Dangers of vulture capitalism

Capitalism remains as one of the main forces that drive society forward. Investing in venture capitalism has become a staple way for individuals and consortiums to profit from the acquisition and investment of companies. However, capitalism is filled with loopholes, which makes it vulnerable to exploitation and abuse. Finance advisor Scott Tominaga claims that one of the most notoriously abusive practices in venture capitalism has made individuals spectacularly rich while leaving tens of thousands of lives in ruins. This practice is called vulture capitalism.

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As the name suggests, vulture capitalism takes advantage of dying companies. Investors do everything in their power to make the company’s market value go up, dismantle the company, and sell the rest to offshore buyers.

One prime example of vulture capitalism lies within the story of Delphi, a diesel fuel supplier with over 50 plants originally in the US. During its slump several years ago, a group of investors came in to bail the company out. But it turns out, they were only there to turn a profit. First, they laid off tens of thousands of employees and outsourced the jobs elsewhere where they didn’t have to pay for pension and insurance. This move raised the market value of the company, but only for a short while. Still, it was enough to secure buyers from other countries.

Before selling the company outright, they then fired all middle management to prevent other disputes. Out of the 50 plus original factories, only a handful remain. The venture capitalists also used the company’s bankrupt state to avail of government bailout money.

According to Scott Tominaga, several developed nations ban vulture capitalism. While it can enrich a few, it could leave tens of thousands of people jobless, their pensions cut, and their future devastated. PartnersAdmin LLC’s Chief Operating Officer Scott Tominaga has almost two decades of experience in the hedge fund and financial services industry. He has an extensive understanding of the middle and back-office, accounting, compliance, and administrative functions within financial services firms. For more insightful reads on finance, visit this blog.

How to pitch investment proposals like an expert

With his years of experience in a number of industries, Scott Tominaga has amassed a wealth of knowledge which he shares with readers through his series of blogs. His topics are as varied as they are helpful, and are aimed to help people make well-informed decisions when it comes to matters of investment, business, and everything in between.

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In today’s blog, Scott focuses on the all-important investment pitch. 

Before anything though, people need to know that the chance of having a pitch rejected is pretty high and that is a normal thing. However, there are ways to increase the chances of, at the very least, getting potential investors interested.

Tip 1: Be thorough, but do not be boring.

Experienced professionals will be the first to say that while delivering a pitch, never assume that potential investors know what the proposed product or service is all about. So, be thorough and cover everything. Having said that, do not bore the audience with a barrage of details. Be concise and straight to the point. Also, engage the audience. Yes, explain the idea but also talk to potential investors like they are part of the presentation.

Tip 2: Be mindful of being respectful.

Scott Tominaga explains that while being respectful and courteous is a given, some people who go through it appear arrogant without intending to be so. Whether it’s the nerves getting to them, or the fact they believe in their idea so much, or other reasons, Scott reminds everyone to keep themselves in check. Potential investors are seldom enamored by presenters who are full of themselves. Be humble.

Scott Tominaga has played primary roles in the establishment of several operational infrastructures, successfully interfacing with fund managers and professional service providers to establish efficient and transparent operations and reporting structures. For related reads, click here.

Alternative and traditional investments: The real score

While Scott Tominaga of PartnersAdmin has discussed alternative and traditional investments several times before, he believes it is always a good idea for people to revisit the basics and refresh themselves on the subject matter. A review is still useful, especially for people who plan to invest soon.

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So, without further ado, here are some of the comparisons made between alternative and traditional investments.

Traditional: Traditional investments include bonds, stocks, and cash. They are known to be steadier, low-risk, and less-volatile compared to alternative investments. Traditional investments also take a longer time to yield profits. They require much lower investment capital and are also very liquid, which means investors can take them out whenever needed. The downside, though, is that traditional investments also go down when the market goes down, even to sometimes being negative.

Alternative: Hedge funds, managed futures, private enterprises, and real estate are some examples of alternative investments. Many people are discouraged by alternative investments because of the high capital requirements and the longer time it takes to liquidate these investments. However, alternative investments are much more profitable than traditional investments, especially during ideal conditions. But even when the market is down, alternative investments are affected a lot less than traditional investments.

Which type of investment are you inclined to invest in? Traditional or alternative investments? Feel free to share your thoughts with Scott Tominaga in the comments section below.

Scott Tominaga is the Chief Operating Officer of PartnersAdmin LLC, a company established to provide a quality, outsourced solution to meet the dynamic back-office needs of the alternative funds industry. Check out this blog for more articles on business and finance.

What are angel investors?

Entrepreneurs are often looking for investors to fund their business. And at the same time, investors are keen on spotting the next big business that they can invest in. Investors can pour in millions of dollars to finance businesses that they deem would be successful, given their overall marketing plan and the feasibility of the endeavor. According to Scott Tominaga, there are many types of investors looking for businesses to support. There are venture capitalists, peer-to-peer investors, personal investors, as well as banks. One other type of investor is the angel investor.

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Often, angel investors are high net worth individuals who are looking for a startup or entrepreneurs to support. Like most investors, an angel investor may choose to give a one-time investment package or choose to inject funds to a business regularly provided their terms are kept.

Unlike venture capitalists who use pooled resources, angel investors rarely shell out 7-digit figures. They would, on average, invest $300,000 in a startup with an ROI of 20 to 25%. The terms they put out are often reasonable as their main goal is to promote innovation that translates to economic growth in the long haul.

To become an angel investor, one must first comply with the Securities and Exchange Commission’s terms such as having a net worth of $1 million in assets or having earned $200,000 in income over the past two years, or those with a combined income of $300,000 for married couples. According to Scott Tominaga, one doesn’t have to be an accredited investor to become an angel investor.

Scott Tominaga earned his B.S. degree in Business Finance from Arizona State University in 1988. An experienced professional in the hedge fund and financial services industry, his skills involve expertise in middle and back-office, accounting, compliance, and administrative functions within financial services firms. For more reads on finance and investment, visit this blog.

Making the case for venture capital funds

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As a key figure in PartnersAdmin, Scott Tominaga has extensive experience in the realm of alternative investments. Fortunately, for the many potential investors out there, Scott has shared a lot of his know-how in his series of blogs.

In today’s blog, Scott Tominaga reviews the many reasons why venture capital (VC) funds are well worth the risk.

For starters, VC, like other alternative investments, have an inherent potential for massive long-term growth. If investors do their research and read the signs of the times and future trends right, their funding of startups and young companies could yield huge rewards in the years to come. So, even if VC is quite risky, it has become one of the most attractive alternative investments today when weighed against its potentially high returns.

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Scott Tominaga cites some of the biggest tech and online companies today such as Facebook, Google, and Twitter as the perfect examples of VC done right. What once were small, one-room businesses have skyrocketed to the top of the global tech empire, taking along their VC investors for the ride.

Apart from the funding, Scott Tominaga also mentions that VC investors can also be involved with other matters in the companies they choose to invest in. For example, a number of VC investors have been known to take part in the decision-making processes as well as other operations within these businesses.

Scott Tominaga is the Chief Operating Officer of PartnersAdmin LLC, a company established to provide a quality, outsourced solution to meet the dynamic back office needs of the alternative funds industry. For more investment- and fund-related reads, visit this page .

Industries to put your money this 2019

A strong growth prospect should be prime consideration for future investments in specific industries. You’re looking for industries with opportunities to expand into new markets and consistent upward sales trends. They deliver products or services that people already use or want to get their hands on, advises finance professional Scott Tominaga of PartnersAdmin LLC. Hereunder are some industries that show great potential, even as we enter the 2020s.

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Artificial intelligence

AI research has been booming in the past few years, and the effect of AI in our society has never been more palpable as it is now. Companies like Google, IBM, and Uber are now taking advantage of the massive QoL changes AI is bringing, from developing complex games and autonomous vehicles to introducing apps and gadgets to the modern hospital.

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Financial services

Business development companies boasting direct equity investments, whether small- or medium-sized, comprise another promising industry. Even as the Federal Reserve seeks to raise interest rates, financial services are a great investment choice as such a move by the government simply means the industry is generating profit.

Healthcare

Already among the best-performing sectors in 2018, healthcare should continue to grow as an investment option in the coming years. This industry is one of the most solid investment options out there, even as advancements in Big Data, Machine Learning, and the Internet of Medical Things (IoMT) are being deployed.

Telecommunications

Investors in telecommunications should avoid stocks with high price-earnings ratios and instead look at firms with lower debt, advises Scott Tominaga. A shake-up in the industry has relegated tech giants like Netflix and Facebook to the revamped sector, so it’s recommended that investors look to more traditional and conservatively managed telecommunication companies instead.

PartnersAdmin LLC’s Chief Operating Officer Scott Tominaga has nearly two decades of experience in the hedge fund and financial services industry. He is an expert in middle and back office, accounting, compliance, and administrative work. Visit this blog for related posts.

Strategies for ensuring optimal asset allocation for your investment portfolio

Most investors are driven to engage in asset diversification based on financial goals, investment timeframe, and the willingness to take risks. But as a rule, never put all your eggs in one basket. Asset allocation is all about abiding by this saying, says financial services consultant Scott Tominaga of PartnerAdmin LLC.

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As far as approaching asset allocation itself is concerned, you could either go for a fixed or strategic method or a tactical one. The former involves investing proportionately in different asset classes, with the returns computed based on average returns across those investment types. Tactical asset allocation is geared more toward capitalizing on short-term opportunities, with assets shifting to more favorable classes based on market timings. As soon as one short-term profit is realized, the investment process resets to its original allocation.

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Note that each asset class comes with its set of associated risks and returns, and often behaves differently over time. Financial experts will insist that such will depend on how an investor allocates his or her investments. But do know that choosing individual funds or securities often comes second in priority to the main types of asset categories (namely cash, bonds, and stocks).

All in all, keep in mind that asset allocation is also dictated by the investor’s age, adds Scott Tominaga. Younger investors between 21 and 30 years of age are more advised to invest heavily in equities and counteract this with some debt investments. Those in between 31 and 45 need more allocations on securities and more balanced debt-equity investments. Finally, those nearing retirement age should focus more on debt investment and less on equity.

PartnersAdmin LLC Chief Operating Officer Scott Tominaga has been in the business for over 17 years and has become proficient in the areas of middle and back office, accounting, compliance, and administrative functions within financial services firms. Visit this blog to read related posts.