Know. Grow. Exit.
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Good Monday Morning,
Daylight – Loren’s Note – Last week, Mind Your Business taped at the EY Strategic Growth Forum, where I interviewed a bunch of impressive Entrepreneurs, including Matt O’Hayer, Founder of Vital Farms, a Forbes Small Giant that sells $100 million a year in eggs, in part because Matt figured out how to take private equity without selling his soul.(He did it by choosing his investors carefully and taking private equity in small slices.)
If there was one consistent message I heard at the Palm Springs, California event, it was that there is a mountain of investment capital out there looking for a home. If you are a business owner and you are thinking about selling – I heard it over and over – now is the time. And I’m pretty sure I’ve heard some version of that message every year at the Forum from people who make their livings by helping others sell their businesses. What do you think? Send us your thoughts!
Selling the Business – There’s a conflict that arises when running a business while also preparing it for sale: “Many businesses are run with the objective of minimizing tax liabilities. Unfortunately, the same techniques and accounting practices that minimize taxes also minimize the value of a business.”
M&A – From M&A Guru Zack Eller – CommScope, a maker of telecommunication equipment will buy Arris International for $7.4 billion. The race for 5G is on and this acquisition was done to help CommScope support this race.
Endred agreed to buy Corporate Spending Innovations, a provider of corporate payment solutions, in a deal valued around $600 million. This deal will be looked back on as a steal. Corporate Spending Innovations offers a virtual credit card service where invoices can be paid with a one-time use virtual card that protects bank data. This is the future of accounts payable.
Mphasis acquired Stelligent Systems, a technology services company specializing in DevOps automation on Amazon Web Services, for $25 million.
SAP will buy Qualtrics, software firm, for $8 billion.
Style – Netflix or Hollywood – Which do you trust to make the blockbuster?Netflix has an algorithm that displays user preferences based on past viewings and predicts what they may want to watch next. Hollywood lands a hit and if the studio thinks it makes sense, or simply doesn’t care, they make two or three more movies with the same characters – often the same storyline. But when it works, it dominates the weekend box office.
Unsure of the sustainability of the Netflix algorithm or the Hollywood system. With so much content available, there simply isn’t enough time to watch it all or make it to the multiplex every weekend. Also, the algorithm gives odd suggestions – just finished re-watching the drug-fueled action drama “Breaking Bad” and it said I would love the silly “Unbreakable Kimmy Schmidt”, a Netflix original.
Natural Disaster – The death toll for the California wildfires has climbed to 29with more than 100 still missing or unaccounted for. Population centers as large as 250,000 were evacuated over the weekend and as of now 7,000 structures burned to the ground including a Gold Rush-era landmark bridge.
Politics – Thought he was done? Former Starbucks chief Howard Schultz is putting together a crack PR team, leading to speculation on a run in 2020. This team includes outspoken pundit Steve Schmidt, who ran the late John McCain’s presidential campaign. Schmidt pushed the Sarah Palin pick a decade ago. Schultz is on the growing trend of businessmen and women getting involved with socio-political causes called social impact entrepreneurship.
Hedge Funds – Veritas Capital and Elliott Management have acquired healthcare software maker Athenahealth for $5.5 billion. Athenahealth’s service tracks revenue from patients, doctors and hospitals. Deal finalized shortly after Founder Jonathan Bush stepped down after admitting to assaulting former wife years earlier.
Employee-Worker Relations – UPS Freight and its workers union are both prepping for a possible strike as both parties sit down for contract negotiations. UPS approached with a final offer after the union demanded higher wages and limits to subcontracting.
IPO – Softbank has its sights set on the world’s largest IPO for it Japanese mobile business. It plans on raising $21 billion. It would be the biggest since Alibaba went public four years ago. This is to make Softbank a top global tech investor after investing in workplace startups like WeWork and Slack. The move “will effectively split the company in two, allowing investors to choose between its mobile unit and tech investment business.”
Interloop, a socks supplier for Nike and Adidas, is planning to raise as much as $51 million in Pakistan’s largest IPO ever.
Human Resources – Because of Tuesday’s election, Arkansas will likely have the highest effective minimum wage in the country: “Arkansas has set up a large-scale test case: Will the pay hike lift people out of poverty in the sixth poorest state? Or will it be a ‘job killer’ as popular Republican Gov. Asa Hutchinson warned?
“About 300,000 workers are expected to get raises because of the changes. Business owners in Arkansas are deeply divided about it, but voters sent a clear message: 68 percent voted in favor of the ballot initiative to increase the minimum wage. … ‘I voted for it. I’m very proud of Arkansas for this,’ said Capi Peck, the longtime owner of Trio’s Restaurant in Little Rock.”
Venture Capital – Turvo, a real-time collaborative logistics platform, raised $60 million.
Samanage, a provider of employee service success solutions, raised $30 million.
Rael, a women’s health company, raised $17.5 million.
Quantela, a digital technology solutions company focused on artificial intelligence and IoT, raised $10 million.
Opternative, a eye healthcare technology company, raised $9 million.
Plus One Robotics, a 3-D vision and controls developer for robotic automation in the logistics and e-commerce markets, raised $8.3 million.
BigBox VR, a developer of online VR multiplayer games, raised $5 million.
Analytical Flavor Systems, a developer of an artificial intelligence platform for the food and beverage producers, raised $4 million.
Dormify, a brand focused on dorm room and apartment decor, raised $3.45 million.
Spotlight – Member Mona Patel has a new book promoting a great cause. The book follows Ava, an innovative elephant.
From Mona: “Ava breaks a swing because, well…it wasn’t designed for her. She decides that’s not OK, and sets out to ‘what if’ and design a better one. But her friend, the skunk finds it ridiculous. ‘We can’t do that, it would cost too much money!’ While the two of them talk, Ash the orangutan rolls up his sleeves and starts prototyping.”
All the proceeds go to the next generation of female Entrepreneurs through E-School for Girls.
And that’s what’s ahead.