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Archive for June, 2020

Terminating/Restructuring Prohibitive Real Estate, License, Payables & Contingent Liabilities – cleaning up the Balance Sheet in these challenging Covad-19 times

Posted in Uncategorized on June 28, 2020| Leave a Comment »

Terminating/Restructuring Prohibitive Real Estate, License, Payables & Contingent Liabilities

Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various balance sheet issues for their technology, life science, medical device, cyber security, solar and cleantech portfolio companies. 

These companies were not necessarily in crisis, but had cash (in some cases significant cash reserves) and/or investor groups that were about to provide additional funding. In order to stabilize their Go-Forward-Plan and maximize cash resources for future growth, there were specific needs to address Balance Sheet and Contingent Liability issues as soon as possible.

Some of these areas where Gerbsman Partners has assisted, these companies have been in the process of termination, restructuring and/or reduction of:

Prohibitive Executory Real Estate Leases, Computer and Hardware-related Leases and Senior/Sub-debt Obligation

Gerbsman Partners was the “innovator” in creating strategies to terminate or restructure prohibitive real estate leases and senior and sub-debt obligations.  To date, we have terminated or restructured $810 million of such obligations for private and public companies, and which has allowed them to return to financial viability.

Accounts/Trade Payable Obligations

Companies in a crisis, turnaround or restructuring situation typically have account and trade payable obligations that become prohibitive for the viability of the company on a go-forward-basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize value based on the reality or practicality of the situation.

Software and Technology-related Licenses

As per the above, software and technology-related licenses need to be restructured/terminated in order for additional capital to be invested in restructured companies. Gerbsman Partners has a significant, successful track record in these areas.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 109 companies in a wide and diverse spectrum of industries. In the process, GP has successfully restructured/terminated over $810 million of real estate executor contracts and equipment lease/sub-debt obligations, and has assisted 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, McLean VA, San Francisco, Orange County, Europe and Israel.

 

 

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Fenwick – Silicon Valley Venture Capital Flash Report – April 20 by Cynthia Clarfield Hess, Mark. A. Leahy, Barry J. Kramer and Khang Tran

Posted in Uncategorized on June 12, 2020| Leave a Comment »

IMG
Silicon Valley Venture Capital Flash Report – April 2020
By Cynthia Clarfield Hess, Mark A. Leahy, Barry J. Kramer and Khang Tran

View the full report.

Background
This survey is a special interim report to highlight changes in the Silicon Valley venture capital environment in light of the COVID-19 pandemic. It focuses on April financing activity and supplements our March Flash Report that looked at financings in the first quarter of 2020.

Please note that when providing data on a monthly basis, and especially when analyzing trends among industries or series on a monthly basis, we are working with smaller numbers than in our quarterly report and accordingly the possibility of statistical anomalies increases.

Key Findings
April valuation changes continued to be weaker than normal, but were mildly stronger than March.

  • The percentage of up-rounds declined modestly from 72% in March to 70% in April, and both were lower than the 83% of financings that were up-rounds in 2019.
  • Interestingly, the number of down-rounds also declined, from 16% in March to 12% in April, although both were higher than the 8% down-rounds in 2019.
  • Accordingly, the percentage of flat rounds increased, to 18%, compared to 13% in March and 9% in 2019. This increase in flat rounds may be a signal that there were more rounds led by insiders.
  • The Fenwick & West Venture Capital BarometerTM showed an average price increase of 60% in April from 42% in March, both below the 2019 average of 93%. The median price increase increased slightly, from 26% in March to 30% in April, again below the 60% median price increase seen in 2019.
  • Internet/new media and software were by far the strongest industries from a valuation increase perspective, with hardware showing the worst results.

Deal volume increased, and was consistent with 2019 monthly results. 

  • The number of deals increased from 54 in March to 64 in April. The average number of monthly deals in 2019 was 65.

Late-stage deals percentage increased.

  • The percentage of Series D and E+ deals increased to 38% of all financings in April, an increase from 21% in March and the highest since August 2018 when Series D/E+ deals combined for 42% of all financings. That said, the average price increase for late-stage financings was only 26%, compared to 35% in March and 59% in 2019.

Life sciences deal volume stayed strong.

  • The percentage of life sciences deals continued high at 25% of all financings, compared to 28% in March. During 2019 the percentage of life sciences deals was 14%.
Full Report

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Terminating/Restructuring Prohibitive Real Estate, License, Payables & Contingent Liabilities in these challenging Covad times

Posted in Uncategorized, tagged , on June 4, 2020| Leave a Comment »

Terminating/Restructuring Prohibitive Real Estate, License, Payables & Contingent Liabilities

 

Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various balance sheet issues for their technology, life science, medical device, cyber security, solar, cleantech, etc. portfolio companies. 

These companies were not necessarily in crisis, but had cash (in some cases significant cash reserves) and/or investor groups that were about to provide additional funding. In order to stabilize their Go-Forward-Plan and maximize cash resources for future growth, there were specific needs to address Balance Sheet and Contingent Liability issues as soon as possible.

Some of these areas where Gerbsman Partners has assisted, these companies have been in the process of termination, restructuring and/or reduction of:

Prohibitive Executory Real Estate Leases, Computer and Hardware-related Leases and Senior/Sub-debt Obligations

 Gerbsman Partners was the “innovator” in creating strategies to terminate or restructure prohibitive real estate leases and senior and sub-debt obligations.

To date, we have terminated or restructured $810 million of such obligations for private and public companies, and which has allowed them to return to financial viability.

Accounts/Trade Payable Obligations

Companies in a crisis, turnaround or restructuring situation typically have account and trade payable obligations that become prohibitive for the viability of the company on a go-forward-basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize value based on the reality or practicality of the situation.

Software and Technology-related Licenses

 As per the above, software and technology-related licenses need to be restructured/terminated in order for additional capital to be invested in restructured companies. Gerbsman Partners has a significant, successful track record in these areas.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 109 companies in a wide and diverse spectrum of industries. In the process, GP has successfully restructured/terminated over $810 million of real estate executor contracts and equipment lease/sub-debt obligations, and has assisted 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, McLean VA, San Francisco, Orange County, Europe and Israel.

 

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June 2020 – Visualizing Layoffs at Prominent Startups Triggered by COVID-19 by Dorothy Neufeld – Visual Capitalist

Posted in Uncategorized on June 3, 2020| Leave a Comment »

Visualizing Layoffs at Prominent Startups Triggered by COVID-19 by Dorothy Neufeld – Visual Capitalist

Layoffs at Prominent Startups Triggered by COVID-19

As the pandemic reverberates through almost every industry imaginable, tech startups are also feeling the pain.

Since mid-March, countless startups and unicorns have undergone layoffs.

Today’s infographic pulls data from Layoffs.fyi, and navigates the cascading layoffs across 30 of the most recognizable startups in America. Each of the companies have slashed over 250 employees between March 11 and May 26, 2020—capturing a snapshot of the continuing fallout of COVID-19.

Silicon Valley Takes a Hit

Unsurprisingly, many of the hardest hit startups are related to the travel and mobility industry.

Closing 45 offices, Uber has laid off 6,700 employees since mid-March. Uber CEO Dara Khosrowshahi, who was granted a $45M earnings package in 2018, announced he will also waive his $1M base salary for the remainder of the year.

*Layoffs reported between March 11-May 26, 2020

Meanwhile, as room bookings dropped by over 40% across several countries, Airbnb laid off a quarter of its workforce. The tech darling is anticipating a $2.4B revenue shortfall in 2020.

Like many other big names—including Lyft, Uber, and WeWork—Airbnb is struggling to achieve profitability. In the first nine months of 2019, it lost $322M at the height of the market cycle.

Until 2021, gig-economy revenues are projected to drop by at least 30%.

International Startups Struggling

Startups in the U.S. aren’t the only ones scrambling to conserve cash and cut costs.

Brazil-based unicorn Stone has let go of 20% of its workforce. The rapidly growing digital payments company includes Warren Buffett as a major stakeholder, holding an 8% share as of March 2020.

At the same time, India-based ride-hailing Ola has witnessed revenue declines of 95% since mid-March. It laid off 1,400 employees as bookings drastically declined.

Similarly, Uber India has rivaled Ola in dominance across India’s $10B ride-hailing market since launching three years after Ola, in 2013. Now, almost 25% of the Uber India workforce have been laid off.

Of course, these reports do not fully take into account the growing impact of COVID-19, but help paint a picture as the cracks emerge.

Pandemic-Proof?

While the job market remains murky, what startups are looking to hire?

Coursera, an online education startup, listed 60 openings in May. By the end of the year, the company plans to hire 250 additional staff. Within the peak of widespread global lockdowns, the platform attracted 10M new users.

Meanwhile, Canva, an Australia-based graphic design unicorn, is seeking to fill 100 positions worldwide. In partnership with Google for Education, Canva offers project-based learning tools designed for classrooms, in addition to free graphic design resources.

At the same time, tech heavyweights Facebook and Amazon reported openings. Booming startups such as Plaid, Zoom, and Pinterest are also listing new positions as shifting consumer demand continues to shape unpredictable and historic hiring markets.

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June 2020 Visualizing Layoffs at Prominent Startups Triggered by COVID-19 by Dorothy Neufeld – Visual Capitalist

Posted in Uncategorized, tagged , , on June 2, 2020| Leave a Comment »

Visualizing Layoffs at Prominent Startups Triggered by COVID-19 by Dorothy Neufeld – Visual Capitalist

Layoffs at Prominent Startups Triggered by COVID-19

As the pandemic reverberates through almost every industry imaginable, tech startups are also feeling the pain.

Since mid-March, countless startups and unicorns have undergone layoffs.

Today’s infographic pulls data from Layoffs.fyi, and navigates the cascading layoffs across 30 of the most recognizable startups in America. Each of the companies have slashed over 250 employees between March 11 and May 26, 2020—capturing a snapshot of the continuing fallout of COVID-19.

Silicon Valley Takes a Hit

Unsurprisingly, many of the hardest hit startups are related to the travel and mobility industry.

Closing 45 offices, Uber has laid off 6,700 employees since mid-March. Uber CEO Dara Khosrowshahi, who was granted a $45M earnings package in 2018, announced he will also waive his $1M base salary for the remainder of the year.

*Layoffs reported between March 11-May 26, 2020

Meanwhile, as room bookings dropped by over 40% across several countries, Airbnb laid off a quarter of its workforce. The tech darling is anticipating a $2.4B revenue shortfall in 2020.

Like many other big names—including Lyft, Uber, and WeWork—Airbnb is struggling to achieve profitability. In the first nine months of 2019, it lost $322M at the height of the market cycle.

Until 2021, gig-economy revenues are projected to drop by at least 30%.

International Startups Struggling

Startups in the U.S. aren’t the only ones scrambling to conserve cash and cut costs.

Brazil-based unicorn Stone has let go of 20% of its workforce. The rapidly growing digital payments company includes Warren Buffett as a major stakeholder, holding an 8% share as of March 2020.

At the same time, India-based ride-hailing Ola has witnessed revenue declines of 95% since mid-March. It laid off 1,400 employees as bookings drastically declined.

Similarly, Uber India has rivaled Ola in dominance across India’s $10B ride-hailing market since launching three years after Ola, in 2013. Now, almost 25% of the Uber India workforce have been laid off.

Of course, these reports do not fully take into account the growing impact of COVID-19, but help paint a picture as the cracks emerge.

Pandemic-Proof?

While the job market remains murky, what startups are looking to hire?

Coursera, an online education startup, listed 60 openings in May. By the end of the year, the company plans to hire 250 additional staff. Within the peak of widespread global lockdowns, the platform attracted 10M new users.

Meanwhile, Canva, an Australia-based graphic design unicorn, is seeking to fill 100 positions worldwide. In partnership with Google for Education, Canva offers project-based learning tools designed for classrooms, in addition to free graphic design resources.

At the same time, tech heavyweights Facebook and Amazon reported openings. Booming startups such as Plaid, Zoom, and Pinterest are also listing new positions as shifting consumer demand continues to shape unpredictable and historic hiring markets.

Read Full Post »