Castle Hill Values - 3 of 4 - Collaboration
“The good men may do separately, is small compared with what they may do collectively.” - Benjamin Franklin
“25% of something is better than 100% of nothing.” - Common Sense
Before launching Castle Hill, I had the privilege of working for a well-respected, top-tier Wall Street firm. While there were positives - name recognition, deal flow, nice views of Central Park - overall it was a disappointment. It was my first experience with a zero-sum mentality - at the individual and firm level. “If I can’t have it - you don’t get it,” may as well have been the motto of our business unit. Introducing new business ideas, working together to help clients and increase revenue, initiatives that are the basic blocking and tackling of building financial service businesses - all went nowhere.
Contrast this with my prior firm, a scrappy entrepreneurial financial services firm trying to build scale in different product lines. We had to work together. We had to try new ideas. And we had to work together to compete. Whereas the flow was limited (as were the views) - the experience stuck with me. In my final paycheck, I had 5 different line items from collaborating business groups.
Both experiences were illuminating and when the opportunity to launch Castle Hill presented itself, I committed to making Collaboration a core principle. I do it because when I collaborate with my colleagues vs. being an army of one, I get to do more of what I enjoy: working with other people, closing business, and sharing the win. It’s better together.
Hierarchical organizations may force collaboration through compensation structures and codes of conduct. An entrepreneurial platform like Castle Hill attracts seasoned sales professionals who wish to take control over their careers and own their upside. However, it takes time for strangers to trust one another and share their network and relationships. It is akin to a three-legged race…it takes a while to get into flow with someone.
Claiming a culture of collaboration is easy. Doing it is hard. At Castle Hill, we prioritize and inculcate our spirit of cooperation in several ways.
Build Trust: Trust is paramount as an operating principle at Castle Hill, we do not retrade. My business partner and I will not renegotiate any agreement. Our reps understand that whatever we say we are going to do, we do it. That foundation of trust sets the tone of the organization.
Share Aggressively: We lead by example. Wherever possible we split commissions and reward our colleagues. Our colleagues trust us with their commissions and that in any collaborative engagement, they will be treated fairly. One example was a recent SPV we created for a pre-IPO company. Our reps were able to participate in a no-carry share class. We would not consider taking a performance fee from our colleagues.
Promote Collaboration Successes: We establish structure and opportunities for collaboration. We host a monthly sales collaboration call for all of our colleagues to join and discuss what is working and what isn’t, share feedback, and more importantly highlight those collaboration case studies. The secondary purpose of the call is for individuals to see one another and gain a sense of who the parties are, and their areas of expertise. We don’t assume new reps will take time to reach out to other colleagues on the platform. We take the first step.
Communicate in Person: Raising capital for sophisticated strategies or private companies is hard. That is why when the business works…it works very well. However, collaboration does not happen on an online platform or drop-down menu. It happens over face-to-face meetings, conversations, and multiple Zoom calls. We encourage our colleagues to get to know one another. We host a series of product calls and social events around the country and at our New York event space to encourage our reps to get to know one another. You tend to want to work with people you know and trust.
Control the Funnel: I screen for individuals who play nice in the sandbox and want to work with colleagues on the platform. I don’t want a series of islands. I want a coherent archipelago. In addition, I curate our platform to bring on complementary investor coverage and product knowledge. Collaboration flows with individuals that bring complementary prospects and new perspectives.
Core Group: Seats are valuable at Castle Hill. We do not plan on adding hundreds of registered reps. We want a core group of individuals we know, trust and want to be successful and enjoy being successful together. Each seat on our broker/dealer platform has value. I add accordingly.
Our business is one of the long-tail. Institutional allocations are low probability events and success happens on the margin.
Successful external capital raisers generally operate with a proven process and a defined group of strong relationships. When you combine multiple threads of solid relationships into a fabric that can be deployed for the client’s benefit - it’s powerful and it works. Our colleagues do not worry about circumvention, they do not worry about being undercut or front-run on a specific investor name. Why? Because my colleague and I are in charge and that is not how we operate.
We’re of the view that it’s better together. To work independently but know that there are accomplished colleagues who can be brought into a capital raising engagement, understand the space, and have had experience - it’s powerful.
It’s so much better together.