Z/Yen seeks to share the rewards of successful advisory work with its clients. Sharing the attendant risks can sometimes mean "putting your money where your mouth is". Z/Yen is prepared to share risks in a number of ways, portions of fees based on successful work, performance-linked fees, joint marketing and joint products. Increasingly, but relatively rare, Z/Yen is prepared to invest in clients, e.g. subscribe for shares, purchase shares, arrange finance or provide loans. The vehicles for investment in clients are Z/Yen ventures.
Z/Yen's investment in clients is based on the belief that advisory services combined with capital can, in certain circumstances, achieve more than advice or capital alone. Z/Yen is not a banker; if clients have a simple money problem, there are sophisticated financial markets available to them which Z/Yen can help navigate. More complex circumstances, such as a major change in direction undertaken under Z/Yen's advice or joint undertakings among clients, can require seed money or enabling finance. Z/Yen is prepared to take stakes in these circumstances and seeks, over the longer term, a return above that of a typical financial institution. Above average returns can be gained by Z/Yen's active deployment of its own resources in helping its clients succeed.
Z/Yen has access to venture capital funds under certain conditions (naturally, the conditions are those suiting the risk/reward profile of the investors). In outline, Z/Yen can arrange for investments in commercial companies for which it has worked, or has an agreement to perform work where it can gain significant background and input. Z/Yen is particularly interested in stakes where the company is involved with:
Z/Yen ties any investment to a framework agreement setting out the agreed strategy, specific projects which will be undertaken, specific milestones for operational achievement, specific financial milestones, the basis of the investment and the terms of the reward. Z/Yen may arrange for a portion of its fees to be paid after the investment has been made. As is normal with all Z/Yen projects, these fees would be for previously agreed work in helping the company to meet its targets. Z/Yen will often arrange for more detailed operational information to be provided, e.g. management accounts, and sometimes for an external board member.
The key benefit of investing in clients for Z/Yen is higher returns from investments which Z/Yen is better placed to judge because of working with the company. Unlike a bank or most venture capitalists, Z/Yen is actively working at an operational level with organisations in business services, high technology and property. Z/Yen would seek to maximise its investment in an number of ways, such as through establishing relationships with prospective clients, personnel, joint ventures, suppliers or other investors.
Z/Yen ventures are some of the most exciting areas of Z/Yen's work and offer significant opportunities for its clients and for Z/Yen. Working together with its clients, Z/Yen believes that the combination of advice and finance is a powerful one, motivating and improving both organisations.