This is the fourth in a series of five interviews with entrepreneurs who attended the third annual Global Summit of Leaders this week at Royal Roads University in Victoria. Carlos Miranda joined leading CEOs and business owners from eight countries, moderated by school alumnus Dean Lindal.
After working for Ernst & Young for 23 years, in corporate finance and management, and strategic consulting, Mr. Miranda founded BR Opportunities in 2010. The private equity fund looks to invest in emerging companies in Brazil, accelerate their growth, and transform them into market leaders.
Question: What inspired you to start your own business after so many years at a corporation?
Answer: I worked for Ernst & Young for 23 years, I became partner in 1998. As soon as I became partner, I started to push the other partners on the entrepreneurship thing. At that time, most of our clients were big clients at big organizations, some referred clients from the U.S. and from other countries. But I realized there were lots of very, very interesting small and medium-sized enterprises in my country that were booming and probably in the near future all the big firms would be struggling to get them as clients.
Because of this I pushed my partners to start an entrepreneurs program in Brazil, and we brought the Entrepreneur of the Year program to Brazil and we started a new strategy that was strategic growth markets. The idea was kind of a mirror company of Ernst & Young that just focused on these high-growth organizations, companies run by exceptional entrepreneurs. This went very well and after 15 years I helped a lot of very good entrepreneurs, and I created a very strong relationship with these now successful entrepreneurs.
Having helped so many entrepreneurs during those years, on their acquisition strategies, or negotiating with private equity, or helping them fund their businesses, or helping them to grow, I looked at myself and I said ‘I think I have some very good assets: a very good relationship with these successful entrepreneurs and their money, of course, very good deal flow, and some expertise to help these companies grow.
It was a natural decision to quit Ernst & Young and a stable position, good revenues, good salary, good distribution, and start my own business, a private equity firm. And the concept of my private equity firm is quite different from the rest because 100 per cent of the money we got came from successful entrepreneurs. This is what we call ‘smart money’ because, in any investment, what we want is not just to put in money, not just to swarm into the company, put in governance, and so on, but putting in those entrepreneurs’ experience as well.
Because of that I think the companies get huge benefit, and also our investment decision is very easy because those guys want to vest the entrepreneurs as they were, and they are not just biased to not doing a deal, to not making a mistake, they are biased to invest in entrepreneurship.
So that’s why I think we have created a very interesting ecosystem or environment of entrepreneurs and investing for entrepreneurs to entrepreneurs. And we are just in the middle of this, trying to put in some organization, management, governance and strategy.
Question: What types of companies are you looking to invest in, and what qualities are you looking for from them and from their management teams?
Answer: The first filter is exceptional entrepreneurs, and when I say exceptional, I say to all the entrepreneurs ‘this is very important for Brazil.’ Entrepreneurs that are 100 per cent inspired, entrepreneurs that are well educated, and the ones that know the benefits of having auditing in their firms or a board of directors, and have transparency in their businesses.
Second, as exceptional entrepreneurs, we are looking for guys or girls that have 100 per cent skin in the game, that somehow have transformed their business environment. And the next filter is that we are looking for companies that have already proven their business model, and they are growing fast, like Brazilian average, like 25 per cent or 30 per cent a year. And medium sized companies.
If you take these three variables, when a company like this had an exceptional entrepreneur, maybe revenues are bigger than $6-million or so, with 25 per cent or 35 per cent a year growth, these entrepreneurs became sad because they couldn’t reach their dream.