Suberna Shringla - Venture Adventures

KTY: We are privileged and thrilled to present Suberna Shringla, idea backer and advisor extraordinaire.

Welcome Suberna,

You have a long line of success stories having mastered both financial and business advisory positions at Turner Broadcasting Services International Asia Pacific/Time Warner, Walt Disney Studios, Team Ventures, Worldbizwatch and most recently with Hurray, an exciting new Chinese a leader in advanced wireless value-added services, digital music production and distribution, and mobile telecommunication network software in the People’s Republic of China.

You certainly have been exposed to a wide array of ventures and adventures in your career spanning across Asia, North America and Europe. You must feel like “Indiana Jones“, traveling the world to uncover and protect the next jewel.

Having been involved in many interesting deals over the years, what kind of “diamond in the rough” company would make you salivate if it showed up at your door?

Suberna: I like the analogy “Indiana Jones” though unlike the character I’m more often the loser or the villain but ever once in a while I do get the prize recently I even got the girl…(but that’s another story).  The pursuit and achievement of the reward makes the seven league ambulations worth the effort.

First, let me summarize what I do with Team Ventures (“TV”), the company I founded in 2003.  We started off as a pure corporate finance advisory firm focusing on media and related technologies.  The model further distilled itself into Private Equity and today TV counts its main strengths as an advisor and packager of optimal financial solutions for industry with a core interest in media and related technologies.

Second, indulge me in confessing that as a typical “sale side” advisor one has a tendency to believe all the companies that are paying your fees are a “diamond in the rough”.  This is a conflict of interest.  Hence this is one main reason why TV has morphed into putting its money where its mouth is and becoming both a principal as well as an advisor.  In that I mean that if we genuinely like a company its all its facets we are willing to put in elbow grease and capital, package it to the extent required and then syndicate the remainder of the funds required to sources we are close with and who trust our credentials.

And now to the point! A company I thought was very interesting was and remains Redgate Media.  Redgate is a company founded by Peter Brack with his partners, Robby Yung and Julia Chu.  Peter was a colleague of mine at Time Warner where he was CEO of Time Inc. Asia Pacific.  Redgate was a startup that identified that the Chinese media market was very fragmented and lacked management depth.  He set about raising finance to create a media fund but transformed the business model into becoming an operator of media assets starting with publishing and radio.

Within a matter of 18 months he went from a start-up to a listed company on the Hong Kong main board, and that was only his publishing division called OMG which owns a majority of Ming Pao magazine, a sort of Vogue and People’s magazine rolled into one for the Southern Chinese market (80million people).  My point simply underscores Jack Welch’s adage which is to back a mediocre company with A grade management rather than an A grade company with B grade management – I assume he meant business model rather than the intrinsic company itself.

On a personal front I was able to get into Gazprom local shares when they were less than a US dollar and today within three years Gazprom is worth >x10 and is also the second largest Gas and Petroleum company globally.  My ex-boss and mentor Stuart Mowbray led me in kicking and screaming and I’m still kicking and screaming I did not put more!

Another great example where the jury is still out but proven is Asia Broadcast Satellite.  Two years ago my friend and client Tom Choi and his partner Gregg Daffner identified a satellite in orbit that was unused for various reasons I am unable to divulge here but it amounted to a distressed asset by default.  We put together a business plan, a financing package consisting of Private Equity convertible bonds and Mezzanine debt from Citibank Venture Capital International and Asia Debt Managers, pre-sold transponder lease capacity and concluded the transaction.  We got the timing right as at the time we started the transaction the sector was in a state of glut and today we can’t sell the bandwidth fast enough.  The satellite owned by Lockheed Martin and Intersputnik (the erstwhile Soviet block space agency) was only 3 years in orbit with an additional 16 years of life left.  We bought the bird for 20% of replacement value, less than half the book value and below the insured value!  In our estimates the venture projects 37% IRR year on year on cash flow without an exit factored in.

KTY: Would you be willing to share a ball park figure on how much that type of company would be worth to you (as an investment)?

Suberna: If the metrics are healthy the amount is not an issue as there is tremendous liquidity in the market but not enough good deals.  In plain English, any amount for a safe good return.  Money can be available – beg or borrow.

KTY: What would make your job easier to discover those jewels (“diamond in the rough” companies that many do not know about, but maybe should know!)?

Suberna: I’m good at what I do, network, glean insights and information and seize the opportunities.  Perhaps more help from others like me and definitely more help from solid execution people would help greatly.  Good people are harder to find than deals which is really a circular statement since it’s all about people in the first place.

KTY: What was your proudest moment as a financier or advisor?

Suberna: Closing the ABS Satellite transaction.  What a tremendous sense of achievement owing to all its myriad issues.

KTY: OK then, so what was your biggest nightmare along the way?

Suberna: When I started off as an analyst in Disney, I had scant knowledge of spreadsheets.  In the first few days I had to support my boss in a management presentation and had to work all night on getting the formulae right.  Last minute something went wrong and all that the screen would only show was machine language meaning error!  I finally got it right in the penultimate minute and practically waltzed into the board room only to find out the cheese did not want to discuss the minutiae!

KTY: What would you say are some of the upcoming trends in making deals with promising new companies?

Suberna: Good companies i.e. good management know where they stand and are very savvy in deal making.  Thanks to the dot-com era deal making, associated jargon and the rest of the paraphernalia have become a fairly common knowledge such that a good deal has become more complex.  Value is being extracted from multiple layers.  One of the continuing trends for a promising new company is to gain strategic capital.  Not just financial support but soft capital such as know-how, brand, goodwill, footprint, scale and so on that makes a strategic partner’s involvement so much more interesting to promising and ambitious companies that see the woods for the trees.

In the pure financial sense in recent times hedge funds have put the cat amongst the pigeons for private equity owing to their much faster turn-around or decision time and mezzanine characteristics which essentially means that such funds provide a subordinate class debt with a high coupon plus an equity sweetner.  Hence the management can keep more equity, if the company’s cash-flow can support it, a high coupon is acceptable for an interim period until such debt can be re-financed.

Corporate governance is another strong differentiation between a good private equity firm and public markets where the incentives are totally different.  Private equity has skin in the game while a non-executive board member may only wish to ensure the company maintains a compliant management.

KTY: As a proven smart leader who has successfully helped grow quite a few ideas into thriving businesses, what do you think are the secret ingredients that propel companies towards success? What are the most critical elements you seek when you look at a new company?

Suberna: People.  End of the day you’re entrusting them with your money and you’ve got to look them in the eye and feel secure.  It’s most often too late once things start going wrong and wrong they often go owing to people in charge.  Everything follows thereafter.

KTY: In your mind, who are the “best in class” small companies on the rise– that is, the “diamonds in the rough” so to speak, who have impressed you with their ingenuity and smart thinking?  And, what do these “diamonds in the rough” do to come out shining?

Suberna: The companies I mentioned earlier are the ones that come to mind amongst several I have had the opportunity to get to know well.  A  company in the media and wireless technology space where I serve as an independent board member is another company that I think is doing everything possible to chart a safe course in a turbulent ocean of unpredictable regulations and unprecedented business sector.

I think the renewable energy sector as a whole will do rather well in the coming years owing to the sheer pressure on the earth’s resources, tipping point demographics and the advent of India and China in the speed that they are urbanizing.  Remember these constitute over half of global population that has been unaccounted for in economic terms.
 

KTY: In the spirit of the classic film, “The Good, The Bad and The Ugly”, we could say that we’ve talked about the GOOD above. How can companies on the rise avoid becoming the Bad and the Ugly?

Suberna: One of my favorite films! Like the film (and life), each element seems to have a hint of the other but to your question about companies, I think having good corporate governance, a good board, a good advisory board is a start at the top of the totem pole.  This should lead to good systems and structure.  End of the day a company is an entity and people are repositories of the company’s faculties.  If the company has been nurtured, shaped and led correctly it should be able to function well despite sporadic imbalances in management.  Such is the legacy of all the great companies we know of today that weather economic, business and management cycles.

A Rambo does not an army make and so true for a company too.  Companies are like armies constantly in action.  The ones with the best preparation, organization and execution win.  Even the best armies can fail if they’re fighting a lost cause owing to a fault in the chain of command.

KTY: Would you care to share some of your favorite and best advice to companies seeking growth, fame and fortune?

Suberna: Only to reiterate that companies are like entities, they are different at conception, have different requirements at growth and at maturity.  Hence an entrepreneur or family may not be the best talent for the company in all its stages of development.  People are always key and the fit is always important all things being equal.

KTY: Thank you, Suberna, for sharing your adventures and wise wisdom. It is always so great to chat with you.