Scott Tominaga on the Growth-Venture Capital Debate

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 Scott Tominaga Weighs in on Growth Vs Venture Capital

 Growth or venture capital? In this blog post, Scott Tominaga examines these two investment approaches and shares his insights to help investors craft their investment strategies.

 

What is Venture Capital?

 

Venture capital, or VC, is a branch of private equity that focuses on investing in startups and other early-stage companies with tremendous potential for growth. Though often associated with Silicon Valley and the technology sector, many Venture Capital firms are willing to invest in young companies from any industry.

 

In contrast to traditional private equity funds, which tend to invest in a handful of established companies in mature industries, venture capital funds often invest in dozens of small firms. Though many, if not most, of the firms are expected to fail, the VC firm hopes that the outsized returns of the few successful companies will more than cover the failures.

 

What is Growth Capital?

 

Like Venture Capital, Growth Capital (also known as Growth Equity) is another subset of private equity. However, in contrast to VC, Growth Capital is an investment strategy wherein funding is given to older, more mature companies.

 

This has several goals, such as expanding capital, restructuring operations, and funding newly acquired companies. While VC aims to help new companies get off the ground, Growth Capital seeks to help established companies transform or modify their business model.

 

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The Verdict

 

Ultimately, Scott Tominaga believes both strategies should be seen as complements. In addition, he points out that the success of each strategy could depend on the current point in the business cycle, which means that investing in both approaches could offer an investor's portfolio some needed diversification.

 

In the end, Tominaga notes that regardless of the strategy employed, the most important factor may be the quality of the investment firms themselves. Though the highest-performing funds easily beat the overall market's returns on a risk-adjusted basis, most cannot equal such feats, making the choice of fund manager all the more important.

 

 

Scott Tominaga is PartnersAdmin LLC's Chief Operating Officer and has nearly 20 years of experience in the hedge fund and financial services industry. Visit this page for more on Scott and his work.

Finance Corner: Scott Tominaga on the Two Types of Accounting

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Learning About the Two Accounting Types with Scott Tominaga

Small business owners often take for granted the type of accounting system they use. In fact, they may be completely unaware of whether they employ cash basis or accrual basis accounting, instead leaving that choice to their accountant. Nevertheless, finance expert Scott Tominaga indicates that all small business owners should familiarize themselves with both accounting methods, including the benefits of each.

 

For cash basis accounting, the transactions are reported when money is either spent or received. For example, you record an expense when cash is paid for a new piece of equipment or when a customer pays you for services rendered.

 

In contrast, with accrual basis accounting, income is recorded when earned, and deductions are recorded when they are incurred. For instance, if a piece of equipment is purchased by a company and is expected to last five years, its cost is spread across its lifetime. The result is that the company's earnings are smoothed, and its books more accurately reflect the company's true financial health.

 

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Scott Tominaga mentions the company owner's choice depends on several factors. For this, finance experts and tax accountants should be consulted. Cash basis accounting is usually more intuitive and easier to understand for someone not well-versed in accounting. In contrast, the accrual method is more complicated but preferred by most companies. In addition, some business types, such as C Corporations, can no longer use cash basis accounting in the United States for tax purposes.

 

Based on the information above, which type of accounting do you believe best suits your business? Share your thoughts with Scott Tominaga in the comments section below.

 

 

ScottTominaga, the Chief Operating Officer of PartnersAdmin LLC, is an experienced professional in the areas of middle and back office, accounting, compliance, and administrative functions within financial services firms. He has previously filled primary roles in forming several operational infrastructures. He also interfaced with fund managers and professional service providers to establish efficient and transparent operations and reporting structures. For more about his work, visit this page.

What Makes Equity Markets Different From Debt Markets?

 

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    Scott Tominaga notes that one of the most important functions of a company is raising capital. As he points out, there are, broadly speaking, two main ways a company can finance its operations: taking on debt or issuing equity. While debt entails borrowing a fixed amount with an agreement to repay it with interest over time, issuing new equity entails selling an additional ownership stake to another person or entity.

 As Scott Tominaga further explains in this article, the equity and debt markets operate in two distinct ways.

The distinction

The stock market is the venue for buying and selling stocks and pertains to several well-known marketplaces such as Nasdaq, the London Stock Exchange, and the New York Stock Exchange, to name a few. Though stocks were originally bought and sold in person on a trading room floor, now almost all of these transactions occur via computers.

 

Meanwhile, Scott Tominaga explains that the debt or bond market is the arena for investing in fixed income assets. It is worth noting that there isn't a single physical exchange for bonds since most of these transactions are made by individual investors or between large institutions and brokers.

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Clearing up confusion

The distinction between debt and equity and their associated markets must be made at the onset, as most beginners in the industry often have to deal with the confusion of whether debt financing or equity financing is more suitable for their situation.

 

To sum it up, investors and traders in the debt market buy and sell bonds, while those in the equity market buy and sell shares of stock.

 

What are your thoughts on debt markets and equity markets? Do you prefer one over the other? Do you have any tips on navigating these markets? If so, do share them with Scott Tominaga in the comments section below.

 

Scott Tominaga is a seasoned professional in the financial services and hedge fund industry. He has written several blogs and articles on a broad range of topics. Click this link to read past articles from Scott Tominaga.

The Roles and Responsibilities of a Hedge Fund Analyst

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For a hedge fund to become successful, the pooled funds must be strategically used so that they will earn an active return. For that reason, Scott Tominaga states that hedge fund analysts have critical roles to play in ensuring that the investors get their money's worth. Listed below are some of the roles and responsibilities of a hedge fund analyst.
· They identify investments that are worth trading for. As such, they have to be able to perform quantitative research that would help them objectively identify the assets that would multiply their fund's wealth and those that adhere to the fund's trading strategy and mandate. In addition, hedge fund analysts must keep abreast of the latest economic trends, financial news, and market forecasts.

· Because a hedge fund's trading team or portfolio manager has to pore many options, a detailed presentation or recommendation must be presented to them. Hedge fund analysts need to develop detailed research that discusses a potential investment's current and future standing within the industry, the actual valuation of a company, and other pertinent information.

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· As Scott Tominaga notes, finance professionals or institutions must be diligent in monitoring their investments. The same is required for hedge fund analysts. While it is usually the portfolio manager who handles the investment itself, the analysts are in charge of continuously monitoring the performance and current position of the companies invested in and providing the portfolio manager with the recommended courses of action.

· The financial world is evolving at a very fast pace. As such, hedge fund analysts must develop the necessary skills to complement their investing prowess. These include people management to resolve interpersonal conflicts that may arise, risk management, and market and capital raising.

Scott Tominaga is the COO of PartnersAdmin LLC, having had nearly two decades of experience in the hedge fund and financial services industry. He has become proficient in various areas within financial services firms, such as middle and back office, accounting, compliance, and administrative function. Click here for more information.

How to Set Up Your Own Private Equity

 Private equity is a type of investment that involves the purchase of shares in a company -- shares that are not traded on a public stock exchange. Private equity investors provide capital to companies in exchange for an ownership stake in the business, explains Scott Tominaga, Chief Operating Officer of Partners Admin LLC and industry veteran and expert.

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Private equity firms typically invest in companies and businesses experiencing financial difficulties or undergoing a corporate restructuring. The goal of these private equity firms is to improve the financial performance of the companies they invest in and then sell their stakes at a profit.

Where to Start
As Scott Tominaga explains, there are several ways to set up a private equity fund. The most common method of creating a private equity fund is to create a limited partnership, which is an arrangement between a group of investors and a general partner who manages the fund.

Another way to set up a private equity fund is to create a limited liability company or LLC. This structure gives the fund managers more flexibility in how they operate it.

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In Search of Capital
Once you have decided on your private equity fund structure, you need to raise capital. The most common way to get the required money is to solicit investments from accredited investors, individuals, or institutions that meet certain criteria set by the Securities and Exchange Commission.

If you can attract accredited investors and invest in high-growth companies, Scott Tominaga notes that you can set up a successful private equity fund. However, it is important to remember that these types of investments are risky, and you could lose all your investments if the companies you invest in does not perform well.

Read more about private equity and other finance topics when you subscribe to this Scott Tominaga blog.

A Review Of The Best Alternative Funds Available

When it comes to alternative investments, the number of options can seem overwhelming. Scott Tominaga explains that not all investment options are created equal – some offer higher return potential, while others come with less risk.

Real Estate Investment Trusts (REITs)
REITs are a popular choice for investors looking for exposure to the real estate market without having to purchase property directly. These securities typically trade on major exchanges and offer high dividend yields.

Commodities
Investing in commodities can be a solid way to diversify your portfolio and hedge against inflation. Commodities such as oil, gold, and silver have historically performed well during periods of economic turmoil. Additionally, global demand often drives commodity prices, so investing in these assets can help you profit from rising economies worldwide.

Peer-to-Peer Lending
Peer-to-peer lending platforms offer investors the opportunity to loan money to individuals or businesses for interest payments. Peer-to-peer lending also tends to offer higher returns, making them an attractive option for risk-tolerant investors, explains Scott Tominaga.

Hedge Funds
Hedge funds are another popular alternative investment. These investment vehicles use a variety of strategies to generate returns, including short selling, derivatives trading, and long and short equity positions.

Private Equity
Private equity is another form of alternative investment that involves investing in early-stage or unlisted companies. These investments can be illiquid and high risk, but it’s also possible to yield significant returns.

Venture Capital
Venture capital is another type of private equity that focuses on investing in startups or other high-growth companies. While these investments are often riskier than traditional private equity, the returns are generally high.

Collectibles
Scott Tominaga explains that collectibles such as art, wine, and classic cars can be an excellent and meaningful way to invest in something you’re passionate about. While these assets are considered illiquid and difficult to value, the financial and emotional returns make them worth it to some individuals.

Scott Tominaga has years of experience in the hedge fund and financial services industry. Read more of his insights by visiting this website.

Venture Capital And Venture Builder Models: How Are They Different?

The venture capital model has helped many businesses raise funds to get their ideas off the ground. According to Scott Tominaga of Partners Admin, acquiring venture capital funding is becoming more difficult as time passes because of the emergence of numerous new companies and business ideas. In addition, venture capitalists typically require tangible results before committing to a project, which startups cannot always provide immediately.

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Given these circumstances, a new investment model has risen in recent times: venture builders. In contrast to venture capitalists, venture builders invest their own money into a company from the beginning. They also actively develop the business, typically by providing mentorship and access to resources. The model is becoming more popular as it does not require as much capital upfront, and there is more potential for returns later on.

There are several significant differences between the venture capital and venture builder models. Venture capital infuses money directly into a business through cash injection or other direct methods. Venture builder, meanwhile, uses indirect funding, such as providing money for salary, product development, and marketing expenses.

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Venture builders are also more hands-on when developing and running the business they put money into, notes Partners Admin financial expert Scott Tominaga. For instance, venture builders typically offer training and mentorship to help the company grow and access resources that cannot be found elsewhere. Venture capitalists allow the entrepreneurs they fund to build their businesses with more freedom. Because of these differences, venture builders usually require a more extensive risk profile and take more equity because the business's success is not yet as assured as that of the clients of venture capitalists.

While both venture capital and venture builder have distinct advantages and disadvantages, Scott Tominaga of Partners Admin explains it is ultimately up to the business owner which route they want to take.

Are you interested in learning about the financial industry? Follow this Scott Tominaga Twitter page for similar posts.

A few great examples of hedge fund investments

 According to Scott Tominaga of PartnersAdmin LLC, there are many different types of hedge funds, but some are more successful than others. Here are some of the best examples of hedge funds:

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1. Bridgewater Associates: This hedge fund is one of the largest globally, with over $160 billion in assets under management. Bridgewater Associates has a sterling track record, with an annualized return of over 16% since 1975.

2. Man Group: This hedge fund is one of the oldest and largest globally, with over $80 billion in assets under management. It has a long and storied record of success, with an annualized return of over 17% since its inception in 1783.

3. Och-Ziff Capital Management Group: This is one of the most significant hedge funds, with over $38 billion in assets under management. The group has a very successful track record, with an annualized return of over 45% since 1994.

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4. York Capital Management: This is another of the most successful hedge funds, with over $17 billion in assets under management. It has had an annualized return of over 24% since its inception in 1991.

5. D.E. Shaw & Co.: This hedge fund is one of the largest and most successful in the world, with over $40 billion in assets under management. It has had an annualized return of over 12% since its inception in 1988.

6. Lansdowne Partners: This hedge fund is the 4th largest and one of the most successful, with over $16 billion in assets under management. Scott Tominaga says Lansdowne Partners has a very successful track record, with an annualized return of over 30% since its inception in 1998.

Scott Tominaga has been Chief Operating Officer of PartnersAdmin LLC since 2008. Read more about hedge funds on this page.

Hedge Fund Investments and Cryptocurrency

Scott Tominaga, the founder of PartnersAdmin, is a trusted source of investment advice. He has fresh insights on the newest trends in the finance industry and shares his thoughts in his blogs. An exciting development in recent times is the emergence of cryptocurrency, especially as hedge funds have begun to invest more heavily in these assets.

Recently, several hedge fund executives have begun holding their assets in cryptocurrencies. Because of the popularity of crypto trading, this number is expected to increase in the near future.

 

According to Scott Tominaga’s observations, this trend has been an inevitable consequence of the significant increase in demand for digital currencies, which has led to a rise in crypto prices. As a result, a considerable amount of capital has been pumped into cryptocurrencies, and something this big will not escape the attention of hedge fund managers.

 

One reason for the growth in popularity of crypto is that digital currencies are not tied to any central bank or government, meaning that they are not subject to the same regulations or policies as fiat currency. This makes them an ideal tool for investors to protect their assets when it is still possible to access the markets in times of crisis.

 

We can expect more hedge fund executives to pursue cryptocurrencies because they provide an opportunity to make outsized profits quickly. In addition, hedge funds offer a higher potential return on investment, while cryptocurrencies also allow investors to some possible protection against other risks, such as political and economic instability.

 

It is not surprising, therefore, that cryptocurrencies are becoming more and more popular among hedge fund executives. This is a clear indication that the future of digital currencies is bright, and investors who do not take advantage of this trend could very well miss out on some significant profits.

 

 

Scott Tominaga, PartnersAdmin LLC Chief Operating Officer, is highly proficient in the areas of financial services and investments. For more about his work, visit this page.