Goldilocks | Fits Just Right

The Goldilocks Syndrome – Fits Just Right?

By Rudi Scheiber-Kurtz, CEO of Next Stage Solutions, Inc. – 617-449-7728

Maybe the business model at Next Stage Solutions (NSS) I pioneered in 2007 has been too early, I don’t think too late, but I am hoping it fits just right for your needs today!!

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The knowledge economy demands simple solutions to complex problems.  As a team of executives at NSS we are upending the traditional models of consultants and temporary workers.

Today’s lean management team wants to cap their costs, keep agile and are in continuous improvement mode.  Having the ability to change on a dime, you need a faster, lower-risk and flexible talent model that gives you a competitive advantage.  I am not talking about administrative temp work, I am talking about senior level professionals who bring a specific expertise to you when you need it.

With small and midmarket companies in mind, I created a talent model for your needs.  It is my hope that we are part of a micro trend in how to access high-level expertise on-demand and prove our effectiveness is palpable to having skin in the game.

Our niche market is where finance, operations and strategy converge.  Your executive team will go through ebbs and flows, in fact your business will too, so accessing professional talent when needed and as a variable cost, expands your boundaries of success.

This type of independent talent is a bit of a different breed.  We bring diverse and innovative ideas to the table. We see it as a responsibility to discuss the difficult stuff with you, problem solve and support you with the necessary changes and implementations.  Contrary to common believes, we are deeply engaged with our clients and take great pride in finding together the right solution for each challenge. We are not in between jobs, we choose the independent route with the right clients.  

We also don’t tell you what to do, we work with you and your team, let you come to your own decisions and hold you accountable for the actions you committed to so you can get to your next stage.  Working with multiple clients keeps us in the know, current of market trends and innovative in tackling your challenges.

Another piece I have added to the NSS model, is how we work internally as a team.  We empower each other and this collective knowledge has an exponential affect serving our clients in a myriad of ways. With NSS you work with senior level professionals, unlike the juniors of a consulting firm.  We also don’t give you a report full of suggestions and then leave you in the dust.  NSS helps you integrate and implement the changes, offloading some of your precious time.  We are good at it and have done this many times over.

I can tell you with confidence, that we dramatically lower your risk when you work with us.  We can be your Champion in a new product launch, an acquisition integration or a particular transformation phase.  You are the one who sets the dial up or down, gets an initiative managed, implemented and integrated without making a major capital investment.

Of course you are concerned about sensitive information and difficult situations.  As senior professionals who have been on your side on executive teams, we bring our sensitivity and work diligently on your side. We will be glad to sign a confidentiality agreement.

I know that the Executive-as-a-Service Model is an emerging market, and we may be a little ahead of ourselves.  Larger companies are starting to see the value in bringing in expertise when needed.  Axiom, a company that offers 650 temp lawyers to nearly half the Fortune 100 has shown billing of over $100million in 2012 according to a Harvard Business Review article “The Rise of the Supertemp”.  Larger firms have begun to access independent professionals with great success.  Why not you? We want to bring it to you, the small and midmarket business.

Knowing that this talent model is available to you, you may want to try your new product launch or acquisition sooner.  Tapping into this pool of expertise, or Executive-as-a-Service, can position you way beyond the competition!

Throw out the old habits, the traditional and make way for innovative solutions that match the 21st century demands to new, dynamic and innovative solutions. Find the right talent at the right time so you can achieve success through simplicity within the complex world we live on.

This type of talent offer is a new way of thinking. Access senior level intellectual skill set, just not permanently.

Give us a try.  Have a cup of coffee or take a walk with us and get to know us.  We want to learn from you and what holds you back in engaging expertise on-demand.  How do you access special skills when you need it and with minimal risk? Do we Fit Just Right for your needs!

617-449-7728

How to Best Access Capital

How to Best Access Capital

by Rudi Scheiber-Kurtz, CEO of Next Stage Solutions, Inc

Depending on which stage of business you are currently in, each capital market will have different lender requirements, limitations and costs.

The cost of capital for a private midmarket company can vary by size, capital type and assumed risk. Generally speaking, debt financing will be less expensive versus equity financing. A $1M mezzanine loan will be around 20% in annualized gross financing costs versus one at $25M that will be closer to 9%.  This size difference is similar in Private Equity.

A bone of contention for business owners is they do not want to provide a personal guarantee. Well, unless you are a larger firm and can qualify for a larger loan, you will not win this battle.  Be prepared to offer a personal guarantee and collateral.

According to the 2014 Pepperdine Private Capital Markets Report (PPCM) the main reasons for transactions not to go through from the lenders perspective are:

  • Unreasonable seller or buyer demand
  • Economic uncertainty
  • Insufficient Cash Flow
  • Lack of Capital to finance
  • No market for business
  • Seller misrepresentations

The overall consensus in the business world is that the lending landscape will be improving over the next 12 months. Given the increased demand of loans, there will most likely be more stringent due diligence, so you need to plan accordingly. Lots of businesses will already be backed by government loans.

The weights to the multiples method game are also interesting.  From the same PPCM report, here is how the lenders look at multiples, depending of course what lenders you are talking to and in what industry your business is in:

  1. 48% use revenue multiple
  2. 19% use EBITDA multiple
  3. 12% use Cash Flow multiple

Uncertainty in the economy will be an ongoing risk for years to come, so a business owner must have more robust plans to include outside, uncontrollable risks with sensitivity modeling.  Strong cash flow is always a good thing.

Now let’s take a look at the other side of the table – YOU the business owner and CEO.  Almost 50% of businesses feel constrained in achieving their strategic goals because of tight lending requirements according to PPCM. One of the reasons for the May RudiTuesday is to share with you how you must prepare your business before approaching a lender.

The better prepared you are before starting a conversation with lenders the higher your potential in getting the right kind and right sized funding.  Do take the time to work on your business, increase cash flow and EBITDA, which increases your business value.  Reducing your costs is important, but cutting costs to the bone is not sustainable.  Focus in reducing your fixed costs and increase the variable cost to bring greater flexibility to weather future market uncertainties.

Don’t forget your employees; they are an important component of value creation.  Keep them motivated and engaged in your business.  Make them part of the solution and let go of the people who are not willing to change.

A comprehensive lender package will make a strong first impression.  Reaching out to the right lenders for the right capital sources will enhance your chances. NSS prepared a video for you with some fist steps and take away’s:

 

RudiTuesday – Access to Capital Markets

Contact us with any questions.   617-449-7728


Developing Medical Devices For Children: Opportunities & Challenges

MDG October 2013 Forum:

Developing Medical Devices For Children: Opportunities & Challenges

This program will be at Children’s Hospital, Boston. Cutoff for preregistration is 6 p.m. Oct. 7

 

Synopsis
The development of medical devices for children has greatly lagged behind the development of devices for adults. The label “child” covers such diverse periods of human growth — from newborn to age 17 — that it creates a segmented and tiny market for device makers. Technical barriers challenge engineers to develop products for rapidly changing bodies. Implanted rigid devices do not grow with the child. And unless devices are designed with exquisite consciousness of child behavior, safety and patient compliance may be extremely difficult to attain.

Despite these challenges, some companies have succeeded in small, niche markets. There also are opportunities for incredible engineering accomplishments in solving health care needs. While the FDA has set up incentives for developing child age-specific pharmaceuticals, there is no similar program for medical devices.

Our October program will feature a panel of experts discussing the economic gaps, will examine some of the unique engineering hurdles and will look at one model for addressing some of these challenges.

Speakers

  • Don Lombardi, CEO, Institute for Pediatric Innovation
  • Aaron Sandoski, Managing Director, Norwich Ventures
  • George Kenney, President, EntraTympanic
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Lombardi Sandoski Kenney

Who Should Attend:

  • Entrepreneurs with a commitment to improving the lives of sick children
  • Engineers ready for a challenge to current ways of conceiving and designing products
  • Small and medium size medical device product development teams eager to cultivate new ground in the industry
  • Parents seeking answers to the heretofore insoluble problems of getting therapies that work for young bodies and minds
  • Clinicians hungry for alternatives to jerry-rigging oversize adult devices for small children
  • Anyone with an interest in how life sciences can effectively turn its attention to creating to previously intractable problems in serving some of the most vulnerable among us

About MDG

The Medical Development Group (MDG) is a community of individuals professionally committed to the Medical Device and other Medical Technology Industry segments united by the belief that innovation and advances in technology lead to substantial improvements in health care. MDG pursues this mission through the organization of educational programs and forums: the facilitation of cross-disciplinary dialogue and collaboration; the creation of venues for networking and information sharing for current and aspiring professionals, clinicians, and entrepreneurs; and the development of alliances with complementary organizations.

 

 

First Regional Manufacturing 'Access to Capital' Workshop

Advanced Manufacturing Collaborative| AMC

1st Regional Manufacturing Access to Capital Workshop

Lots of lenders will be present and NSS has been invited to participate in the workshop. If you are a manufacturer looking for capital this is an event you don’t want to miss!

Date: Tuesday, Nov. 13, 2012
Time
: 8 a.m.
Where
: The Enterprise Center at Salem State University
121 Loring Ave., Salem

Video Clips from NSS Workshop "How to Gain Access to Capital Markets"

This is NSS’ second year of providing topic specific CEO workshops. They have been well attended and we offer them about every other month. We cover a broad range of topics important to CEOs from increasing valuation to succession planning. The topic on “Accessing Capital Markets” is the #1 challenge businesses face, according to our recent CEO Survey.

We wanted to capture the essence and caliber of the discussions on video so that we can share them with more CEOs and other thought leaders.

We take pride in our selection of panelists and moderators who are leaders in their respective fields. Our thanks again to the workshop panelists:

  • Skip Kelly of Silicon Valley Bank
  • Katherine Brand of Monroe Credit Advisors
  • Joan McArdle of Massachusetts Capital Resources Company
  • Patricia Conry of Middlesex Savings Bank

If you are in the process of looking for debt or equity financing, NSS can help you prepare the story and the numbers so that lenders will listen.

Call us at 617-449-7728 today to set up a time to meet.


Gain Access to Capital Markets

Join us for our next CEO Workshop

“How to Gain Access to Capital Markets”

Thursday, Nov 17, 2011 from 7:30am to 9:30am

Register Today!

According to our recent Annual CEO Survey, the biggest challenge for CEOs is getting access to capital markets and how to maintain liquidity in a volatile economy.

In response to this urgent challenge, the upcoming workshop will explore two areas:

  1. How to organically manage your cash flow
  2. Hear first hand from Key Lenders how to access capital

The exceptional line up of Key Lenders will share how to optimally pursue debt and/or equity financing in a fragile economy.

Learn from these Key Lenders:

  • Who is lending?
  • What industries and why?
  • How can you make your company more attractive to lenders?
  • What NOT to do and why?

Join us for this important panel to discuss the current credit market climate for early stage, growth and middle market companies.

Reflections from the NSS CEO Workshop- Sept 21, 2010

The workshop was sponsored by NSS and hosted by WilmerHale Venture Group. The NSS CEO Workshop Series is intended for CEOs of revenue producing companies.

The board room was chuck full at the WilmerHale Venture Group office in Waltham. The invited speakers were Joan McArdle of Mass Resource Capital, Jane Braun of Silicon Valley Bank, Robin Lockwood of Flybridge Venture Partners and Christopher Mirabile of RacePoint Capital LLC.  The panel discussion was led by Lee Schindler of WilmerHale.

The focus was around changes in the funding arena and how that has affected each group.  We then opened it up to a dialogue with the CEOs.

Here are some interesting facets of this discussion (loosely defined by NSS):

  • Significant changes in activity around Angel Groups, almost a flip side between VC and Angel funding.
  • More syndications between Angels and VCs.  Angels are valuation centric.
  • Huge migration in the VC world and closing of funds from 800-900 down to 600-700 VC funds
  • Because of high multiples among some VCs,  Angels are filling some of that gap
  • With uncertainties in economy it has been hard for companies to commit to expansions
  • Lots of Re-Capitalizations are happening.  Good timing.  With lower interest rates it is advisable to reconsider a re-cap with the layers of debt and the different view from lenders a company may have.  Mass Capital Resources provides this type of re-cap with a 2-3yr interest only financing.  Mass Capital is currently doing deals in the $1M to $5M range and at an interest rate typically between 10% and 12%.
  • Companies are starting to invest again.  All agreed that they are seeing an uptick in business activities.
  • There is a huge Global push
  • More VCs give smaller checks
  • VC’s today are investing in companies that are capital efficient or not at all.
  • It’s more difficult to get investment in a product or services business than it is in a software business.
  • How do you get a highly leveraged company to an exit in today’s market?  Not really any differently.
  • How can an entrepreneur know how much money to raise?  Determine what the life of an investment is and then try to match it with the right investor.  For example, an investment of $500K to $2.5M over the life of the investment probably won’t be appealing to a typical VC.  Putting in $30M over the life of the investment would be more appealing.
  • How often do Angels and VC participate in similar events?  There are some forums when a mixture of investors is present.
  • How about grants as a way to get some funding?  That may be a good thing (it’s non-dilutive) as long as it fits your business strategy.  Do not lose focus.
  • Whether or not an angel or VC invests in the company depends in large part on how good the entrepreneur is.  “Can he/she do it?”
  • Best thing to do if you’re raising money – Don’t go around town asking for money.  Instead, spend your time building relationships with investment community, asking questions like “what would you do if you were me?”
  • M&A activity is picking up and deal flow is up

Our next CEO Workshop will be Tuesday, November 9 from 7:30am-9:30am and the topic will be around “Merger & Acquisitions”.  Save the date!