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CEO Advisor® Newsletter
April 2016
Fund Raising by Venture Capitalists Tightens

Growth capital by venture capitalists and private equity firms can enable small and mid-market companies to grow to the next level. Venture capital money is typically for startup and early stage companies that are not yet profitable. Private equity firms provide growth capital for later stage, profitable companies, and may even let the owners take significant money off the table, if desired.


CEO Advisor, Inc. focuses primarily on private equity firms for growth capital for its clients. Just this month, I secured a $5 million Term Sheet for a client at a very favorable valuation. Finding the right investment partner coupled with negotiating the terms of growth capital investments are critical. The expertise and experience of a funding advisor like CEO Advisor, Inc. is a must for growing companies.


In this article we will recap venture capital activity in 2015. Venture capital investments in startup and early stage companies tightened in 2015 compared to 2014, valuations in 2015 peaked on most investments, and valuations on new investments are tapering off according to the latest data available from Pitchbook Data, Inc.


Initial venture capital fundings in 2015 consisted of nearly 2,000 investments totaling $7 billion compared to 3,368 investments totaling $7.5 billion by venture capitalists in all of 2014.


Exits, or the sale or initial public offering (IPO) of venture-backed companies, were off dramatically in 2015 at $64 billion on 860 deals versus $93.8 billion on 994 deals in 2014 further demonstrating that the public markets for IPOs are in limbo. Many IPOs are being priced at lower than expected valuations. Less IPOs also mean less money available to invest in new deals.


The value of IPO deals through December, 2015 was just $36 billion versus $95 billion in 2014. Poor or stagnant performance in the major stock markets are holding back IPOs. Fundamentals in technology are weakening, such as revenue for software and services being down 2.4% in Q3, 2015 vs. the same quarter a year ago according to Moody's Analytics.


On the other hand, demand in VC funds by investors continues to be strong with investors pouring in $37 billion compared to $34 billion in 2014. This influx of venture capital funding is partly due to large later stage or follow-on investments for unicorn type of investments (rare startups valued at $1 billion or more) such as Uber and Snapchat.


With venture funding still at levels that are higher than 17 of the last 20 years, it will be extremely interesting to see how 2016 unfolds.


CEO Advisor, Inc. advises small and mid-market companies on the preparation for fund raising, fund raising, growth, strategy, value building and mergers and acquisitions.

Contact Mark Hartsell, MBA, CEO of CEO Advisor, Inc. today for a no cost, no obligation meeting at your office at (949) 629-2520 or email MHartsell@CEOAdvisor.com.

Mergers & Acquisitions 
One-on-One Consultation

Learn How to Optimize the Value of Your Company and 
Sell Your Business at the Highest Price
     null
Mergers & Acquisitions 
One-on-One Consultation

Learn How to Optimize the Value of Your Company and 
Sell Your Business at the Highest Price
     null
Mergers & Acquisitions 
One-on-One Consultation

Learn How to Optimize the Value of Your Company and 
Sell Your Business at the Highest Price
     null
Mergers and Acquisitions
One on One Consultation

Critical Skills for the CEO/Owner
The Wharton Business School newsletter, published by The Wharton School, University of Pennsylvania did a recent poll of executives and business owners. The results below show the four most important skills that would strengthen a CEO's performance.
Strengthening what skill would most improve your performance?
Leadership - 33%
Time Management - 28%
Negotiating - 22%
Understanding Your Financials - 17% 
1. Leadership
Leadership and execution is the key to success and achieving your goals. Leadership requires planning, organization, being proactive, having a crystal clear understanding of the business both financially (quantitatively) and operationally (qualitatively), hiring and managing people of multiple generations and cultures, and creating a culture of accountability to grow your business to the next level.
2. Time Management
Time management is the Achilles heel of most CEOs and small business owners. Not just managing time on a calendar and working 60 hours a week to keep up, but real strategy and planning to focus and structure your time to impact your business in a disciplined manner. CEO Advisor, Inc. works with its CEOs and small business owner clients to set goals and priorities, and truly excel in both leadership and time management.
3. Negotiating to Success
Negotiating is the Holy Grail in business - with customers, prospects, vendors, employees, etc. We focus deeply on negotiations using some of the top techniques used by military leaders and business people. Your sales team can benefit tremendously from sales training and negotiating skills training from securing the initial meeting to negotiating price effectively to closing large deals. Strengthening your negotiating skills can yield a 100X return on your investment. If you are not a master negotiator and salesperson, invest in your negotiating skills and prosper in 2014 and beyond.
4. Understanding Your Financials
If there is one New Year's resolution that every CEO and small business owner should commit to is gaining a thorough understanding of the financials of your business. If you don't, you are flying blind! This includes your Profit & Loss Statement (Accrual and Cash basis), Balance Sheet, Financial Ratios, creating a 2014 Financial Forecast, and learning to analyze and understand how to positively impact your Gross Margins and Net Profit, as well as, pinpointing early signs of problems. CEO Advisor Inc. spends the time to ensure every client not only understands but uses their company's financials in growing their business to the next level.
Contact Mark Hartsell, MBA, CEO of CEO Advisor, Inc. today at (949) 629-2520 for a no cost initial consultation, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.
Critical Skills for the CEO/Owner
The Wharton Business School newsletter, published by The Wharton School, University of Pennsylvania did a recent poll of executives and business owners. The results below show the four most important skills that would strengthen a CEO's performance.
Strengthening what skill would most improve your performance?
Leadership - 33%
Time Management - 28%
Negotiating - 22%
Understanding Your Financials - 17% 
1. Leadership
Leadership and execution is the key to success and achieving your goals. Leadership requires planning, organization, being proactive, having a crystal clear understanding of the business both financially (quantitatively) and operationally (qualitatively), hiring and managing people of multiple generations and cultures, and creating a culture of accountability to grow your business to the next level.
2. Time Management
Time management is the Achilles heel of most CEOs and small business owners. Not just managing time on a calendar and working 60 hours a week to keep up, but real strategy and planning to focus and structure your time to impact your business in a disciplined manner. CEO Advisor, Inc. works with its CEOs and small business owner clients to set goals and priorities, and truly excel in both leadership and time management.
3. Negotiating to Success
Negotiating is the Holy Grail in business - with customers, prospects, vendors, employees, etc. We focus deeply on negotiations using some of the top techniques used by military leaders and business people. Your sales team can benefit tremendously from sales training and negotiating skills training from securing the initial meeting to negotiating price effectively to closing large deals. Strengthening your negotiating skills can yield a 100X return on your investment. If you are not a master negotiator and salesperson, invest in your negotiating skills and prosper in 2014 and beyond.
4. Understanding Your Financials
If there is one New Year's resolution that every CEO and small business owner should commit to is gaining a thorough understanding of the financials of your business. If you don't, you are flying blind! This includes your Profit & Loss Statement (Accrual and Cash basis), Balance Sheet, Financial Ratios, creating a 2014 Financial Forecast, and learning to analyze and understand how to positively impact your Gross Margins and Net Profit, as well as, pinpointing early signs of problems. CEO Advisor Inc. spends the time to ensure every client not only understands but uses their company's financials in growing their business to the next level.
Contact Mark Hartsell, MBA, CEO of CEO Advisor, Inc. today at (949) 629-2520 for a no cost initial consultation, by email at MHartsell@CEOAdvisor.com or visit us at www.CEOAdvisor.com for more information.

Your company is your most valuable asset. Preparing to sell, optimizing your company's value and effectively and efficiently selling your business for the best price is paramount for every CEO, president and business owner.


CEO Advisor, Inc. is offering an exclusive, one-on-one business consultation at no cost. Take advantage of this opportunity to discuss the value of your business with our expert for an optimal exit strategy. This discussion will include critical aspects of selling your business for the highest price.


Call Mark Hartsell, MBA, CEO at (949) 629-2520 today.


Mark Hartsell's Credentials:

  • Certified in Mergers & Acquisitions, Wharton Business School, University of Pennsylvania
  • Master's Degree in Business, Loyola University; University of Maryland Undergraduate, Business Admin.
  • 37 Years of Experience in Senior Management Positions, Mergers and Acquisitions, Business Consulting, Fund Raising and Turnarounds
  • Founded, Funded, Grew and Sold a SaaS (Cloud-based) Software Company to a NASDAQ Company (DRIV)
  • CEO of CEO Advisor, Inc. (Business Consulting, Growth Capital, Mergers & Acquisitions and Turnarounds) for the Past 11 Years

Points of discussion in the Mergers & Acquisitions consultation will include:

  • How to Develop an Exit Strategy
  • Valuing Your Company
  • The Selling Process
  • Letters of Intent and Due Diligence
  • Questions to Ask Before Selling Your Company
  • Do the Numbers Add Up for You
  • Indicators of the Best Time to Sell
  • Asset Purchase vs. Stock Purchase


About CEO Advisor, Inc.

CEO Advisor provides business consulting and mergers and acquisitions advisory services affordably and effectively to meet the specific needs of small to mid-size companies in a wide range of industries, including software, technology, media, professional service firms, healthcare, manufacturing and many more.


CEO Advisor's mission is to advise CEOs, presidents, business owners and principal executives with the needed expertise and focus, coupled with hands-on advice and work performed to grow your business to the next level or realize your life's dream through a successful exit.

Testimonial  

 

"I highly recommend Mark Hartsell, CEO of CEO Advisor, Inc. Mark and I rebuilt my management consulting business and, in all honesty, I couldn't have done it myself: incorporating, marketing plans, sales coaching, prospective client lists and a dozen other tasks - all in less than six months. He was easy to work with, supportive, and perhaps most importantly, he had workable, practical answers to my business questions and problems that flowed from his broad business experience."


CEO, Energy and Environmental Consulting Firm

"I highly recommend Mark Hartsell, CEO of CEO Advisor, Inc. Mark and I rebuilt my management consulting business and, in all honesty, I couldn't have done it myself: incorporating, marketing plans, sales coaching, prospective client lists and a dozen other tasks - all in less than six months. He was easy to work with, supportive, and perhaps most importantly, he had workable, practical answers to my business questions and problems that flowed from his broad business experience."
CEO, Energy and Environmental Consulting Firm

"Mark Hartsell and CEO Advisor, Inc. provide a unique advisory service for CEOs. He not only tackles high level strategic issues to assist CEOs navigate through challenging times, but Mark also gets very involved in actually addressing important issues head-on by performing the work to achieve tangible results.


Whether it is growing a business to the next level, turning a distressed company around or preparing a company for an exit, Mark's firm, CEO Advisor, Inc, provides a broad range of services and Mark is there for the CEO every step of the way."

 


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Haynes & Boone, LLP

Words of Wisdom


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Prime Minister of the U.K.