With apologies to A White Christmas

I'm dreaming of an angel deal
Just like the ones I used to know
Where the profits glisten
And the workers listen
To hear my wisdom on the phone

I'm dreaming of an angel deal
Where every blank cheque that I write
Makes the deal terms tight
And may all
My deals reach new heights

I'm dreaming of an angel deal
Just like the ones I used to know
Where the profits glisten
And the workers listen
To hear my wisdom on the phone

I'm dreaming of an angel deal
With every blank cheque that I write
Makes the deal terms tight
And may all my deals
May all my deals
May all my deals
May all my deals come out right

AngelNews is coming to town

You better watch out,
You better not cry,
You better not pout,
I'm telling you why:
AngelNews is coming to town!

We’re making a list,
And checking it twice,
Gonna find the angels naughty or nice.
AngelNews is coming to town!
We see when you're investing,
We know when you are not.
We know when you've been bad or good,
So be good for goodness sake!

OH!...You better watch out, You better not cry
You better not pout, I'm Telling you why.
AngelNews is coming to town.

We see you when you're investing,
We know when you are not.
We know when you've been bad or good,
So be good for goodness sake!

Santa Baby - with apologies to Eartha Kitt and Kylie!

Santa baby, just slip an exit cheque under the tree for me;
Been an awful good girl, Santa baby,
So hurry down the chimney tonight

Santa baby, no tax enquiry on me too;
I'll wait up for you, dear; Santa baby,
So hurry down the chimney tonight.

Think of all the deals that I've missed;
Think of all the bad ones that I haven’t dissed;
Next year I could be just as good... if you check off my Christmas list

Santa baby, I want to join a syndicate, that's not a lot;
Been an angel all year; Santa baby,
So hurry down the chimney tonight.

Santa honey, one little thing I really need...
Shares... in a unicorn, Santa baby,
So hurry down the chimney tonight.

Santa cutie, fill my stocking with those tax breaks and cheques;
Sign your 'X' on the line, Santa cutie,
and hurry down the chimney tonight.

Come and trim my Christmas tree with crowdfunding prizes;
I really do believe in you;
Let's see if you believe in me...

Santa baby, forgot to mention one little thing... a job...
And I don't mean for free; Santa baby,
So hurry down the chimney tonight

Hurry down the chimney tonight
Hurry, tonight!

What has luck got to do with it?

Last year I was fortunate enough to be on a panel, with the theme being EIS investing, when the panel was asked, "how much of what you do is down to luck?" 

To this question, a fellow panel member (and competitor) responded that "about 60% of what we do is down to luck." At this point, I nearly fell of my chair!

My answer to this question was entirely different and I'll tell you why. If you are investing by playing 'the numbers game,' i.e. you pick a number of EIS eligible companies just because they are eligible and your due diligence is based solely on financial results, then luck will play a massive part in your investment. If, however, you select companies to invest in based on your experience within a sector, and knowing how to grow a company within that sector, then there should be very little luck involved.  

The 'luck' comes at the early stage of a business, with the idea or eureka moment. Taking it to market and growing the business is then about diligence, hard work and utilising relevant knowledge. 

One of my favourite examples of this is a good friend of mine. The gentleman in question owned a couple of butchers shops and was making a living but nothing more, when one day just before Christmas a customer called in and asked him if he could put together a meat hamper for a client. My friend had to ask what he meant, but once explained he realised this was a potential new market for him. He then went on to create a hamper business and earn a not inconsiderable amount of money doing so. The luck was the idea, the success was down to a hell of a lot of hard work, research, diligence and desire.

I am therefore confident in saying that almost nothing we do is down to luck. If we do our job correctly, know and understand the businesses we invest in and utilise sector experience then we are not reliant on luck.  Yes, any small unlisted investment carries greater risk than normal but when things don't go as well as planned we will able to understand why and usually it will be because something was done incorrectly rather than just being 'unlucky.'

My recommendation to anyone considering investment in an alternative investment, such as EIS, is to utilise sector experts. By that, I mean a manager who can demonstrate clear understanding of the sector into which they are investing. For example; if you want to invest in media, use a manager who knows this industry inside out and similarly if you want to invest in technology or life sciences, identify a team that has considerable experience in the respective sector. Look for specific experience, don't try and play the numbers game.  Your due diligence should identify who the key decision makers are within the manager and how much relevant experience they have. When investing in small unlisted companies; would you rather your clients' investment was overseen by someone with experience in the City or someone who has built businesses, has sector experience and knowledge and who will take a hands-on approach to mentoring and supporting the underlying invested company?

Ian Warwick is Managing Partner at Deepbridge Capital LLP

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For further information please contact:

Andrew Aldridge, Head of Marketing, Deepbridge Capital LLP

[email protected]

07734664313