Introducing my B.L.A.S.T Investment Strategy

Hi,

Steve Symington here again, back to give you a sneak peak of my investment strategy.

Yesterday I mentioned I’ve created a system we’ve affectionately dubbed the B.L.A.S.T. framework. Come to think of it, let’s get rid of the punctuation and call it BLAST – much easier to type.

Why so on the nose with the BLAST verbiage? Happenstance, really. One day team and I were discussing how to effectively distill my approach to investing into an easy-to-convey format. As I outlined what I look for in great businesses, BLAST practically leapt from the pages of our meeting notes.

So here we are, and I’m using the BLAST system to guide my decisions as we delve into the world of investable private firms with strong fundamentals and growth potential. Each letter in the BLAST acronym builds on the lessons I’ve learned in my own professional investing journey over the past 15 years:

B - Big Impact: I want to find companies working to make a significant positive difference in the world. They should be capable of fundamentally changing the way we do things for the better. That could mean helping an existing industry evolve, or it could mean creating an entirely new industry as its growth story plays out. But the businesses to which I’m most drawn are those whose vision should improve people's lives and society in a meaningful way.

L - Large Market: The company should target a sizable, growing customer base that can generate substantial revenue as it scales. The market opportunity should be measured in billions of dollars (not millions). Every total addressable market (TAM) has a ceiling – and the higher the better. But the underlying business chasing that market also needs a compelling, flexible product capable of seizing it – whether that means taking market share from competitors, building incremental revenues in an existing market, or carving out its own niche.

A - Adaptable Management: I’m looking for businesses with capable, adaptable leadership. The leadership team needs to have relevant experience, skills and the flexibility to adjust to changing industry dynamics. These leaders must not be too in “love” with their original idea and be willing to pivot the business when necessary (you’ll read several stories about the greatest pivots in startup history in later Bottom Line Investing articles). This ensures the company will be able to adapt and drive sustained, profitable growth.

S - Sustainable Growth: There should be a realistic plan to achieve profitability without compromising the company's vision and values. This might seem like a given, but (while there are some exceptions) too many startups wrongly assume they can rely on the Amazon-esque approach of maximizing enterprise value without the luxury of cash flows or profits to support their respective expansions. The finances and operations should lend themselves to lasting success. Without a clear path to eventual profitability – even if that might mean positioning itself as an attractive bolt-on acquisition candidate – there’s an outsized chance of the startup failing.

T - Transparent Operations: Along the same vein of adaptable management, I also want businesses I can trust to do right by everyone involved. I favor companies that are honest, ethical and accountable to stakeholders. They should value transparency with investors, regulators and the public. This transparency can manifest itself in many ways – whether through information disclosed in required regulatory filings, press releases, and interviews, or in the compensation structures adopted by executive teams (especially when they ensure management’s interests are aligned with those of stakeholders).

So there we have it. To be clear, I expect this to be a living document that I’ll update from time to time – both with extrapolations and examples that might help highlight how we apply each point to our analysis. But even in its current archaic form, this BLAST framework allows me to evaluate private investment opportunities holistically, identifying firms poised for responsible growth and positive impact. I hope these criteria help guide your own investing philosophy as well.

Now that you have an idea of how I pick startups, I’m going to share with you tomorrow where to go find these deals.

Let me know if you have any other questions and be sure to subscribe!

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Steve