In last month’s episode of Ask the Expert, we sat down with Nori Poblador for an insightful discussion on adapting in an ever-evolving business ecosystem, knowing when to jump ship, and why timing is everything. Poblador is the Managing Partner at Navegar, a Philippine-based private equity firm which has provided pivotal growth capital for companies like Great Deals E-Commerce, TaskUs, The Bistro Group, and Bo’s Coffee.
Here are five key takeaways from our discussion with Nori Poblador.
1. Timing is everything.
Happen-stance and rapid success are rarely ever borne of luck. Oftentimes, they’re the results of decades of groundwork and patient planning. While Poblador co-founded Navegar with longtime-friend Javi Infante in 2012, the firm’s true beginnings date back to as early as 2000. It would be a string of serendipitous occurrences that would lead them to discover their shared interest in raising independent capital for the Philippines’ growth-stage ecosystem. Over a decade later—just as investor interest ramped up around Aquino-era promises to clean up corruption—a chance referral got the two reconnected, paving the way for the birth of Navegar.
“So everything sort of fell into place,” Poblador said. “The stock market was going gangbusters. So it was an easy story to sell at the time. And I think if we had tried at any time before that it would have been difficult to get to the amount of capital we raised at the time.”
2. You either sink or swim.
In other words: you’ve got to adapt to stay afloat. Poblador espouses a degree of malleability when it comes to his investment practices. “When we started the fund, it was really meant to be a growth fund that provided capital to growing businesses that had some sort of track record; that had been around for a while,” Poblador said. “But we’re investing in the Philippine market which is not as developed a market as other parts of Asia. So I think we’ve had to be flexible.
“Although we’re primarily a growth capital fund, we’ve also had to make investments in later-stage companies and buy out shareholders instead of just adding fresh capital,” he said. “But we’ve also played the other side—investing in earlier stage companies. It’s amazing to see how vibrant that segment has become.”
“We figure that sometimes just adding growth capital won’t get the deal done. I think there is always the element of founders having committed to the business, having committed all of their resources to the business for such a long time that a monetization for some of the years of effort and sacrifice is welcome. So many of our investments have actually been a combination of primary and secondary capital. So we said okay, we’ve got to be flexible.”
3. Know your role as an investor…
According to Poblador, Navegar runs a tight ship with a crew of only fifteen people. So while the team strives to bring their expertise in financial and operational excellence to augment each of their investments’ ventures, it ultimately falls on the entrepreneurs to champion their own growth.
“The primary thing we look for obviously is the capability of the management team or founders that are running the business,” Poblador said. “So it’s got to have a business plan we can understand. We know which levers to pull, but it’s also got to have people running it, that we can support.”
When asked what the single most important factor in choosing a potential investee would be, Poblador emphasized team quality. “There’s nothing that can be done without [the founders and the management team],” he said. “And you count on them for many things—it’s not just their expertise, it’s also their commitment, it’s also their energy, it’s also their willingness to listen.”
4. … And know when to abandon ship.
“We’ve had successes and we’ve had blunders,” Poblador said. “I think every single opportunity that comes across your desk, every single due diligence that you do, every single investment that you make, every exit that you make, always teaches you a little bit of something, right? And it keeps adding to the knowledge base.”
But despite the valuable lessons one might learn from such engagements, Poblador stresses the importance of knowing when to walk away.
“We’ve gone down many paths of trying to invest in a company and going deep into due diligence even though there may have been warning signs already at certain stages of the process,” Poblador said. “We ended up not making those investments, but due diligence costs a lot of money. If you go down that path, you’re basically paying the the same as making a full investment. So I think that’s one of the skills you develop as the business matures, right? Hopefully you’re able to say sooner ‘Hey, you know what, let’s abandon ship. This isn’t going well.’”
5. The learning mindset is a muscle you need to continuously train.
Poblador’s advice for startups in the seed and pre-series A stages is pretty straightforward: If they want to prime themselves for growth partners like Navegar, they need to see every partnership with an investor as an avenue for learning.
“I think the more used you are to having outsiders help you, it’s sort of like a muscle that gets trained,” Poblador said. “So the more you’re willing to listen to others, you get used to it. And then by the time an institution comes in, hopefully you’re not scared of accepting advice or listening, or having someone else have a view on how your business should go.”
And the training metaphor is apt, because Poblador likes to view an investor’s role as similar to that of a physical trainer. “It’s almost like we’re a physical trainer that comes in at some point to help the companies and the management teams get better,” he said. “And the wish really is at the end of the period that you’re invested, you leave them better off than when you joined them.”
Listen to our third episode of Ask The Expert, with one of Indonesia’s most influential early-stage investors, Pandu Sjahrir.