Like all of the world’s greatest investors, Alejandro Betancourt López makes choosing which companies to back look easy.
With a net worth of more than $2.6 billion, the Venezuelan investor and executive fits every definition of success, but it’s not the size of his bank account that’s impressive — it’s how he got there.
How has he amassed a fortune? He puts his efforts into analyzing only the most critical strengths of companies.
The Most Important Traits
Like any savvy entrepreneur, Leopoldo Alejandro Betancourt López does his due diligence. But his focus is never confined to balance sheets, quarterly earnings, and the annual prospectus. Those materials are vital, he agreed, but don’t reveal a complete picture of financial health or earnings potential.
To understand the true promise of a company, he prefers to peek into its personnel files.
“There are plenty of great ideas out there, but there’s the factor that is a human factor,” he said. “You could have many great ideas, but the execution is what matters.”
Company leadership, more than product differentiators or asset-to-debt ratios, determines the likelihood of stratospheric success, the kind that reaps real investment rewards. Sticking to a by-the-numbers approach to investing may be a solid strategy for a slow accumulation over time, but won’t necessarily yield a substantial increase in net worth.
A History of Success
As the founder and director of the multidisciplinary investment fund O’Hara Administration, Leopoldo Alejandro Betancourt López puts his analytic skills to use on behalf of others. But it’s only one side of his strategy. He has also found tremendous success in backing startup companies as an angel investor.
Across industries as diverse as technology, fashion, and energy, he has amassed a healthy portion of his net worth by betting big on remarkable companies in their earliest stages. Perhaps more than any other kind of investing, backing nascent businesses requires a keen eye for talent.
Take Silicon Valley, for example. The tech megalopolis produces hundreds of startups every year, each promising to revolutionize work, reframe our understanding of life, or reimagine leisure time.
Founded and staffed by the brightest, most ambitious minds on the planet, every one of these companies has a solution to sell and a charismatic presentation to entice the moneyed elite to buy.
But even among the world’s best bets, unicorns are rare.
That’s why Betancourt López looks beyond the product and the pitch to examine the human beings running the business.
“I believe that management — the right professionals that take such ideas into something real and turn them into something very pragmatic and real — is what matters,” he said. “So even if the idea is great, if you don’t have the right people behind it, it will never happen. For me, the critical part of the whole equation is to have the right human factor behind this.”
That sounds so simple that it’s nearly a cliche. The real question — the one never asked — is just how does an investor, often thousands of miles away, correctly judge the abilities and intents of company leadership teams?
Examining one of Leopoldo Alejandro Betancourt López’s biggest paydays can demonstrate this idea in action.
A Bet Against Uber
Evaluating executive talent isn’t just about assessing cognitive ability or educational pedigree. Sometimes, a company’s leadership team has other qualities that give the company a unique advantage. Take, for example, Leopoldo Alejandro Betancourt López’s bet against Uber: Auro Travel.
Auro Travel is a ride-for-hire platform in Spain that operates similarly to services like Lyft and Uber. Betancourt López came aboard as an early investor after realizing the singular legal opportunity quirk the company could use to its advantage.
Because the enterprise was located in Spain, the leadership team was better prepared to take advantage of a legal hurdle that required all ride-sharing drivers to hold special licenses. And the government limited the number available.
Auro was able to buy up the bulk of the licenses to use for their drivers or sell to others, cornering the market almost completely.
“The advantage is that we had the view or the vision before it happened in Spain and we acquired these licenses before the market consolidated,” Betancourt López recalled. “That gave us a differentiation from competitors because they had to arrive and then the cost of entry or the barriers of entry were much higher for them because they were late in the game. That’s what gave us the footing.
“To go a step further on that, we built infrastructure, we formed the people that were the drivers. We created a kind of an ecosystem around the service providers that put us in a very, very differentiated position,” he added.
On the surface, betting against Uber sounds ludicrous. But by a careful examination of the situation, Leopoldo Alejandro Betancourt López made a sound decision.
