Feet on the Ground


Hello Friends!  Today, I would like to introduce you to a little something at Blackstone Valley Group that we like to refer to as our “feet on the ground” approach. This statement speaks to one of the few basic tenets we model BVG work culture as we interact with entrepreneurs, fellow investors and professional teams across the globe.

Does this approach mean that we keep our feet on the ground and our heads out of the clouds?  Does this mean that we’re a down-to-earth group of folks?  Does this mean that we like to take our shoes off and frolic barefoot in the grass?  At times, any one of these statements might be true… but this is not what I will be talking about today…maybe a later post.

What I would like to bring to light is what we believe to be a key success factor that has helped BVG (Blackstone Valley Group) create a unique position among our peers.

This ‘feet on the ground’ approach refers to us having BVG personnel on the ground, especially in the emerging markets that we focus on: currently India and Mexico out of the BIM (I should trademark this abbreviation — seriously). In fact, I’m on a plane right now as I’m writing this post in order that my feet can be on the ground, which adds a bit of irony, at least, and legitimacy, at best, to this blog entry.

The basic concept evolved as we picked our target markets (BIM) and we found that instead of relying solely on just technology such as e-mail, video calls, WebEx, conference calls, etc., to do business in these focus markets, it is essential to have a “feet on the ground” approach – that is to meet people, see things, gain experience, etc.  We do use technology as an enabler, but not as the only gateway for information exchange.

In this digital age where computers and mobile devices and telecommunications seem to provide us every way in which to connect and stay in touch, what is the reasoning behind jumping on a plane/train/bus/bike/rickshaw and going to the site to meet with the entrepreneurs and see the business operations in person? In our eyes, the relationship between angels and investees is not driven as much by formal contracts and monitoring as it is by relational governance, resulting in mutual trust and an emphasis on mentoring.

For us helping entrepreneurs succeed in the BIM markets has a high level of dependency to the presence of BVG personnel being on the ground with them during our engagement. Getting an opportunity to speak and chat with folks (other than the management team) with direct strings or a couple of knots away with the venture/startup– including the local and regional regulators, politicians, bureaucrats, land/premise owners, directors, shareholders (usually friends & family), neighbors, CAs (Chartered Accountants in India & CPAs for us here), attorneys, is a valuable and increasingly essential exercise. These discussions/meetings whether in an formal or informal setting form an integral part of what we refer to is situational awareness about the opportunity we are interested in. It also helps us gauge the impact of these exogenous factors to the venture/project we are looking to invest in.

A recent experience where this approach influenced our thoughts and decision-making process came during my recent visit to Torreon, (Coahuila) Mexico. I was there to evaluate an opportunity we had screened and had potential to be looked at deeper. It was an e-commerce offering to the commercial/retail sector with the pilot slated to coincide with my visit. As luck would have it, things started off not so well (something which entrepreneurs get very nervous about…my 2 cents: don’t be; we all have been there).

A note here is that the office premises these folks were based in were in the industrial zone outside the city – which was surprising and concerning at that point of time. The office space consisted of a rented area in a ‘virtual office’ type new building (still under construction), which also had provisions to house warehouses, small workshops and offices.

As temperatures begin to soar both internally and externally, I decided to venture out and check the facilities in total. Walking outside, I bumped into the facility owner and in due course shared with him the reason for my visit. I was curious as to why the entrepreneurial team was renting office space for their startup in the industrial zone – was there a tax benefit? Was it a resource issue? Or was it just economics.

The answer surprised me. He said the reason these guys are here is because his facility is the only private owned enterprise in the area offering faster bandwidth, data center hosting, private VPN, COB/DR off site storage. The team needed fast connectivity and were unable to get the project going as the only offering in the market was from the Govt.(Electric Company  – Capped Broadband ) or the University ( which offered connectivity based on strategically placed microwave transmitters – in certain residential/commercial/industrial areas of Torreon–interesting approach isn’t it?)

Another, key point revealed was that due their presence in this particular industrial areas they were able to connect with fellow renters and area commercial/factory owners giving them their first subset of paying customers. (in the interim, I was getting an SMS update every 5 minutes as to the progress  or lack thereof made to get the Pilot kicked off – whose costs got to a colossal scale as my AT&T bill came through) 

The entrepreneurial team was one of his the first clients to sign up when this facility was announced and as such they benefited greatly with low-capped rents – no deposit (hence no capital tied up) for the next 3 years. Plus using a hybrid SAAS model, they could scale up without spending big $$ on hardware etc. The facility owner praised them for their work ethic, go-getter attitude and their willingness to improvise to manage fluid situations as the one evolving now with power & firewall issues. 

As luck would have it the pilot kept hitting hurdles and the entrepreneurial team was increasingly nervous and getting agitated, as I was slated to be there only for 2 days, and by end of day 1 they had nothing to show.

The conversation I had with the facility owner motivated me to extend my stay. This vote of confidence got the entrepreneurial team going and they got the Pilot off the ground by end of day 2, giving the team in Boston and me an opportunity to evaluate the offering.  We are in due diligence phase with them and are excited that pending any colossal failure during due diligence we will be adding them to our portfolio.

This brings into the discussion the $$ cost vs. benefit of this approach. This is a bit of a challenge to address as folks find the ‘costs’ (time, air-fare, hotel, meals, ground transportation) to be real and ‘benefits’ (intangibles to the most part) difficult to reconcile. But based on our experiences we do find some tangibles coming to us as ‘benefits’ of this approach.

Yes having one or other member of the BVG team (mostly yours truly) criss-crossing the oceans with a regular frequency does add up but the feet-on-the-ground approach shaves of a few percentage points from our due diligence costs.

As I close this post, I feel privileged to speak and interact with my audience – my readers. Your comments and feedback are vital and essential in my learning curve and a big factor motivating me to share my musings with the world using Technology.


5 Key Entrepreneur Attributes We Look At

As Angels/Seed Investors the mantra which comes to bear by lessons learned.  No matter how great the idea and the opportunity, at the end of the day it is only the execution that creates change and generates wealth, which explains why Angels/Seed investors bet on the jockey (people) more than the horse (idea).  At Blackstone Valley Group we see a fair number of pitches, and in course there are about ~ 5 attributes that help us discover the entrepreneur and the team with whom we can align and we believe have higher probability of delivering  & executing.


1) The Passion & Persistence.  Passion is always on the top list of qualities we look at entrepreneur teams but in our experience Persistence carries more value. Time again we have rejected pitches with constructive feedback to never hear from the entrepreneur team again.  One of the deals we are looking to fund is an example of both Passion and Persistence – where after three rejections (each round the entrepreneur team came back with the idea/plan more refined) the entrepreneurs persisted to get this looked upon again.

How they did it and Why we accepted it on the 4th try – will be an interesting blog post, but it did reflect on the qualities we want our management teams to have to execute on the milestones.


2) Open Ears and Open Minds.  This is a quality which almost the entire sub set of first time entrepreneurs feel that they inherently have but in essence we found that majority of the entrepreneurial teams unwilling to adjust/or abandon the original idea in lieu of pursuing the refined idea as they feel that they have invested lot of capital (emotional/cash/sweat) to adjust the rails now.

What we are looking at is the Open Ears and Open Minds approach – ability to hear honest feedback, go back to the drawing board and keep asking questions till they understand what works and what doesn’t.


3) In It to Win It!  We want the entrepreneurs who have jumped in with both feet and are actively seeking people who can help make turn their idea into a business, including potential customers, suppliers, employees, investors, friends and peers.  These teams usually have ‘skin in the game’ i.e. ‘Cash Capital invested in getting their idea past the POC stage and have the market validating the idea by paying clients and in due course we have found that that this group comes under the “most likely to succeed” with their idea.


4) Metrics and Milestones Tracking. I know this is somewhat subjective but in our experience entrepreneur teams who have their pulse on the metrics and milestones that they need to achieve to get the business off the run way and have been constantly tracking their own real progress vs. projections till the date they get in front of us – get our special attention. Why? It shows that the ‘implementation’ streak, understanding the cost and value of their time to be measured against set timelines to achieve them and are monitoring them without oversight. Wouldn’t you want these guys running the business?


5) Adaptable and Coachable.  Rarely does the first business plan remain unchanged, and so smart entrepreneurial teams take ownership of their plan and make it a living document.  They “roll with the punches,” and get back on their feet if they’re knocked down.  They also are willing to take the advice of more seasoned business people to help them be successful.  As Angels we tend to focus on startups in verticals in which we have significant knowledge and/or experience, and we appreciate it when our advice is heeded.


With everything said and done we are only human, and can sometimes let our own biases and emotions get in the way of making good decisions about a startup or an idea and I can probably write a short novel on the mistakes I make as an angel and will keep making (sorry can’t even say that I don’t repeat the mistakes – unfortunately I do) but I hold myself to the same attributes we look at the entrepreneurs coming to us.


We’ve all listened/read to countless startups touting their amazing, colossal idea as “the best thing since sliced bread!”  But as an investor and an advisor, I have to think quite a lot harder to make a list of great examples of good execution. How about you?


Looking forward to your feedback.



P.S to First Blog Post

This small note is an addition to my first blog post and is a result of my readers asking me to showcase some of the metrics being used by Investors to look at the BIM (Brazil, India, Mexico) markets.

BIM Risk Metrics


 Govt. Bond Ratings Local/Fx CurrencyRating

Adj. Default Spread in Basis Points Total Risk Premium

Country Risk Premium







$ 2.47 Trillion Dollars






$ 1.84 Trillion Dollars






$ 1.16 Trillion Dollars

Source : Moodys

Source : adamodar@stern.nyu.edu

Source:World Bank


This is just a snapshot and there is tons of data available related to Industry, Market Cap, Sector, Earnings, Cost of Capital, Equity Costs, PE, growth ratios  – where the comparison can be done based on the region, country. The best sources (and tad expensive but worth it) are CapIQ and Bloomberg.

I updated the Mexico GDP numbers to reflect the correct ones…apologies for not catching this earlier.

Please do keep the comments and questions coming and Thank You for the support!