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Adam Capital Management

Autor:   •  September 8, 2011  •  Essay  •  1,177 Words (5 Pages)  •  1,741 Views

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1. Adams espouses a "market first" analysis of opportunity by looking for discontinuities. Is this substantive or window-dressing? Do the four types of discontinuities represent applicable guidelines? Are they comprehensive, or are there other discontinuity templates that a venture investor would find useful?

Market first is a strategy in which the entire firm agreed upon the markets of interest before considering individual companies. The firm would invest more on the basis of business fundamentals or market analysis. Adams Capital Management (ACM) approach of looking for discontinuities is substantive. Discontinuity in this context is where an established market facing structural changes unable to respond accordingly. Exploiting discontinuity can create new entry opportunities. Since all ACM's general partners have engineering background, they target their investment in information technology, networking infrastructure, and semiconductor industries. Thus, they are able to utilize their knowledge and expertise in identifying and taking advantage of discontinuities in these industries. ACM's partners identified four types of discontinuities within the industries. They are standards; where existing manufacturers' attempt to preserve their captive customer base by maintaining their proprietary technologies, regulations; where unexpected changes in regulations force markets to adapt to a new market reality, technology; has two types which are whiz-bang package that take some times for close competitors to duplicate and another one is convergence of technologies through innovation to allow separate competitors to interact. These four categories are applicable guidelines that help ACM achieve consensus about and control over where its partners would invest. Besides, they allow compelling market opportunities to be exploited through innovation. Moreover, they are comprehensive since they involve structural changes in established markets, which correspond the discontinuity concept. However, ACM focus its investment only on established markets approaching a billion dollar in size and emerging companies that are positioned.

2. Analyze Structured Navigation. Is this a valid measurement of progress in early stage investing? Could such a program ever be a hindrance to company development?

Structured Navigation is developed to manage ACM investments. It was established by the assumption that early stage companies shared the same benchmarks should apply the same elements to succeed. There are several processes of structured navigation namely round out the management team, obtain a corporate partner or endorsement, gain early exposure to industry and investment banking analysts, expand the product line, and implement best practices. Round out the management team involves helping its entrepreneurs complete their management teams. Obtain a corporate partner or endorsement is where ACM forges


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