Dr. Bert W.M. Twaalfhoven has business investments, companies, and an entrepreneurial organisation that spans the globe. He is perhaps the archetypal Business Angel and Venture Capitalist. This issue, Dr. Twaalfhoven shares his special insights and experience with Anthony Rommens.
What do you prefer to see in an Entrepreneur, Business Plan or Executive Summary for a company that you are evaluating?
The entrepreneur, his networks (i.e. advisors, partners,) and of course his C.V.. Business Plans should be specific; the first year projections by the month; second and third year projections by quarter, and annually in the 4th and 5th years. I also want a negative business plan as most first plans (including my own 54 start-ups) never made it.
In reviewing a prospective business investment’s market size and competitive landscape, do you have any general guidelines?
Thorough understanding of an industry and detailed competitor analysis is key. I have hired 650 students from 25 Universities- 10 countries (over forty years) to do this type of analysis. Assessment is performed each year on every investment. In addition, I like to review the background of the team and also that of their Board of Directors or Advisors, who help the new enterprise.
Regarding Due Diligence on Entrepreneurs, do you have a method? How long does it normally take?
Of course, I have to meet them in person and check all of their references. ‘Face to Face’ is most important. Do not forget that most propositions are not worthwhile; we must have looked at 2,000 prospects and reject 90%. The other 200 have taken anywhere from 4 weeks to half a year of continued due diligence. As a Venture Capitalist, which is my other experience, we rather perform due diligence with other VC’s particularly if they are geographically better positioned or have strong local industry knowledge. For example; Life Science investments in Cambridge (UK) and Boston (USA).
What do you most prefer to see in place with businesses involving Intellectual Property?
Thorough global patent search and protection.
What key management factors do you like best? Technical, financial, and of course understanding markets, and marketing experience. In the case of investing in Europe; a multinational team - so I can grow my companies across borders. We had 6 nationalities on the Board with 12 in Management.
You initially started being more hands-on with investments. Of course, as your holding company grew larger, you also used formal management to look after your entrepreneurs. Do you have any management suggestions regarding looking after investments?
Personal contact and visit, even today at my age of 77, I must travel to Kuala Lumpur, Tsingtao China, Moscow, Strasbourg, Boston and San Jose to see where I have put my money. I still cannot afford surprises!
What do you think about investing in an area outside of an Angel’s specific expertise?
Not recommended, unless the other Angels know the industry and are as committed as I am.
You are a balanced individual who also has an educated and successful family. Could you let us know what has been your secret to both business and family life?
Early out of the house with all the risks involved. Our eight children studied at 12 Universities in 7 countries; they all have had part time jobs starting at 15 years of age. We now have with the inlaws 8 nationalities: “The World is Our Oyster”. Also, with our kids and now 21 grandchildren have all learned from their failures as the Chinese proverb goes: “Failure is the Mother of Success”.