Help Investors Make Money, and There Is a Next Deal

There is a blunt question we are often asked: in your trade, what makes anyone come back a second time?

Let us state the view first. Returns. There is a line in the Archive, in "To Entrepreneurs and Investors", that is the source text for this volume: Glacier Capital insists on co-investing its own capital in the projects it serves deeply, because helping investors achieve steady returns is the underlying basis of a lasting partnership. This volume has written about six actions: the profile, screening first, the full picture, meeting first, materials, measures. The six actions are the path, but that line is the destination.

So why returns, and not something else? Because everything else expires. A story gets told out, goodwill dilutes, an information gap is levelled. Only the money on the other side's books cannot be erased. In other words, we cannot earn a repeat mandate by telling stories. Someone asks: does goodwill not count? It counts, but it does not settle the account. There is no exception to this.

A Repeat Mandate Is the Score Investors Give Us

There is a piece on this site called "Repeat Business, the Most Honest Review". That one is about the review; this one is about cause and effect. The review is the effect. Returns are the cause.

Why is an investor's score the hardest? Because he sees dozens of advisory firms in a year and pays a real opportunity cost. An entrepreneur's satisfaction can hold some goodwill. An investor's next mandate cannot. He comes back only if last time's account did not make him look bad. On this one we are fairly confident.

We do twenty or thirty deals a year, and half are existing clients coming back for the next round. That half is not produced by sales. It is produced by the account from the last round. It amounts to the market voting for us again every year. Get the vote wrong and there is no vote next time.

One more thing is squeezed out by busyness more easily than anything else: staying in touch with investors when there is no deal. Call only when you have a deal and what he remembers is a project, not a person whose judgement is reliable. This work shows no output in the current period, so it is always the first thing cut. Yet it is exactly the soil a repeat mandate grows in. Give judgement away in quiet times and someone picks up when you are in a hurry. So is judgement given away wasted? No. It is provisions.

We Put Ourselves in the Same Boat First

If that line is only a slogan, it is worth nothing. It needs collateral.

Glacier Capital's collateral is its own capital: co-investing in the companies it has served deeply. If the judgement is right, we gain together. If it is wrong, we carry it together.

Why insist on putting money in? Because without money in, you do not look seriously. Under a pure service-fee model the incentive lands on closing, not on the quality of the project; the outlook turns shorter and you see less. Make a person pay and the look in his eyes changes at once — he wants to check every page of the materials again. This is also the watershed between a boutique investment bank and a matchmaking broker.

We should also be clear about our boundary. We are advisers, not the ones who set the price. Whether a company is good is not decided by one side's preference. Judgement is not established by claiming it either; in the end the money's result speaks. So the effort goes into how investors actually respond, not into our own preferences. What an investor asks about first is never the odds. It is safety. Someone has to fire first before others dare follow. Our job is to find the person willing and able to price, not to persuade everyone at once. This is a line we drew ourselves.

The Archive is specific about the gatekeeping we do for investors: verify that the orders really close the loop, look at the founder's integrity, look at how the secondary is arranged, look at whether the existing shareholders still want to follow on. One more we hold tight to: do not call every company number one. In a winner-takes-all field, argue why it is out in front. Where it is not, say honestly where it sits in the top tier. Exaggerate once and you save a week; break trust once and you lose a companion of many years. That arithmetic does not take long.

Volume VI ends here. Investors are upstream of industry insight, and they are companions on the road. The water upstream has to be clear, and it has to be living water. Living water has only one sign: the money was made, and the people came back.