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“Portfolio Advisory Services for Equity and Senior Lenders” from Gerbsman Partners by Steven R. Gerbsman

January 6, 2016 by Steven R. Gerbsman

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“Portfolio Advisory Services for Equity and Senior Lenders” from Gerbsman Partners
by Steven R. Gerbsman

San Francisco, January, 2016

I have attached for your information and review an updated presentation “Portfolio Advisory Services for Equity & Senior Lenders” from Gerbsman Partners. Also, below is a video taped presentation on “Corporate Governance”, “Early Warning Signs” and “Maximizing Value” for under-performing/distressed venture backed Intellectual Property companies that I presented at Stanford University. This video will be used in the Stanford Engineering School via STVP (Stanford Technology Ventures Program) and SCPD (Stanford Center for Professional Development).

Aside from Gerbsman Partners core business of maximizing value utilizing its proprietary “Date Certain M&A Process”, Gerbsman Partners has been assisting equity and senior lenders “Identifying the Early Warning Signs & Maximizing Value for Underperforming and Distressed Portfolio companies”.

Gerbsman Partners has been engaged by numerous equity groups and senior lenders to perform a “business audit” and provide observations, recommendations and an action plan for maximizing value. Typically this is a 1-2 day on site review at the portfolio company and a written and in person review with equity or the senior lender. If Gerbsman Partners is retained to perform Crisis Management and/or “Date Certain M&A” services for the portfolio company, Gerbsman Partners will credit 50% of the business audit’s fee’s to any future engagement.

By background, since 2001, Gerbsman Partners has focused and been involved in maximizing enterprise and Intellectual Property value for 91 venture capital/private equity backed and /or senior lender financed, technology (software, mobile, telecom, optical networking, internet, digital commerce, cyber-security, etc.), life science, medical device, solar, fuel cell and low tech companies through Gerbsman Partners proprietary “Date Certain M&A Process”. Gerbsman Partners has also terminated/restructured over $ 810 million of prohibitive real estate and equipment leases, sub-debt and creditor issues. Gerbsman Partners also assists US, European and Israeli technology, digital marketing, and medical device companies with strategic alliance development, M&A and licensing and distribution of proprietary content.

Gerbsman Partners has offices and strategic alliances in San Francisco, Orange County, McLean, VA, New York City, Boston, Europe and Israel.

Identifying Early Warning Signs & Maximizing Value of Distressed Portfolio Companies – Presentation at Stanford University by Mr. Steven Gerbsman.

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Please visit the attached link to view the program. Click here
I also was the moderator for a panel on the same subject that consisted of Marc Cadieux, Chief Credit Officer of Silicon Valley Bank, Peter Gilhuly, Esq., Partner at Latham & Watkins and Michael Scissions, Entrepreneur/CEO and former head of Facebook Canada.
Please review and hopefully the information will assist in “Identifying the Early Warning Signs” and provide “food for thought”.

GERBSMAN PARTNERS 415 456 0628
Email: steve@gerbsmanpartners.com
Web: www.gerbsmanpartners.com
BLOG of Intellectual Capital: blog.gerbsmanpartners.com

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Twelve ways to live like a Navy SEAL in 2016 by Chris Sajnog – FoxNews.com

January 4, 2016 by Steven R. Gerbsman

Twelve ways to live like a Navy SEAL in 2016

Chris Sajnog

By

Published December 31, 2015

U.S. Navy SEAL Team 18 members react in recognition of contributions of former SEALS after a demonstration of combat skills at the National Navy UDT-SEAL Museum in Fort Pierce, Florida.

U.S. Navy SEAL Team 18 members react in recognition of contributions of former SEALS after a demonstration of combat skills at the National Navy UDT-SEAL Museum in Fort Pierce, Florida. (REUTERS/Joe Skipper)

Throughout the ages, every great society has celebrated and revered great warrior traditions.

We can look back to the Spartans, Vikings, Samurai, or Aztecs, and find that strong warrior classes coincided with strong nations. However, our society is beginning to shun warriors and lower them on the social ladder.

Warfare has moved away from the martial arts style of combat and towards a more mechanical, detached system. This has changed society’s view of warriors and paved the way toward a society that now teaches our boys to be less masculine.

Too many people think that we can flip a magical switch to activate our warriors and protect our way of life. Then, when the war is over, we turn off the switch and our warriors go back to eating tofu and playing with dolls.

Being a warrior is a full-time job — a way of life that must be trained and tested so we are ready for our enemies’ surprise attacks.

“Warrior” is a recognized role that has played a vital part in every great society. We must continue to embrace and support our warriors if we are to continue being the greatest nation on earth. So stand up with me as we review the traits you’ll need to join the warrior class and live life like a Navy SEAL.

1. Confident — A warrior is sure of himself and has no uncertainty about his own abilities.

2. Decisive — Displaying no hesitation in battle is vital to survival.

3. Strong — You need to have a determined will in all that you do. A strong mind can make up for a weak body, but not the other way around.

4. Skillful — Having the right mindset is vital, but you need a skill set to match.

5. Active — You need to be moving, doing, or functioning at all times. Ideas and theories are great, but action gets things done.

6. Aggressive — Being forceful, bold, and energetic — not a pit bull with a bad owner.

7. Disciplined — Once you have a plan and are confident that you can fulfill it, you must have the discipline required to stick with it.

8. Vigilant — You never know when danger is going to come knocking, and you need to be prepared to react appropriately.

9. Patient — Having patience means bearing pains or trials calmly or without complaint.

10. Brave — Brave doesn’t mean you aren’t afraid. It means YOU ARE, but you continue in spite of your fears.

11. Loyal — A warrior needs direction, and that comes from being faithful to a cause, ideal or institution. Loyalty will keep you guided along your path.

12. Loving — A warrior has confronted death and understands the value of life. Warriors whose lives are in balance are peaceful, unselfish and compassionate of others. The love of family gives the warrior his energy to constantly train for battle and the strength to survive once he’s there.

Like yin and yang, warrior traits have two sides. If your life is unbalanced, the dark side will be the stronger force and your actions will demonstrate this fact.

Not being well rounded is the quickest way to become unbalanced. We see this with religious extremists who concentrate so much on loyalty to their religion that they completely neglect things like patience and love.

Suppression of a warrior’s God-given drive will also slowly lead to an imbalance and manifest itself in negative ways. Telling boys it’s wrong to fight is like telling a bird it’s wrong to fly. It will lead to unwanted consequences down the road.

Let’s face it. Many men are less manly than they should be. Professionals tell us it’s OK, and we should eliminate all gender indicators in a quest for equality, but equal does not mean the same.

Luckily, there are a few things you can do to avoid that androgynous nonsense and join the warrior class:

· Have a set of NUTs (Non-negotiable, Unalterable Terms) and live by them!  These are anything you’re not willing to compromise in life, period.

· Start practicing some form of martial arts — if you’ve never been hit in the face, go find out what it’s like.

· Meditate. It’s one of the most important things you can do for your mind and body.

· Find something you’re afraid of and go do it. Everyone has fears — warriors overcome them.

· Work out. It doesn’t matter what you do. Breathe hard and sweat.

· Embrace competition. Sign up for a race, a fight or just challenge someone to arm wrestle. Prove that you’re better than someone else at something or work until you are.

· Start establishing routines and habits in everything you do. We are what we repeatedly do.

· Write down your goals and core values. If you don’t have a map for your life, how will you get where you want to go?

· Become a master at everything you do. Everything in life is either worth doing well or it’s not worth doing at all.

Chris Sajnog is a retired U.S. Navy SEAL Master Firearms Instructor and a Neural-Pathway Training Expert. He is the author of “Navy SEAL Shooting” and “How to Shoot Like a Navy SEAL.”

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Cybersecurity ROI: 3 questions to ask about data by Brett Williams, Maj Gen USAF (Ret) – IronNet Cybersecurity, Inc.

January 2, 2016 by Steven R. Gerbsman

Cybersecurity Executive and Professional Speaker; President, Operations and Training, IronNet Cybersecurity Inc.

Cybersecurity ROI: 3 questions to ask about data

Measuring return on investment (ROI) for cybersecurity spending is notoriously difficult.  If you don’t get hacked, it is hard to prove the resources you invested prevented something from happening.  And you have to keep in mind that in cybersecurity resources are not just the dollars.  Money, time and people are all limited resources when securing your digital crown jewels.

So you have to find areas where you are confident that investment does materially lower your risk.  A good place for C-Suites and Directors to start is by investing in answering these three questions about your critical data:  What is it?  Where is it?  Who has access to it?

1.  What is our critical data?  What data if stolen, destroyed, exposed to the public or manipulated would have a strategic impact on the business?  It might be your business strategy, it might be your customer data base, it might be the details of your next M&A, or it might just be your emails on what you think about Angelina Jolie.  Saying all of the data is critical is a cop out.  You cannot and should not protect it all at the same level.  Figure out what the crown jewels are and focus there.  While you are at it, look at all the data you are collecting and storing.  Do you really need everything you are collecting and how long do you really need to keep it?  It is easy and cheap to store data, but the more data you have the bigger your attack surface is to the hacker.

2.  Where is our critical data?   “In the cloud” is not a sufficiently detailed answer.  Find out where the data is and I guarantee you there is more than one copy and it is in more than one location.  There is an appropriate balance between redundancy, resiliency and security.  You obviously need backups for a variety of cyber and non-cyber attack contingencies, but every copy has to be kept current and it has to be secured.  Invest in attaining a balance that meets your company’s risk appetite and tolerance.

3.  Who has access to our critical data?  Which humans, by name, can access the data?  Are they the right humans?  Do they really need access to all of the data? Are there humans on the list who have changed jobs in the company or retired three years ago?  You have to control access to the data.  It is resource intensive to understand and control access to the data, but it is foundational to security. Access control is necessary to identify if an outsider has gained access by stealing a legitimate user’s credentials or if a malicious insider is misusing their privileges.

Many companies cannot answer these three questions with any degree of confidence, so make sure yours can.  And then, if you don’t like the answers, work with your CIO and CISO to figure out where to invest time, people and money to lower the risk to your digital crown jewels.

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Gerbsman Partners New Years Wishes

December 31, 2015 by Steven R. Gerbsman

As we enter 2016 may you and your family

  1.  be healthy
  2.  be safe
  3.  enjoy family
  4.  live life for the integrity of your name, the love of your family and hope for the future

Please never forget those who served to make this country free and that the Judeo/Christian values of our forefathers brought forth a new nation, conceived in liberty and justice for all.

With best regards for a prosperous 2016

Steve

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Naked Unicorns in Subprime Valley by Vikram Mansharamani

December 28, 2015 by Steven R. Gerbsman

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Naked Unicorns in Subprime Valley – by Vikram Mansharamani

The signs of a tech bubble are plain to see. But Silicon Valley doesn’t want to admit it—and average investors are at risk.

Shortly after the late 1990s technology bubble burst, many cars in Northern California sported a bumper sticker pleading, “Please, God, just one more bubble!”

Those prayers have been answered. The signs of a new tech bubble are everywhere: Easy money, widespread exuberance, hidden leverage and mass participation by amateur investors. Many believe it’s different this time, insisting that valuations are reasonable and that Tech 2.0 companies have real business plans that will generate real profits.

How did we get here? Broader economic forces are one reason. With interest rates at unprecedented lows even after the Fed’s recent hike, many investors have been forced to take on extra risk to generate returns. Fast-growing tech companies offer the prospect of tremendous rewards. “It only takes one,” the venture capital guys say. The collective valuation of the 142 unicorns is around $500 billion.

Another phenomenon, the involvement of large mutual funds in private investments, is a contributor. T. Rowe Price, Blackrock, Fidelity, and Wellington–four firms that offer open-ended investment products with daily liquidity–have pumped significant amounts of capital into late-stage private tech firms. Two thirds of unicorns—companies valued at $1 billion or more—have a mutual fund, hedge fund or bank as a major investor.

But as the music stops, retail mutual fund investors may find hard-to-value illiquid assets getting rapidly marked down, possibly forcing indiscriminate selling of allegedly “safe” assets. As Warren Buffett put it, “It’s only when the tide goes out that you can see who’s been swimming naked.” Recent reluctance to go public and valuation markdowns suggest we’ve reached high tide—and we’re about to discover who’s most exposed.

Recent reluctance to go public and valuation markdowns suggest we’ve reached high tide—and we’re about to discover who’s most exposed.
For investors frustrated with the challenge of generating returns in today’s climate, the hopes offered by opaque private markets are more appealing than the reality presented by transparent public ones. Just consider two firms that operate in cloud storage: Box and Dropbox. Dropbox is private; Box is listed on the New York Stock Exchange. For no obvious reason, Dropbox garners a significant premium compared to its public peer. T. Rowe Price and BlackRock invested in Dropbox at a $10 billion valuation. But if it traded at the same revenue multiple as Box, the company would be worth $3 billion. What’s the difference? When reality isn’t sexy, investors throw money at potential.

Over the summer, BlackRock marked down its valuation of Dropbox by 24 percent. Then, this fall, Fidelity marked it down as well, along with its stake in Snapchat by 25 percent and its stake in Zenefits, a maker of online human resources software, by 48 percent. More recently, Fidelity marked up its stake in these three companies, but not enough to recover the losses of recent months, highlighting the radical uncertainty surrounding such valuations. Moreover, following its IPO, Square was trading around $12 per share, well below the $15.46 investors paid in the last private round in October. Gilt Groupe, once valued at over $1 billion, is now trying to sell itself for about a quarter of that. Valuation volatility is rightly leading many to question how many unicorns are overvalued.

And consider the over-the-top confidence of the Valley’s employees. They’re commanding ever increasing wages, with reports of $500,000 annual pay packages offered to recent college graduates. Interns are making $7,000+ per month. Expectations for such sky-high pay have become both inevitable and unsustainable; they’re reminiscent of the $1 million pay packages promised Wall Street associates in 1999. By 2000, once the party had ended, annual bonuses were being replaced by pink slips.

Financiers are so convinced that the good times are here to stay that they’ve begun lending money against overpriced and illiquid private stock or employee options. Paper-rich but cash-poor employees are borrowing money they can’t repay without a company sale, from specialist funds that have arisen for just this purpose—and even from banks. In effect, the “cash buyer” of a multi-million dollar property in San Francisco may actually be using 100% borrowed money.

So, let’s get this straight: Higher valuations drive higher incomes that drive higher housing prices using lots of leverage. Seems fair to assume that lower valuations will drive lower incomes and lower housing prices…with, uh-oh, under-collateralized loans. The dominoes are lining up.

One of the telltale signs the end of a bubble is near is popular obsession with get-rich-quick investing opportunities. Back in 1999, taxicab drivers were doling out stock tips. And because that was a bubble in publicly-traded stocks, and online brokerages made investing accessible to all, E*Trade and Schwab were opening accounts at dizzying rates. Today’s equivalents are the crowdfunding campaigns allowing companies to raise equity from Joe and Jane Sixpack, which were made possible by the 2012 JOBS Act. Since September 2013, investors have used crowdfunding platforms to pump more than $700 million into over 1,700 private companies.

The dominoes are lining up.

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As with any proper bubble, there are rationalizations galore. Of course, it’s different this time—it always is. Uber is attempting to disrupt the entire global transportation system. Airbnb is permanently changing the way people procure temporary housing. And both companies are unlocking the productive potential of otherwise stranded capital in depreciating assets. Why have your car sit idle or your apartment empty when either (or both) can generate a return?

All of that may be true. But what happens when competitors enter the market and, say, do away with surge pricing? Or taxis respond with apps of their own, as they have in New York? Or states and countries start regulating Uber and Airbnb? Or the notoriously fickle millenials get bored of the platform and move on to the new new thing?

There’s no doubt that today’s resurgence of tech start-ups will generate world-changing companies. But with all the unicorns roaming in subprime valley, the fantasy grows more obvious by the day. As with all good fantasies, it’s easy to lose yourself in the story. But the story’s almost over.
Vikram Mansharamani, PhD, is a Lecturer at Yale University in the Program on Ethics, Politics, & Economics and the author of Boombustology: Spotting Financial Bubbles Before They Burst (Wiley, 2011). Follow him on twitter @mansharamani.

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