A Logo Wall Is Not a Track Record

A track record is a claim until someone asks what it actually means. One example, anonymized.

In my former life, before I invested my own capital, an institutional investor asked me to look at a capital-markets firm before hiring it. The firm's materials cited more than a billion dollars in "closed" financing and advisory transactions, laid out across a wall of company logos. The investor wanted to know what stood behind the number before putting a pending transaction in the firm's hands.

I read the materials the way I would read a title report: for what they actually established, not for what they implied.

The word doing all the work was "closed," and it never specified a role. Origination, advice to one side, an introduction, a position held at the closing table, all read the same on a logo wall. There were no engagement letters, term sheets, or closing statements behind the numbers. The fine print reserved the right to have done, or to later do, almost anything with the companies named. The presentation implied authorship that the substantiation never established.

I reported that the track record could not be verified as presented, and I listed what the firm would need to produce to support it. The investor asked for those documents. The conversation ended there.

A logo wall is a claim, not a credential. Before you rely on a track record, ask what each entry means and what stands behind it. The dollar figure is the easy part. The role is what matters, and it is the thing most often left undefined.

I no longer do that work for other people. I do it for myself, before a counterparty gets anywhere near a transaction, or my capital.

Benoit Lapointe invests in healthcare and real estate. He is the principal of Meridian in Newport Beach and spent years in the broker's chair before becoming a principal. benoitlapointe.com