RICH GOTTBRATH

CHIEF INVESTMENT OFFICER, VALUE CREATION STRATEGIES HOLDINGS

THOUGHT

Leader

AN INNOVATOR OF INDUSTRY
“CAPITALISM SHOULDN’T BE A DIRTY WORD.”

As Featured:

We live in a society where the term capitalism has become a dirty word to a significant portion of the population. For many, the term evokes imagery of the monocled monopoly man or Scrooge McDuck swimming in a pool of gold – harkening back to the robber baron tycoons of the early 20th century. For others, the term is more personal and speaks to the forces which are entering their neighborhoods and employers preaching a gospel of efficiency, profit and “progress” – but which all too often result in “redundancies”, cultural decay, and displacement. Capitalism shouldn’t be a dirty word.

I am a capitalist. I’ve always been a student of economics and come from a career background in investment banking and private equity. While I learned a lot in that world, I became all too familiar of the cancer residing in the finance industry – the world of derivatives, leveraged buyouts and financial engineering. Did that world create any true value? Not nominal value…but REAL tangible economic value. Was it anything more than a giant craps table where a few parties had commandeered the banner of capitalism, bastardizing it beyond the point of recognition, all for personal gain at the expense of the broader society?

For capitalism to work, those of us who are capital allocators have an immense responsibility to make informed investments in ideas, products, places and people which innovate and constantly challenge the status quo – propelling society forward and driving economic growth. That innovation – that disruption – is the lifeblood of the economy. History shows that the most successful companies and economies are those which never stop innovating. When companies or economies become complacent and stop innovating, they eventually but inevitably fail. For too long the lion’s share of the capital finance industry has deprived our communities’ doers, thinkers, and innovators of the capital they need to take their dreams and ideas and turn them into action. This is especially true for the innovators who didn’t graduate “from the right school” or didn’t start their business in the right city (or the right part of the city). It is long past time to change that.

I am not an engineer or an inventor – I am just not that smart or creative. That said, I do know how to build theses around trends in innovations, allocate capital and provide coaching to help make sure those engineers, inventors and entrepreneurs are able to turn their dreams into plans and their plans into real world innovations. I am eager to preach a new gospel of capitalism – one that centers around economic opportunity for all, especially those who have been disenfranchised by the traditional system. One that is focused on creating high-quality jobs in our communities so that the talent of the next generation has a reason to want to stay in the neighborhoods where they grew up. One that allocates capital with priority given to those willing to challenge the status quo and rewards those who develop disruptive products and services. One that engrains value creation, rather than wealth accumulation, as part of the cultural ethos. That is my brand of capitalism.

Rich Gottbrath is Chief Investment Officer of Value Creation Strategies Holdings, a private investment firm with offices in San Antonio and Austin. Rich’s investment background extends to a variety of asset classes and capital allocation strategies. In addition to venture capital and private equity, he has extensive real estate investment experience in multi-family, commercial development and redevelopment, both as a consultant and as a principal developer. After spending the first part of his career in investment banking and private equity, Rich has adopted an investment approach centered around real economic value creation and innovation rather than financial engineering.

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