Haft Group - Counseling Small and Mid-Cap Ventures for 35 Years

The Haft Approach - Personal, Hands on Diligence

"It's about knowing people, knowing how to represent them, and having good judgement."

When I first sit down with a new company, I take a look at two things. First, I analyze the company’s balance sheet and profit and loss. I evaluate the principal of the business, his involvement as principal, and the equity position he holds.

I need to know the client, to do our due diligence.

We eyeball our client. The management of any small growth company is critical. I do a fairly thorough background check. I need the company to pass muster not only with me, but the people that I know.

I involve my advisory board early on in the process. These are gentlemen I have known for many years; friends and colleagues, and some of them investors. They are attorneys, brokers, high net worth individuals, M&A professionals, and bankers.

We formulate a plan and create a vision with our client of where we want to go.

We then set up an investor relations program. We have a series of meetings, one on one meetings and group meetings, to introduce the company to a series of individuals. There may be a presentation before a professional organization, at a dinner function, or in a private, intimate setting.

I believe that continuity is critical. It is extremely important for a client to come and meet the management of other firms in New York on a regular basis, usually quarterly. You have to be there to be counted. You have to show up.

If there are 10, or 12, or 14 brokers, money managers and private investors that follow you, then that is your audience because they then can say “Hey, I met this company. I think they're great. They have great management. There's nice balance sheet that's growing. They have a strategy of expansion and I like that.” So, they may tell those with whom they are associated with about your firm. Your company grows that credibility inside to outside.

The management of our client has to get to know this core audience to whom I am introducing them, and to be comfortable with them. That’s how you enhance shareholder values. It’s not an in and out game.

We plan for growth. You look at XYZ company, year one and consider where you would like them to be in year five. What would you like to have them do? What are their expansion goals? What are their M&A goals? What are their capital needs?

My business and my contacts are very much the same. It's a feeder business; my contacts are a feeder business to the investment banking community. I look at some of my board of advisors; that's what we do. We create investor relations package, which we then can move on and have them grow into a larger banking firm or to raising capital for their own needs and we would stay involved as consultants. But investor relations have to have a purpose. Shareholder values, the increase of shareholder values, for the longevity of the shareholder and of the client is very, very significant.

It’s a continuous process for which I and my colleagues are there every step of the way.

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