Maveriqs Profile: Bernardo Barajas, Managing Member, Foundation Capital Partners
By Lamin Turay
Bernardo Barajas is a Managing Member of Foundation Capital Partners LLC, a private investment firm that provides capital procurement options for small and medium size business owners. He's originally from Mexico, which is where he learned the value of hard work, and building a future for yourself. In his role at Foundation Capital, Bernardo helps entrepreneurs gain the financial assistance they need to grow exponentially. He's a savvy investor who recognizes the importance of playing to your strengths, putting together a solid team, and most importantly, always having a plan. We met with Bernardo to talk about his experience as an investor, and to discuss his best pieces of advice for entrepreneurs seeking guidance and funding for their growing businesses.
How did your entrepreneurial journey begin?
I was born and raised in Mexico City. It’s a big place, where there are a lot of people who need a job. It’s the type of place where, at an early age, you try to be ahead of everybody in order to survive. My first experience as an entrepreneur there was repackaging old bottles of cologne that my dad had, and selling them at school. Kids would buy them, but eventually their mothers got upset, and called the teachers. That’s when my first business was shut down (laughs). I was six years old when I was doing all that.
On the more serious and focused side, I reached a point in my career where I decided that I did not want to keep working for someone else, and making them rich “per se". It felt like a waste of my talent. I wanted to do things for myself. That thinking is what turned me into an entrepreneur and business owner.
What was your motivation to move from being an entrepreneur to becoming an investor as well?
I’ve had a lot of exposure to smaller companies that are up to, or under 100 employees. What I’ve seen, is that there are a lot of these companies that just need help. Even a little help can allow them to grow a whole lot. For example, I’ve seen small construction companies that were grossing under $1 million a year, and with some of our investment funds they were able to land large government contracts, and grow to making $4 million a year. That little help goes a long way for small businesses.
What advice do you have for beginner entrepreneurs who receive funding, but may not know how to deploy it properly?
Here’s the thing - You have to have a plan! You need to know what to do with the money once you get it. You can’t sit on it for a day, or even a minute. You need to know ahead of time. You should be thinking, “OK, I’m going to use this money to increase inventory,” or “I’m going to purchase more equipment.” Whatever it may be, you just need to have a plan in place for that money. You should also know that the plan is going to have a return. The cost of that money, minus the return, is going to be your profit.
A lot of people don’t put a plan in place, and they end up going under. It’s no joke though! If you don’t have a plan for how to use your funding, you will not be able to get it back, and your business will end up in a much worse position than it was to start.
If you don’t have a plan for how to use your funding, you will not be able to get it back, and your business will end up in a much worse position than it was to start."
What’s your best piece of advice for entrepreneurs who are pitching their business in order to gain funding?
I repeat - Have a plan! Business owners are not perfect. We all have our different flaws. One of the ways to make things more efficient for your company is to have a good team. You need to have a good salesperson. You need to have a good marketer. You need to have a good CEO; someone who will make the right decisions at the right time. With all of those pieces in place you have a more complete organization. A full spectrum.
When someone pitches me something that has the full spectrum, it makes more sense because it is going to succeed. When you get a pitch from an individual who does not have a clear idea of what they want to do, you know that person will most likely misuse the funds they are seeking. Then they’re gonna be in trouble. As investors, we can smell when someone is gonna be in trouble. We can smell it from far away.
Can you share your thoughts on how to identify a company as a good investment opportunity?
Good companies have good structures. They’re just like a sports team. Every one of the players on a sports team, or every executives in a company needs to be good at what they do. If you have a good team, you have a good company. Obviously, the captain of the team, which is the CEO, has to be knowledgeable about every single piece of the company. They need to know how things operate and to be involved in it. When we see that, we know that’s a successful company. There is no “One-Man Company.” Sure, there have been cases in history where there are individual innovators who know how to do it all, but those are very very rare. We focus on companies that have a quality team.
In your opinion what are the major factors in building a successful startup?
First you need a good idea. You don’t necessarily have to reinvent the wheel, but it needs to be a good idea. After the idea you need to have knowledge of the product you are selling. Then, after the product knowledge, you need to build a team. Have someone who will focus on the selling, have someone who will focus on the marketing, which is one of the most important things these days. You should also have someone who knows digital media, and can drive sales that way. In addition to all that, you’ll have to understand the company’s financing and legal structure. You’ll need teamwork as well.
Once you have those key components in place, then you can move to step two - deploying the money. It will either be your own capital or someone else’s capital that you will be using to make things work. It will be a lot easier if you understand all of the things I mentioned.
As an investor, what are some of the things you wish more entrepreneurs understood?
The biggest thing that I see right now, is that business owners need to understand that revenue which comes into their company is not their money to spend. You have things like payroll, operating expenses, marketing expenses... etc. You have to put a plan in place and have projections for at least six months in advance. You also need to save your money whenever possible.
Just because you have $100k doesn’t mean you should blow through $80k in one month, and only be left with $20k for the next month. You need to have a growing plan to succeed. If you have no growing plan, and you’re just spending money because you think you’re making a lot of profit, you won’t succeed. What happens when you have a slow month or quarter? Then you’re back at square one.
What are some of the more interesting upcoming projects that you as an individual, and the company you work at involved in?
Here at Foundation Capital Partners we just acquired a company called Health Through Genetics or HTG. They are the distribution channel for a genetics lab CQUENTIA LABS (www.cquentia.com) In this joint venture, we create a test “Pgx", which is able to tell Patients/Physicians whether a medication could be an effective treatment for you or whether you could have side effects to that specific medication, increasing the risk to your current lifestyle. The product itself is called CQ Live. We’ve got some of the biggest hospitals in the country signing off on it and testing it right now.
You recently performed an appraisal of Maveriqs Academy, and provided a valuation on the company. As a seasoned investor, what did you see in Maveriqs Academy that was of true value?
I think Maveriqs Academy brings knowledge to anyone who is seeking it. You just need to go online and read it. You don’t need to do anything special - It’s already there! It brings the opportunity of putting business owners, investors, and really creative people closer to the everyday individual that wants to build a business. I strongly believe it’s important for portals like Maveriqs Academy to be out there.
We would like to express our gratitude for the opportunity to interview Bernardo. His insight into developing a plan for your business is incredibly valuable. What are your thoughts on what he has to say? Have you been seeking funding for your business and would like to engage with Bernardo? Please leave any questions or feedback in the comments below?