Annual letter to shareholders – 2023
May 12th, 2023, Dear Shareholders,
In the wake of the largest bank failures since the GFC of 2008, we have been reminded that risk management is still not well understood as a tool for value-creation. So, we’ll say it again, from a pure technical point of view: Value is increased by anything that augments future cash flows, AND/OR by anything that reduces the Risk of such cash flows.
Two years have passed since Aregra was officially incorporated, the company’s future is bright if and only if we take it in our hands. In this letter I would like us to take our own advice and do a quick Pre-mortem; let's imagine the worst scenario happened and Aregra failed on its mission to become the number 1 Private Debt Advisory (so we can avoid such fate):
For a minute, imagine we are 12 months from now, and I am here to tell you why the company did not survive to see its 3rd anniversary:
-No conscious timing and short-term goal setting, measurement of weekly goals
-Relying on a single person to execute all operational and strategical plans (so lets do planned employee trainings, delegate)
-We kept a large deal concentration
-We did not rely on automation for operational tasks
-Headcount grew without setting a clear cult-like admission process to ensure our core values were paramount for everyone
-We did not live up to our core values: Truth, Health and Wealth for our customers…We are risk analysts (who do take risks) at all levels , we advocate our ideas by caring and by being creative (because ideas do not sell themselves).
Now, let's clearly articulate our main objective, and why its transcendent, our long-term game plan:
Become the most trusted marketplace for Private Debt in Mexico, where funding partners and companies converge to structure debt-raising for SMEs.
Why is it transcendent? Inefficiencies in capital Markets cost society incalculable amounts of value not created by productive companies which struggle to raise funds hindering productivity, efficiency and competitiveness.
What’s our 12-month game plan:
1-Keep 12 months liquidity
2-Onboard 5 new IB clients
3-Keep Opex below 10%
4-Automate client onboarding.
5-Give-to-get SaaS approach to automate Valuations and Underwritings
6-Explore the role of Media by releasing a basic course Finance 101 on our website
7-Organize Aregra’s first summit for funding partners
8-Develop detailed business plan and pitch deck for a possible capital raising round
Thank you for your trust,
Carlos - CEO