Unicorns or Stallions?


When I started Twist Image (a Digital Marketing agency) back in the year 2000, I was young and confident. I remember my original business partner (who soon after left) laughing at me when I said I wanted to work on brands like Nike and Coca-Cola. Well he was sort of right, I never did get to work on those brands, instead I had the pleasure of working with companies like Adidas, Walmart, and TD Bank –  and the list goes on. At 21 years old, I didn’t have any limiting beliefs. The future was mine for the taking.

Today I look back at what I accomplished along with my three other business partners – Aubrey Rosenhek, Mitch Joel, and Mark Goodman – and I am more than just proud. Thanks to my experience this past year working in Private Equity, I have had the opportunity to hear from and evaluate almost a hundred different companies, each looking for capital to take their businesses to the next stage. Through my new “investor” lens, I recently looked back at my past and can’t help but feel impressed with how we built a national company – with no outside funding or credit line, but with sales (and most of them organic, for that matter). Even WPP, one of the largest advertising holding companies in the world, who acquired Twist Image in 2014, and has made thousands of acquisitions since its inception, was impressed with how we grew our agency, our profit margin, and our overall metrics. We were one of their few acquisitions based on sound financials (instead of pure top-line growth).

We didn’t just build a large business; we built a healthy one.

I understand that not every business can grow without outside funding, as some are far more capital-intensive, especially in Cleantech. But I believe that there is an important lesson from my past – all the more relevant in today’s world of fumbling WeWork IPO’s, outrageous valuations, and companies being glorified for how much money they can raise, instead of how much revenue they are generating.  This week’s Forbes article does a good job of explaining it.

Today I see so many VC’s and investors looking for the next unicorn. It’s understandable.  When we read the news, it seems as though every few weeks there is an announcement of another major tech acquisition with skyrocketing multiples. Every investor wants “in” on that action, and the FOMO is real.  I liken it to slot machines in a casino, where the counter from the last jackpot won is enough to entice the masses to lose their savings, one dollar at a time. But any sophisticated gambler knows that those are not the best odds in the house. A successful gambler is betting on a combination of their skill, against that of their opponents, and on relatively good odds of winning.

Similarly, in investing, I believe it’s time for us to also acknowledge the companies that may never get 50x multiples, but instead have healthy, revenue-generating businesses. Companies that may not have an exponentially-growing user-base but have a steady sales growth – or at the very least a revenue-model!

At Inerjys, our builder-first approach does not rely on unicorns to carry the returns for under-performing companies in the portfolio. Something many VC’s admittedly do is focus on the top 10% of their portfolio, and willingly neglect the remaining under-performers.  For Inerjys, each investment aims to succeed.  Healthy businesses with real revenue-models, paying customers, and imminent revenues. Entrepreneurs who know how to bootstrap, who are focused on business results, and reinvest profits in the business instead of relying indefinitely on new rounds of financing. Because investor fatigue is a real concern. It has killed all too many businesses whose lifeline was so connected to fundraising that when the funds disappeared, so did they.

We’re much more interested in raising stallions than dreaming about unicorns. Stallions are real, they perform, and are certainly not one-in-a-million.



Mick brings 18 years of professional services experience to Inerjys and is responsible for both operations, marketing and helping portfolio companies with their commercialization challenges. Mick founded Twist Image in 2000, grew it to one of the largest Digital Marketing agencies in Canada which was later acquired by WPP in 2014. Throughout his career, Mick has worked with Fortune 500 companies in developing business strategies, marketing plans and helping them transform their businesses into the digital age.

Mickael KanfiComment