In this Family Office Club fireside chat, Kevin McGovern discusses how he evaluates opportunities, builds partnerships and scales businesses across markets. He shares advice on deal diligence, licensing, cash, relationships and investing for impact.
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About the guest
Kevin McGovern. Kevin McGovern is Chairman and CEO of McGovern Capital, described in the transcript as a single family office and an investment strategy, licensing principal and adviser to global businesses. Through McGovern Capital and its affiliates, he has co-founded over 25 companies, including six world category leaders, and has been principal in over 15 global joint ventures doing business in more than 80 countries.
Key takeaways
- Look for trends that are still forming. McGovern says to identify where a market is heading and allow time to build a position before the trend is widely recognized.
- Learn to say no and use trusted experts as resources. He describes professors as useful factfinders and information sources.
- Cut losing investments early and keep backing winners. McGovern says he has continued investing in a company he believes can replace plastics.
- Protect your reputation by vetting deals and sharing their weaknesses. He says trust grows when partners know he will disclose what he knows and avoid wasting their time.
- Take time with due diligence. McGovern recommends checking deals with people who understand the category, listening to their input and iterating before forming a view.
- Build personal relationships by remembering details about people's families and interests. He keeps notes and reviews them before meeting people in other countries.
- Know the company's numbers and meet the finance team. McGovern says investors should speak with the CFO and individual team members, not only the CEO.
- Use licensing and joint ventures to generate capital without giving up equity. He recommends separating product applications and distribution areas to find opportunities.
- Define the territory and field of each license. He warns that granting non-exclusive rights can limit the ability to offer a global company broader rights later.
- Keep enough cash to support growth, and periodically consolidate after rapid expansion. McGovern compares cash to fuel and says companies need to adjust their plans as they reach plateaus.
- Pair commercial goals with a purpose. McGovern says his family office aims for "success to significance" by seeking to affect people as well as the balance sheet.
Best quotes
"We have a expression in McGovern Capital called catch the current, make the wave. If the wave is existing already, it's too late."
"Learn how to say no too, Richard. I mean, you know, often what I'll do is is instead of just saying absolutely no, I'll try to refer people to people that may understand it more."
"Your reputation is everything. So fortunately we built a reputation. We vet our deals and there's not a chance that I'll bring it bring a deal to somebody in Singapore"
"We're slower than most. I remember the old dotcom area make a decision today. Sorry, we're not making a decision today."
"When you meet people, don't worry about their business. Worry about their person. Find out a little bit about how many children they have. Find out about what they really love."
"So everything we do, we try to impact mankind as well as our balance sheet."
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