Posted in Uncategorized, tagged apple, Business Insider, iPhone 6, Lisa Eadicicco on July 10, 2014| Leave a Comment »
The next iPhone is likely only a few months away, and reports and rumors about the new device are spreading like crazy.
We’ve combed the web for leaked photos, rumors, and gossip, and rounded them all up here in one place.
Posted in Uncategorized, tagged Gerbsman Partners, Intellectual Property, Maximizing Value of Assets and Intellectual Property, steven r gerbsman, The Advantages of a “Date-Certain” Mergers and Acquisition Process Over a “Standard Mergers and Acquisitions Process” on July 8, 2014| Leave a Comment »
The Advantages of a “Date-Certain” Mergers and Acquisition Process Over a “Standard Mergers and Acquisitions Process”
Every venture capital investor hopes that all of his investments will succeed. The reality is that a large percentage of all venture investments must be shut down. In extreme cases, such a shut down will take the form of a formal bankruptcy or an assignment for the benefit of creditors. In most cases, however, the investment falls into the category of “living dead”, i.e. companies that are not complete failures but that are not self-sustaining and whose prospects do not justify continued investment. Almost never do investors shut down such a “living dead” company quickly.
Most hope against hope that things will change. Once reality sets in, most investors hire an investment banker to sell such a company through a standard mergers and acquisition process – seldom with good results. Often, such a process requires some four to six months, burns up all the remaining cash in the company and leads to a formal bankruptcy or assignment for the benefit of creditors. In many instances, there are a complete lack of bidders, despite the existence of real value in the company being sold.
The first reason for this sad result is a fundamental misunderstanding of buyer psychology. In general, buyers act quickly and pay the highest price only when forced to by competitive pressure. The highest probability buyers are those who are already familiar with the company being sold, i.e. competitors, existing investors, customers and vendors. Such buyers either already know of the company’s weakness or quickly understand it as soon as they see the seller¥s financials. Once the sales process starts, the seller is very much a wasting asset both financially and organizationally. Potential buyers quickly divide the company’s burn rate into its existing cash balance to see how much time it has left. Employees, customers and vendors grow nervous and begin to disengage. Unless compelled to act, potential buyers simply draw out the process and either submit a low-ball offer when the company is out of cash or try to pick up key employees and customers at no cost when the company shuts down.
The second reason for this sad result is a misunderstanding of the psychology and methods of investment bankers. Most investment bankers do best at selling “hot” companies, i.e. where the company’s value is perceived by buyers to be increasing quickly over time and where there are multiple bidders. They tend to be most motivated and work hardest in such situations because the transaction sizes (i.e. commissions) tend to be large, because the publicity brings in more assignments and because such situations are more simply more fun. They also tend to be most effective in maximizing value in such situations, as they are good at using time to their advantage, pitting multiple buyers against each other and setting very high expectations. In a situation where “time is not your friend”, the actions of a standard investment banker frequently make a bad situation far worse. First, since transaction sizes tend to be much smaller, an investment banker will assign his “B” team to the deal and will only have such team spend enough time on the deal to see if it can be closed easily. Second, playing out the process works against the seller. Third, trying to pit multiple buyers against each other and setting unrealistically high valuation expectations tends to drive away potential buyers, who often know far more about the real situation of the seller than does the investment banker.
“Date Certain” M&A Process
The solution in a situation where “time is not your friend” is a “date-certain” mergers and acquisitions process. With a date-certain M&A process, the company’s board of directors hires a crisis management/ private investment banking firm (“advisor”) to wind down business operations in an orderly fashion and maximize value of the IP and tangible assets. The advisor works with the board and corporate management to:
1. Focus on the control, preservation and forecasting of CASH;
2. Develop a strategy/action plan and presentation to maximize value of the assets. Including drafting sales materials, preparing information due diligence war-room, assembling a list of all possible interested buyers for the IP and assets of the company and identifying and retaining key employees on a go-forward basis;
3. Stabilize and provide leadership, motivation and morale to all employees;
4. Communicate with the Board of Directors, senior management, senior lender, creditors, vendors and all stakeholders in interest.
The company’s attorney prepares very simple “as is, where is” asset-sale documents. (“as is, where is- no reps or warranties” agreements is very important as the board of directors, officers and investors typically do not want any additional exposure on the deal). The advisor then contacts and follows-up systematically with all potentially interested parties (to include customers, competitors, strategic partners, vendors and a proprietary distribution list of equity investors) and coordinates their interactions with company personnel, including arranging on-site visits. Typical terms for a date certain M&A asset sale include no representations and warranties, a sales date typically two to four weeks from the point that sale materials are ready for distribution (based on available CASH), a significant cash deposit in the $100,000 range to bid and a strong preference for cash consideration and the ability to close the deal in 7 business days.
Date certain M&A terms can be varied to suit needs unique to a given situation or corporation. For example, the board of directors may choose not to accept any bid or to allow parties to re-bid if there are multiple competitive bids and/or to accept an early bid. The typical workflow timeline, from hiring an advisor to transaction close and receipt of consideration is four to six weeks, although such timing may be extended if circumstances warrant. Once the consideration is received, the restructuring/insolvency attorney then distributes the consideration to creditors and shareholders (if there is sufficient consideration to satisfy creditors) and takes all necessary steps to wind down the remaining corporate shell, typically with the CFO, including issuing W-2 and 1099 forms, filing final tax returns, shutting down a 401K program and dissolving the corporation etc.
The advantages of this approach include the following:
Speed – The entire process for a date certain M&A process can be concluded in 3 to 6 weeks. Creditors and investors receive their money quickly. The negative public relations impact on investors and board members of a drawn-out process is eliminated. If circumstances require, this timeline can be reduced to as little as two weeks, although a highly abbreviated response time will often impact the final value received during the asset auction.
Reduced Cash Requirements – Given the date certain M&A process compressed turnaround time, there is a significantly reduced requirement for investors to provide cash to support the company during such a process.
Value Maximized – A company in wind-down mode is a rapidly depreciating asset, with management, technical team, customer and creditor relations increasingly strained by fear, uncertainty and doubt. A quick process minimizes this strain and preserves enterprise value. In addition, the fact that an auction will occur on a specified date usually brings all truly interested and qualified parties to the table and quickly flushes out the tire-kickers. In our experience, this process tends to maximize the final value received.
Cost – Advisor fees consist of a retainer plus 10% or an agreed percentage of the sale proceeds. Legal fees are also minimized by the extremely simple deal terms. Fees, therefore, do not consume the entire value received for corporate assets.
Control – At all times, the board of directors retains complete control over the process. For example, the board of directors can modify the auction terms or even discontinue the auction at any point, thus preserving all options for as long as possible.
Public Relations – As the sale process is private, there is no public disclosure. Once closed, the transaction can be portrayed as a sale of the company with all sales terms kept confidential. Thus, for investors, the company can be listed in their portfolio as sold, not as having gone out of business.
Clean Exit – Once the auction is closed and the consideration is received and distributed, the advisor takes all remaining steps to effect an orderly shut-down of the remaining corporate entity. To this end the insolvency counsel then takes the lead on all orderly shutdown items.
About Gerbsman Partners
Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. Since 2001, Gerbsman Partners has been involved in maximizing value for 69 Technology, Life Science and Medical Device companies and their Intellectual Property, through its proprietary “Date Certain M&A Process” and has restructured/terminated over $800 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M&A transactions.
Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington, DC, Alexandria, VA, San Francisco, Orange County, Europe and Israel. For additional information please visit http://www.gerbsmanpartners.com or Gerbsman Partners blog.
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Email: steve@gerbsmanpartners.com
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Posted in Uncategorized, tagged GoAbroad.com, Internet Abroad, Sara Brooks on July 7, 2014| Leave a Comment »
It’s that time of year again when many of us are planning our vacations. And although a few travelers may be dreaming of getting “away from the things of man” (as Meg Ryan’s character Patricia Graynamore spoke longingly of in the 1990 movie, “Joe Versus the Volcano”), others want to stay as connected to the Internet as possible, while on holiday.
An alternative is to use the replacement SIM in an older smartphone that you don’t regularly use anymore. It can be your “travel phone.” Another option: purchase a cheap phone with an Internet browser. Even though your Internet access will be limited to your phone, it’s much better than no access at all. You might also be able to arrange a fixed data plan with your carrier just for traveling, but keep in mind that overages can be costly. Check with your carrier to see which options are available and which will work best for you.
2. Purchase a Mobile Broadband Access Plan
Many countries now offer prepaid mobile Internet plans that require neither a permanent address nor a contract. The plan typically includes a USB modem. This is not a viable choice everywhere but it might work for you, particularly if you will be spending your time in an urban area with an adequate number of signal towers. Be sure you let the service provider know exactly where you will be traveling so you can verify coverage.
3. Explore Your Options on Planes, Boats, and Trains
It’s getting easier to stay connected while you’re on the move from place to place, but there are still a few bumps in the road (or in the air). The rules and regulations regarding use of mobile devices on aircraft are constantly shifting, with polices differing by country and even by airline. But many airlines, as well as cruise ship and passenger train lines, offer WiFi. On cruise ships, however, the costs may be prohibitive. Always check ahead to see what is available. There may come a point where you just need to disconnect for a while and enjoy the ride. And there’s nothing wrong with that. You can catch up on your Internet activities later.
4. Internet Cafes To the Rescue
No, that’s not a throwback to the 1990s; these are still a viable option. Even in our super-connected world, not all countries have widespread free WiFi access. In some places it can be very difficult to find WiFi in public places. At an Internet cafe you can pay an hourly fee to use one of their computers, and some offer wireless access if you want to use your laptop or other device.
5. Find a Good Hotel or Hostel with Internet
Hotels or hostels that offer good Internet service can be a saving grace. When traveling abroad, check each hotel’s web site or call to find out what their connectivity options are. If you’re traveling with a laptop, ask questions about their wireless router. If they only have one, ask if you can get a room as close as possible to the router so your receive the optimal signal. Many hotels and hostels also maintain public computers or business centers, which serve travelers aptly.
It’s important to keep up with technology, as new devices and apps are continually being introduced to make connectivity easier. There will be factors beyond your control, like local laws and regulations limiting access to the Web (think China and Egypt). They may put a little kink in your plans, but a little research and prep work can keep you connected just about anywhere on Earth.
Sarah Brooks Sarah Brooks is a Houston based freelance writer and a full-time blogger working with Freepeoplesearch.org. She loves to write about anything related to Social Media, Blogging, Job Searching, and Technology. Sarah also enjoys traveling to new places and exploring the lifestyles of people of other communities. In her spare time, she takes pleasure in square-foot gardening, swimming, and avoiding her laptop.Posted in Uncategorized, tagged Happy Fourth of July on July 3, 2014| Leave a Comment »
Even though this is a commercial, I couldn’t think of any better message on this fourth of July……
This is a great 1-minute commercial. Not a word spoken………
and none needed.
please click on below
<http://www.youtube.com/embed/uoABty_zE00?rel=0>
Happy fourth of July – with Honor, Respect and a Thank YOU for those who served
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