WalkerTek Blog

I attended a networking meeting today and the guest speaker was a fascinating individual.  His name was Ziad K. Abdelnour, he is the president and CEO of Blackhawk Partners.  He presented valuable information about what he looks for when doing a venture deal.  His no bullshit, results oriented approach seemed refreshing in a world of unrealistic valuations and venture deals that don’t seem to make any sense. I believe this information can be adapted to help decision making at any level.

His approach is a five step process.  The first requirement is that he only invests in companies with operators that perform.  They must have a proven track record and be able to execute.  He would prefer people that have built successful companies (or even unsuccessful companies) to people that have never been there and don’t know what it is like at those levels.

Next he requires them to have intelligence, preferably intelligence he doesn’t already have, which is tough because he is very well informed.  He expects them to have done their research and due diligence.  Too many people are lazy when it comes to doing the necessary research to ensure their venture will work.

Third they must have a laser like focus.  They can’t be distracted by every new thing that comes their way.  If they are they will go off track and lose their way.

Next they must have speed of execution.  He likes his companies to be profitable within six months.  There must be a clear path to profitability.  Any company that does not have this is not scalable and thus doesn’t have the five to 10 times growth prospects that he is looking for.

And finally they must have some skin in the game.  It must be in their interest to run the company and run it well.  Without this they will not have the incentive to put everything they have into the venture.  The entrepreneur should be the one that can’t sleep at night, not the venture capitalist.

He looks to buy companies at no more than five times EBITA, and at least with one deal he outlined, the goal was to be able to sell the company after adequate growth at 10 times EBITA within three to four years.  He does not like to over leverage a company he invests in.  He believes that business is war and that you must do what it takes to make money and never lose focus that making money is the ultimate goal.

He also mentioned that too many business owners think that if you’re in business you don’t have to concern yourself with politics and vice versa.  He feels this is a big mistake and that there is an opportunity for people involved with both sides.

Overall I thought it was a wonderful meeting and his insight was very valuable.  If you have the chance to hear him speak you will not be disappointed.