Korea 🇰🇷 Finding value in stability

#63 Angelinvesting.it - From idea to Series A - Weekly Newsletter

Dear reader,

This newsletter reaches you directly while I am on my return flight from South Korea. In the 90s, my family invested in an auto parts company with headquarters in Seoul that has grown considerably year after year.

This investment and a tweet from a well-known person on Twitter under the pseudonym of PrivateEquityGuy, triggered some considerations that I would like to share with you.

First of all, the tweet.

The more I talk to boring business owners in their 50s. 60s 70s…

The more I found this ONE thing to be true…

This almost 99% of the time:

Very rare if they don't have 3-4 houses, apartments or vacation properties across the country. Not for rent, but only for themselves and their lovely families.

And I'm not talking about zillionaires... I'm talking about very simple folks who have been running the same "boring" niche business for the last 20-25 years.

Sometimes even longer.

Be it retail stores, Recycling, Agriculture, Wholesales, Construction, Manufacturing.

Their businesses are profitable, earning anywhere from $500,000 to $3 million a year. Net profit. Varies a little by industry, a little by year. One for sure, 14 out of 15 never had an unprofitable year. Regardless of the economic situation. And this is based on my little statistics – talked to more than 600 of them; met 75 of them.

This has made me realize: why gamble when you can win for sure? Why come up with something new when there are many things that already work (only to be improved. Often not even that.).

The world is full of flashy-flashy, while old money is very quiet.

They want “peace and quiet”, as they say. They are tired of traveling because they have circled the globe three times. They just want to go hunting and fishing. And play golf or tennis. Or just read and spend time with the children and grandchildren.

That's all fine and dandy, but what does that have to do with you?

Again, they have enough. Their kids have enough. (Plus, kids are not interested in running their dad's niche manufacturing business. They're often too comfortable for that. They're not hungry.)

This is a reminder to go and find these people, meet them and talk to them, be kind, be creative, and see if they are willing to sell their business for you.

There is an intriguing dichotomy in the world of private capital investing.

As angel investors, we're naturally drawn to the allure of groundbreaking innovation, seeking out ventures that promise to disrupt the status quo at lightning speed, dreaming of astronomical returns.

This pursuit of innovation is thrilling but fraught with high risks and demands a unique set of skills and insights. It's a path not suited for everyone.

Yet, there's another side to this coin—a realm of opportunities in seemingly mundane projects. These ventures might not make headlines, but they offer steady, reliable growth and profitability. Here, innovation is present but in a more subtle form, manifesting through incremental improvements rather than revolutionary breakthroughs.

Maybe, the essence of investment wisdom lies not in the pursuit of the next big thing but in understanding the nuanced dynamics of supply and demand. It's about recognizing the invisible forces shaping market realities and acting on these insights with a foresight that outpaces the competition.

I invite you (and myself) to broaden our perspectives, to find value in stability, and to recognize the potential in the predictable and the 'boring.' In these spaces, we might just uncover the most sustainable and rewarding investment opportunities.

Have a great weekend,

Simone

—

Want to read more: click here

Want to invest with me: click here

Want to share a deck: click here