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Financial Recapitalizations
Join us on Thursday February 19th as Joe Statter, managing director at Evergreen Advisors Capital speaks at XPX DC Metro on Financial Recapitalizations: Getting Liquidity While Preserving Future Upside.
Joe Statter will provide an overview of recapitalizations, and discuss the structure and the benefits to business owners of this strategy. Joe will present a case study of a recent transaction which provided the business owner with current liquidity and future upside as the business continues to grow.
[Read more…]
Entreprenuer Spotlight – LifeJourney
In this Entrepreneur Spotlight we focus on LifeJourney. LifeJourney is a technology company in the education market that enables students to test-drive their future by living a day in the life of America’s STEM leaders. Schools use LifeJourney in their classroom to inspire students to pursue STEM careers. LifeJourney’s customers include middle and high schools, Community Colleges, Colleges and Fortune 500 companies. Some of their partners include General Dynamics, Intel, Lockheed Martin, COPT, Kaspersky, Cyberpoint, BAE, and Symantec. We interviewed Rick Gertiz, CEO of LifeJourney, on how he got started in the business of STEM Education and how his background has helped him to succeed.
Where did the idea for LifeJourney come from?
I had often participated in mentoring of students and concluded that mentorship does not scale. Less than 1% of all students in America ever experience a mentor or participate in an internship. We needed a way to bring the nation’s leading STEM companies together to mentor a nation. LifeJourney enables a single mentor to guide 1 million students with fewer than 15 minutes of time commitment a month. LifeJourney is a platform to share your journey with the next generation.
What do you think is the biggest challenge facing STEM education? Awareness. Ask a student in school the age-old question: “What do you want to be when you grow up?” And you will still hear doctor, lawyer and athlete. Just in Maryland alone there are over 20,000 open and unfulfilled jobs in technology driven fields. Still we do not hear “data scientist” or “forensic analyst.” This occurs because students cannot connect their classroom experience to the STEM jobs in their future. They need to understand the path. They need to understand the journey and they need someone to guide them toward that. Parents struggle with guiding their students, as technology is the new alphabet and modern days skills are essential to compete in this new digital economy.
Mike Gill Appointed Secretary of Maryland Economic Development
Evergreen Advisors is pleased to announce that today Gov – elect Larry Hogan announced that he has appointed Mike Gill, Secretary of the Maryland Department of Business and Economic Development (DBED), the state’s chief economic development agency.
Mike is Chairman and a Principal of Evergreen Advisors, LLC, a Mid-Atlantic investment bank with strong capabilities in Mergers and Acquisition, Corporate Finance, Valuation and CFO Advisory Services.
Rick Kohr, CEO of Evergreen Advisors, commented on the announcement, “I am excited for the people of the State of Maryland and, in particular, the business community of the state. Mike has a passion for creating a great ecosystem for the business world – this creates jobs, tax base and a stronger community. His high energy, business acumen and positive outlook will be an important ingredient for improving this ecosystem in Maryland.”
“I’ve been a pretty vocal advocate out there talking about the need for a renewed focus on economic development and a need to grow the private sector,” Hogan said at a press conference Thursday announcing the appointment. “I believe Mike is the right man.”
Unstructured Data in FP&A
In a recent article titled Accounting’s Big Data Problem, published on CFO.com by David M. Katz, the author dives into the world of Big Data and how its use is slow to be adopted in the accounting profession. His underlying belief is that generally,
we as accountants, are behind the curve in utilizing Big Data, most specifically unstructured data. While the jury is still out on its impact in the financial reporting and audit functions, the use of unstructured data in Financial Planning and Analysis (FP&A) is critical.
As many experts will tell you a financial model is only as good as the inputs. True as that might be, it is the process of identifying the inputs through review and analysis of unstructured data which can identify the strategic correlation between the drivers and KPIs.
Key stakeholders from operations, sales & marketing, R&D, etc. should be viewed as important resources during the process, not only to provide easily identifiable data such as customer churn rate, but equally as important insight into unstructured data such as the customer onboarding process. Through this process an organization might identify a strong correlation between certain aspects of the onboarding process of a customer and their churn rate. Below are a few examples of structured data which has an equally important unstructured data component.
Digital Health Event
Please Join us for: Digital Health
Opportunities Enabled by the Affordable Care Act
The Affordable Care Act is enabling a new generation of companies to leverage information and technology to transform our healthcare ecosystem. There are many new products coming forward to help alleviate the pressure on the healthcare system, especially during the COVID-19 pandemic. Companies like Butterfly Network are making remote healthcare much easier, with portable and small ultraounds that analyse lung and cardiac health connecting to phones to present in a video chat with a qualified healthcare professional. Advancements like these are alleviating pressure on the healthcare industry, as well as reducing the costs that mount on them everyday. Areas such as electronic health records, care coordination, wellness, remote monitoring and data analytics are changing the healthcare system while helping traditional participants comply with the requirements of the ACA – an entrepreneurial perfect storm. Panelists will address the innovations that are arising to enable payers, providers, patients and pharma to reduce costs and improve outcomes.
Following the panel, several innovative growth-stage digital health companies will provide a three-minute overview and will be available for private meetings.
What is my Company worth today?
What is my Company worth today as I go to market? The easy answer is a multiple of revenue or earnings. It is desire to take an art and make it science. We love the scoreboard in sports and the business world.
But for me, it is clearly more than that. How does an investor look at this? Often times it is implicit but maybe not ….. you can really look at this more analytically then one might think. Looking at this objectively — as an investor or buyer might – can be very helpful in looking at valuations ranges more precisely (dangerous word but we will use it anyway today).
Joe Statter talks SPACs in Treasure Troves or Time bombs?
Joe Statter, Managing Director and head of the Washington / Northern Virginia office of Evergreen Advisors recently took part in roundtable focused on special purpose acquisition companies, or SPACS. Prior to Evergreen, Joe an investment professional and acting CFO to Capitol Acquisition Corp, a $262m SPAC, which launched in 2007 and merged with Two Harbors Investment Corp to create a REIT. He now advises clients on a range of corporate finance transactions, including SPACs.
The article discussed how while SPACs have become an increasingly common means of raising capital for private companies over the past decade, many PE houses have been eyeing these structures as a possible exit route or a means of raising capital for single deals. The Private Equity Findings Journal showcases new PE and VC related research from leading international academic thinkers, discussed and challenged by senior academics and practitioners.
A copy of this article can be found in Issue 9.
Entrepreneurial Spotlight
As the year comes to a close, we are starting to think about 2014 and the resolutions we want to set for the new year. Every year, the top New Year’s Resolution is too eat healthy and exercise regularly.
In the spirit of the New Year we have selected RightSize Health and Nutrition as our entrepreneurial spotlight for this newsletter.
RightSize has been in the health and wellness business for over 10 years and is focused on delicious weight loss meal replacements. For the spotlight, we recently sat down with the management team at Rightsize to learn more about weight loss trends, the impact they have on their business, and branding.
Tell us about the company’s signature product, the RightSize Smoothie?
RightSize Smoothies are delicious, satisfying weight loss beverages packed with protein, fiber, and over 20 essential vitamins and minerals that keep your body nourished. They conveniently replace breakfast and lunch and stave off hunger with a unique combination of protein, fiber and a low glycemic index–keeping you full for hours!
Interview with Alan Wilson
The only certain means of success is to render more and better service than is expected of you no matter what your task may be.
~Og Mandino
“Make the Best, Someone will buy it”
A conversation with Alan Wilson,
Chairman and CEO of McCormick & Company
It’s probably appropriate that you are reading my interview with Alan Wilson, Chairman and CEO of McCormick, between Thanksgiving and Christmas, two pretty important holidays to the McCormick Company. Recently, Shelley Lombardo, our Vice President of Marketing at Evergreen, and I visited Alan at McCormick’s headquarters in Sparks, Maryland. When you grow up in Baltimore there are certain things that matter to all Baltimoreans: The Orioles, the Chesapeake Bay and McCormick Spice- they define us.
My first up close and personal familiarity with McCormick was in the late 70’s when I was with IBM and had account management responsibility for McCormick. I was in awe of their leadership (Wells, Wilson, Thomas, Yates, Shelhoss, and Nordhoff), the way they treated their people, and their innovative approach to management development (inspired by C.P. McCormick).
And now it’s 2013, almost 2014 and the foundation whose first cornerstone was laid 124 years ago, gets stronger each year. The greatest spice company in the world.
Alan is in his 20th year with McCormick and completing his 6th year as the leader of this great company.
Thank you, Alan, for sharing your time with us. You carry the torch of responsibility and stewardship well.
Mike Gill
Chairman
Evergreen Advisors, LLC
Print the Full Interview Here – EA Interview Alan Wilson
InvestMaryland Challenge
Recently, Susan Kim covered the Investment Maryland Challenge in the Business Monthly. The InvestMaryland Challenge is a national seed and early-stage business competition hosted by the Maryland Department of Business and Economic Development in partnership with Inc. Magazine. The Challenge will award $400,000 in grants and a host of business services to companies in the life sciences and high tech industries. Grants are provided by the Department’s Maryland Venture Fund and the BioMaryland Center.
She reached out to Rick Kohr of Evergreen Advisors, a second year judge, to provide thoughts on the program. “This is leading-edge program that promotes the entrepreneurial energy in the state,” he said. “This, in conjunction with the $84 million investment dollars generated last year for the Maryland Venture Fund and numerous other venture funds with a presence in this state, creates a new level of much-needed support for new businesses and ideas. There had been a dearth of monies and commitment before these efforts.” [Read more…]
If You Look Good on Twitter, VCs May Take Notice, Wall Street Journal
Wall Street Journal – September 26, 2013 – Of course, traditional metrics still matter to investors. Startups need a competitive advantage, profitable business model and high-quality entrepreneurs to attract funding. But social media is playing an increasingly important role, investors say—especially as more people in their 20s and 30s rise to positions where they can back new companies. “Ten years from now, social media will be the starting point of any investment,”says Ted Leonsis, a partner at venture-capital firm Revolution LLC and chairman of the board at daily-deals site Groupon Inc.
Read more here and see top 8 tips for how to look good for investors on social media – http://online.wsj.com/article/SB10001424127887324659404578499702279196058.html
Please Join Us: CohnReznick’s Third Annual Liquidity and Capital Raising National Forum
You are cordially invited…
Space is limited, so register today.
The Forum
Third Annual Liquidity and Capital Raising National Forum which takes place on Tuesday, October 8, 2013 at the Four Seasons Hotel, Baltimore.
We will be joined by a panel of seasoned M&A and capital markets experts who will share their insights, advice, and experiences. This year’s forum is being moderated by Bloomberg, the national leader in global business and financial information. Bloomberg television and radio personality Carol Massar will bring her own unique style and perspective to the forum.
CohnReznick’s Third Annual Liquidity and Capital Raising National Forum offers a discussion of the latest trends and success stories for liquidity events and capital raises. It is designed for the key decision makers in companies — CEOs, CFOs, and Presidents — and will provide an ideal networking venue for attendees to connect, exchange ideas, and further develop beneficial relationships.
Cyber Landscape and Ecosystem in Maryland
Loyola University Alumni – On Friday, Sept. 20, meet Meet Rick Kohr, ’81, MBA ’86, the founding member and CEO of Evergreen Advisors LLC. Rick will provide a look at the cyber landscape here in Maryland and the ecosystem including education, incubators, commercial, and government. Rick has more than 25 years experience in advising early stage growth and middle market companies, growth financing, business evaluations, executing exit strategies, and CFO advisory services. The Company works with cyber companies on financing alternatives and exit strategies including raising capital, recapitalization, merger, sale and ESOP’s.
Rick is also managing member of the Chesapeake Emerging Opportunities Club, an early stage venture capital fund. He holds his License in Series 65 and 7, the 63 Uniform Securities License and 79 General Securities Agent License.
Rick serves on the Board of Directors for Meta Source, Healthcare Interactive, Pathsensors Inc., Emerging Technology Council, Economic Alliance of Greater Baltimore, Howard County Economic Development authority, and ICAT Logistics, Inc. He has held past board of directors positions and has also served on the Howard County Cyber Commission.
Speaker Series: Positioning Your Early Stage Company for Acquisition
You are working hard to build your company – but now what? Rick Kohr, CEO of Evergreen Advisors, will cover a variety of topics, including capital raise, how one prepares to exit a business, what one should be preparing, and deciding which moves to make.
Evergreen Advisors is a leading middle market investment bank and advisory firm focused on assisting companies in the areas of corporate finance, growth and exit strategies, business valuations and CFO advisory services. They serve clients throughout the Mid-Atlantic with offices in Columbia, Maryland and Vienna, Virginia.
Success – Dreams – An Interview with Dr. Freeman Hrabowski, President, UMBC
Few individuals have had an impact on higher education and on the lives of thousands of students, faculty, and staff as Dr. Freeman Hrabowski.
And what an incredible run Dr. Hrabowski has had. Founder of the nationally recognized Meyerhoff Scholars Program, named President of UMBC in 1992, named #1 up and coming university in America, whose graduates are pursued by Harvard, Princeton and Yale…
In 2008, US News and World Report named him one of America’s Best Leaders. In 2009, Time Magazine named him one of the Top Ten College Presidents and in 2012 Time Magazine named Dr. Hrabowski one of the top 100 Most Influential People in the World.
We sat down recently- actually we spoke on the phone, as he was in his car, out and about “telling and selling” one of the greatest stories in higher education- UMBC. This is the conversation that followed.
Thank you, Freeman!
Mike Gill
President & Chairman, Evergreen Advisors
Print a Copy of the Interview here – EA Interview Dr Freeman Hrabowski
Entrepreneur Spotlight – Social Toaster
We are starting a new feature that provides a short spotlight on entrepreneurs and companies in our area. For this interview we reached out to Social Toaster to hear how it all started and what advice they would give entrepreneurs starting out today.
Who are your customers?
Good examples of our customers are Media, Entertainment, Music, Publishing, Non-profit and Education. When determining if an organization could be a customer of ours, we ask 2 questions.
1. Do they have an existing fan base, following or database of people they’re connected to who would be willing to share content on behalf of that company to their personal social networks?
2. Is that organization creating content regularly that’s meaningful enough that people will want to share it?
Plasmonix Wins Tech Transfer Award
Congratulations to Plasmonix for winning the Tech Transfer Award at the at 13th Annual Incubator of the Year Awards. Our client, Plasmonix is a life sciences company based at bwtech@UMBC Research & Technology Park.
“Plasmonix is delighted and proud to be selected as a 2013 Maryland Incubator Company of the Year. The competition for this award is stiff and to be selected from the large pool of deserving candidates is truly an honor.” said Bill Gust, CEO of Plasmonix.
Outstanding Maryland Businesses Honored at 13th Annual Incubator of the Year Awards
Kevin Parker June 14, 2013
“The Maryland Incubator Company of the Year Awards honor the level of entrepreneurship achieved within our State’s business incubator network,” said DBED Secretary Dominick Murray. “The companies recognized today are bringing technologies to market, creating jobs and strengthening our State’s economy. Congratulations to this outstanding group of Maryland businesses.”
Valuing a Business – Valuing YOUR Business
Each day, our Business Valuation practice fields inquiries from business owners seeking a valuation of their company. Almost as often, they want to know exactly how we go about determining value.
We typically respond with an explanation of the three traditional approaches to completing a business valuation – Cost, Market, and Income.
CFO Advisory Update – Form I-9
On March 8, U.S. Citizenship and Immigration Services (USCIS) announced a newly revised Employment Eligibility Verification form, Form I-9, which employers are required to use to verify the identity and employment authorization of newly hired employees. Employers should start to use the new Form I-9 immediately. Use of prior versions of the Form I-9 will no longer be permitted beginning May 7, 2013.
What Does This Mean for My Company?
Employers should begin to use the new version of the Form I-9, “(Rev.03/08/13)N,” immediately. USCIS is providing employers with a period of 60 days to make necessary changes to their current Form I-9 protocols.
Trade Shows – Don’t Just Walk the Floor
Starting with the Consumer Electronics Show which just occurred in early January, several major trade shows relevant to emerging growth companies including ITEXPO, NAB (National Association of Broadcasters), Data Center World, Networld + Interop, and CTIA Wireless to name a few, are being held through the Spring. These events are great opportunities for entrepreneurial companies to:
- Identify, meet, and acquire customers;
- Meet with potential business development partners;
- Scope out competition;
- Recognize developing trends;
- Assess your place within your particular industry ecosystem; and
- Pitch investors.
The ability to do all this at one venue within a few days is a fantastic opportunity. That being said, whether you are an exhibitor or an attendee, you want to maximize your investment.
Here are a few things to consider to help you get a return on that investment.
Business Valuations as a Planning Tool
A recent article in the New York Times, “Do You Know What Your Business is Worth? You Should,” reviewed the use of “online valuation calculators” as an inexpensive alternative to providing owners of small companies with a value for their business. These calculators provide formula-based approach to valuation cannot possibly address the subjective nature and “art” of valuations. There are multiple factors to be considered in an “opinion” of value, not the least of which is the purpose of the valuation and numerous subjective factors for which the judgment of an experienced business appraiser is necessary.
However, a more important take-away from this article is the importance of business valuations as a planning tool for the owners of closely-held businesses. As the article observes, most business owners don’t become concerned with a “business valuation” until a transfer of equity is involved, either through the acquisition of the interest of another shareholder — or the business itself. Here are some useful lessons regarding business owners and valuation:
Plasmonix receives InvestMaryland funds
The Department of Business and Economic Development of Maryland announced that Plasmonix Inc., a life sciences company based at bwtech@UMBC Research & Technology Park, received $100,000 from the startup funding initiative.
Plasmonix, based at the UMBC Bio Park, is a nano-materials company focusing on Assay Enhancement Products for the Life Science Industry. “Plasmonix is grateful for the continued support from the Maryland Venture Fund and the Department of Business and Economic Development,” said William Gust, president and CEO of Plasmonix. “These funds are critically important to the ongoing development and commercialization of Plasmonix’s technology and we would not be where we are today without this support. We hope to repay the confidence demonstrated in Plasmonix by adding jobs and growing the company here in Maryland.”
Plasmonix was also recently awardee with a $100,000 MIPS Award (Maryland Industrial Partnership Award). The award is to support ongoing collaboration between CFS (The Center for Fluorescence Spectroscopy at the University of Maryland, Baltimore and Plasmonix to develop and commercialize products utilizing approaches developed by CFS in the area of Metal-Enhanced Fluorescence, Plasmonix’s platform technology. More information regarding the MIPS program can be found at HTTP://WWW.MIPS.UMD.EDU/.
Work on Your Business, Not in It
As the year winds down to a close, have you scheduled time to work on your business and not in it. As the CEO, your daily goal should be figuring out how to run your business and move it forward – not be focused on the minutia of running it daily. The best future exit strategy is a growth strategy today. Yet, the fact is that it’s easier said than done. Here is a very simplistic way of making it a reality starting right now:
Ideas for setting time aside right now:
1. Right now, schedule a half-day offsite for you and your key management team within the next 30 days or;
2. Right now, set up a series of after-the New Year Breakfast meetings on the calendar now with each of your key business area team leads.
Once you have assembled your team you can begin by focusing on the following areas and strategic conversations. They key here is to drive conversation, derive key goals for next year, and commit to key performance indicators that can measure your progress. This is a process and not a one-time event and each idea garnered from these meetings will lead to better ideas and a stronger business overall.
1. Marketing Plan
a. How many new prospects do you want to touch?
b. What market or segment will have the most focus next year?
c. What are a few Key Performance Indicators you can set to measure against?
2. Systemization
a. What systems are in place today? Are they working?
b. More importantly, if they are working is everyone using them?
c. If they are working, look for small improvements and document them.
3. Talent
a. How do you hire more A players
b. How do you plan to retrain or eliminate C players?
c. How are you communicating your expectations and realigning your expectations?
Your business is an asset that you have invested your time and money in developing. By focusing on working on your business and not in it, you can take control of your destiny and drive the value of your asset even higher.
Evergreen Advisors is a leading middle market investment bank and corporate advisory firm focused on assisting companies in the areas of corporate finance, growth and exit strategies, business valuations and CFO advisory services. As entrepreneurs and founders, we have real-world experience of the challenges our clients face and the market experience to assist them in driving value. Give us a call today, we welcome confidential consultations with you regarding your exit strategy.
“The Will to Lead for Clemson”
Clemson University featured Evergreen Advisors’ Mike Gill in this month’s “The Will to Lead for Clemson,” article. Here is an excerpt and link to the article:
Mike Gill came to Clemson from Baltimore in the fall of 1968 on a baseball scholarship, playing under Coach Bill Wilhelm. Today, he and his wife, Mary, support the Brooks Center for the Performing Arts with a generous endowment. Perhaps the connection between baseball and the Brooks Center is not readily apparent, but then Clemson has a way of bringing people and ideas together in unexpected ways.
While playing for the Tigers, Mike got to know Byron Harder, a young doctor working at the Redfern Health Center. Byron was a fan of the baseball team and treated many of its players. Byron was also a fan of Lillian “Mickey” Harder, whom he married and who is now director of the Brooks Center. The friendship that was struck between the Harders and Gill remains today.
Individual “American Recovery” in 2013
Recently, Joseph DeMattos, Jr., MA president of the Health Facilities Association of Maryland (HFAM), interviewed Mike Gill, President and Chairman of Evergreen Advisors on leadership and how Mike stays sharp on a daily basis.
Here is an excerpt from the interview and some self-reflective thoughts as we all start to reflect on 2012 and look forward to 2013.
What are the three things or actions a person could take to launch their own individual “American Recovery” in 2013?
MG: Let me use three of the six of The Big Six, to answer this. Jack Welch introduced us to The Big Six over twenty-five years ago. They are ageless and timeless. I want you to look at them through the eyes of the individual and not an enterprise.
Pathsensors awarded InvestMaryland funding
The Maryland Department of Business and Economic Development invested announced today that they have invested $200K in Pathsensors, an Evergreen CFO Advisory Client. Pathsensors manufactures biological pathogen identification systems focused on environmental testing and is located at the UMB Biopark.
“We are honored to be a recipient of capital funding through InvestMaryland. PathSensors CANARY technology is providing rapid pathogen testing that ensures a safe and reliable supply of food products for the world’s growing population. These funds will support the development of new products for the food processing industry. We thank the State of Maryland, in particular the Maryland Venture Fund, the Department of Business and Economic Development and the Governor, for their support as we work to develop these important products.” stated Ted Olsen.
InvestMaryland is a funding source for early, mid and late stage growth companies. Through a premium insurance tax credit auction sale, the State of Maryland raised $84M to invest in early stage technologies in the areas of software, communications, cyber-security and life sciences.
Evergreen Expands CFO Practice
Evergreen Advisors, a leading Investment Bank and Corporate Advisory Firm, announced the addition of Fred Shaw as Vice President in the CFO Advisory Practice.
Fred has diversified experience in both public and private accounting serving a variety of industries including Manufacturing, Health Care, Service and Government Contracting industries. Prior to joining Evergreen Advisors, he worked with middle market companies at JPB Accounting Service and at KJC Financial Services, Inc., a firm he founded in 2002 to provide CFO services to small and mid-sized companies in the Central Maryland region.
“I’m very excited to welcome Fred Shaw to our team as Vice President in our CFO Advisory Services practice. Fred has an outstanding background in the accounting and financial services industry, having been a partner at KPMG, a CFO at some major companies, and most recently a financial advisory consultant to a number of companies in the mid-Atlantic.” remarked Mike Gill, Chairman.
Plasmonix Awarded MIPS Project
The University of Maryland MIPS Program announced that our client, Plasmonix, has been awarded a MIPs project, which teams companies with universities across the state to focus on advancing commercially promising technologies into the marketplace.
“The MIPS award is a critical component of Plasmonix’s product development and introduction plans. The award is hugely important to the Company’s ability to hit the ground running as we enter 2013.” Says William Gust, President and Chief Executive who has raised $1.5 million for Baltimore-based Plasmonix.
Plasmonix was also selected to present at the upcoming Mid Atlantic Bio Conference on September 27th and 28th.
Get Out of Your Chair
Sitting for More Than Three Hours a Day Cuts Life Expectancy – WSJ.com
In the mid 80’s I read an article in Fortune magazine about Lou Gerstner, Jr. Who at the time was president of American Express. Gerstner eventually went on to become Chairman and CEO of IBM, where he retired in 2002.
In the Fortune magazine article, Gerstner said that his favorite quote was, “From behind the desk is a dangerous place from which to view the world”. I “borrowed” it from Gerstner and have shared with the world ever since.
The article that appeared this week in the WSJ by Andrew Seidman should be the companion piece to the Gerstner quote. I’ve always said that you can’t find out what your competition is doing, how your customers feel about your products and your company, and how your people in the field are doing, when you’re inside the four walls of your company………if that isn’t enough to get you off your derrière, Seidman now tells us we’re “gonna die” the longer we sit.
I guess the “bottom” line, no pun intended is if you get out of your chair you’ll do a better job running your company and live longer! Do It!
Goodwill Hunting
Business owners typically focus on creating sustainable value that would endure even in their absence. After all, a buyer will only pay for the value of an enterprise which can actually be transferred in an acquisition. “Goodwill” is a concept that is often raised when positioning a business for sale, but what does is mean and what are its implications for the sale of your business?
In this context, goodwill is an accounting concept that is generally defined as the value of an acquired business over and above its identifiable tangible and intangible assets. If a business is purchased for $10 million but has identifiable (net) assets of only $7 million, the difference of $3 million would be recorded by the acquirer as goodwill. In an economic sense, goodwill is the value created over and above the identifiable net assets residing in a business enterprise.
In a corporate acquisition, goodwill can be identified as either “personal” or “business” goodwill. The value of goodwill may be attributable to the owners personally, to the company, or to a combination of both. Whereas a cardiology practice is likely to have more personal goodwill, a branded consumer products company would be likely to have more goodwill attributable to the business.
So what’s the difference and why does it matter?
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