in fundraising is safety, not odds. Until someone bids first, everyone is watching, because the firm that fires first carries the risk of a wrong price alone. So the real work at this stage is not persuading a dozen firms at once. It is finding the one person willing and able to price. Get the lock right and everyone else's question turns from whether it is worth it into whether there is any allocation left. You only need one to fire.

Stage Two: Did the Relationship Deepen

Second, the table-turn rate. How many times in a year the same investor is willing to sit down with us. One closing can be luck. Sitting down for the third time in a year can only be trust. This is what a repeat mandate looks like on the investor side. The table-turn rate measures the depth of a relationship, not the length of a list. A list can be accumulated. Depth can only be waited out.

This one is a reminder to ourselves. The seat of a financial advisor is not the place to pass heavy judgement on a project — otherwise why would so many people invest? One firm's likes and dislikes are one vote, and what one firm dislikes is not necessarily bad. So the table-turn rate is more reliable than our preferences: it records how firms actually respond, not how we feel about ourselves. Judgement is not established by claiming it.

Stage Three: Is the Ecosystem Turning

Third, the give-back rate. Whether the firms we have worked with turn round and hand deals, insight and relationships back to us. Those who treat us as a channel are gone once the table breaks up. Those who treat us as a system keep flowing back. Once that return flow starts, we have become part of their system.

This stage has one more lock we put on ourselves: we insist on co-investing our own capital in the projects we serve deeply. Put money in and the way you look at a project is different. Why? Because the account is booked against you. A rule is more reliable than self-discipline.

The three stages build on each other: get the deal done, then deepen the relationship, then get the ecosystem turning. If a stage flames out, go back to the matching pieces and find the reason. The numbers can look bad at any time. Bad numbers are not frightening. They point the way. The process is ours, so fix it.