Financing Gazelles The Blog of Lantern Capital Advisors Corporate Financial Consulting for High Growth Companies

Weekly What If: Buy Out Business Partner

Mon, 14 Mar 2011 10:50:33 -0400

What if we buyout our business partner?
For some companies, their biggest roadblock to growth isn’t a lack of ideas, motivation or initiative. It is a business partner that has other priorities. For companies with significant growth potential, this challenge arises frequently. One owner wants to grow; the other wants to sell. One owner sees potential and the other sees risk. Sometimes this comes from different perspectives, stages of life or generations like in family businesses (the younger generation wants to build wealth while wants to protect it). Owners caught in this position can go through years of treading water, and it’s not until it is addressed that greater growth can occur.
What if we buyout our business partner?
Coming up with just one story for this ‘what if’ is difficult. I have seen this play out numerous times. For growing companies, a great time to do a buyout is in combination with a larger growth or financing initiative.
While this may seem counter-intuitive, exploring this ‘what if’ hinges on a few important insights:
1) Try not to fight over valuation - Valuing a business is not an exact science and my experience is it’s difficult to ‘convince’ an owner of a value anyway. Getting a formal valuation can help but determining the ‘right’ price is often only a ‘battle’ while getting the opportunity to build greater future value is about “winning the war.’ In fact, I have seen buyers actually overpay to make a seller happy in order to ‘win the war’ and create greater equity value over time.

2) Figure out the Company’s financing capabilities - Our clients typically do buyouts with debt so that as they pay the debt off, their equity value increases. So rather than focus on valuation, focus on your ability to pay because - you can only pay what you can afford to finance. For example, if two partners each own 50% of a $20 million company, one partner can buyout the other one if the financing can support $10 million. If the company can only support $8 million of financing, the seller needs to lower his price or retain a portion (in this case 20%) for a buyout or payout later.

3) Nothing talks like cash - Whether they sell 100% or a portion of their ownership, selling owners get motivated when they get real cash upfront. This approach sure beats buyouts done with insurance products and a buyout/sell agreements. Those deals are done to cover future estate taxes but the selling owner doesn’t get any cash until he dies! How unexciting is that!

While it may seem like short, simple advice, following this unconventional logic can help owners Explore ‘what if’ and remove often their biggest obstacle to greater growth value (their business partner).

Visit the Lantern Capital Advisors for more information on Exploring Your What If or Visit our White Paper Library to learn more about Corporate Finance Topics

The Wonder of Bras: Tales From Hollywood Boulevard

Wed, 9 Mar 2011 16:00:34 -0500

Recently we were asked to consider sitting on a panel for an executive conference of growing companies, and of course, we jumped at the chance. But, one of the “corporate sponsors” (i.e. an investment banking firm) quacked at the thought of it, and so we were asked to participate in a program later in the year. Why? Of course we know why! Investment bankers are our competition and although a national accounting/consulting firm highly recommended us, the investment banker wasn’t buying it. Using Lantern Capital Advisors to raise capital or get a company refinanced is like wearing a Target T-shirt to the Oscars with your Georgio Armani silk skirt. Same outcome, less price. We get it, but does the rest of the world?

This same story played out years ago. During that time I was an internet consultant and had the opportunity to work for Frederick’s of Hollywood where I was part of a team that helped them complete a technology assessment, a marketing strategy, and their dot com strategy. Prior to that, I had always thought of Frederick’s as being “trashy” and it wasn’t until I went to work for them that I actually ever stepped foot in their store. Once I got behind the scenes, it truly became a company that I respected. In short, I was a “WonderBra” evangelist. During my stint with Frederick’s, I got to work with an awesome woman executive, Terry Patterson, who was brought in by their private equity investor to turn the company around. It was great working for a very savvy business woman, and I was mesmerized by her drive. Terry was charged with redefining the Frederick’s brand and her first order of business was to put some Hollywood glamour into the brand and pull away from the stereotypical client that hung out on Hollywood Boulevard. It was working. Terry was rebranding the company and I was working with my team to redesign and rebuild the website so that it was more “department” focused. It was also one of the first websites to implement “suggestive” selling.

Things looked even brighter because Frederick’s was also in the final stages of developing an innovative new “water based” product and the combination of our new products and growing Internet revenues forecasted a rosy future.

Then, one night as I sat in Fredrick’s design room (a small windowless office on Hollywood Boulevard), Victoria’s Secret announced they were now producing their own “Water Type” Bra. In my humble opinion the product was inferior to Fredrick’s. Both Victoria’s Secret and Frederick’s of Hollywood were getting their products manufactured in China. Using the same lace, and the same thread, and most likely...the same pattern. Different factories, I know, because my Frederick’s bra is still holding strong. Still, Victoria Secret charged more for their bra, and ended up selling millions of them. How can Victoria’s Secret sell so many bras? Advertising.

The same holds true today. Quality doesn’t always win (or at least not in the short term). Lantern uses the same sources of capital as the investment banking community in order to access capital for our clients, but we charge less for it, and we do absolutely no advertising, well, besides the web, if you categorize having a website as advertising. :) We depend on word of mouth. We charge for our time. If a client is going to be successful raising capital, using our team to achieve the same goal makes sense. We respect the quality of our clients, and we strive for quality in our work and that shows in our unique process and consulting steps done very early in our engagements to remove risk and provide an effective roadmap that works consistently well. Investment banker’s don’t do this because it could endanger their ‘advisor’ fees. But by not seeking those big advisor fees or accepting referral fees, we are able to create competition for financing for our clients at a fraction of the cost and have those savings accrue back to our clients.

We built our firm to help REAL companies with REAL growth potential and while our clients can afford to buy the Chanel White T-shirt, they are still REAL enough to choose the Target t-shirt that works just as well because they know REAL value goes beyond just window dressing.

For our clients, every dollar saved today can be used to create even greater value tomorrow.

Visit the Lantern Capital Advisors Website for more information on Exploring Your What If or Visit our White Paper Library to learn more about Corporate Finance Topics

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.

Follow Jennifer on Twitter

Weekly What If: Testing The Capital Markets Before Accessing The Capital Markets

Fri, 4 Mar 2011 10:20:45 -0500

As the financial markets began to unravel late in summer of 2008, many financial institutions stopped funding new investments. This directly impacted all sorts of companies and their ability to get new financing. For us, a corporate financial consulting firm that raises capital for growing companies, this was a particularly worrisome challenge because we work on an hourly fee only basis rather than a brokerage and investment banking approach, which relies on big ‘success fees’ upon closing. Believing in our hourly based approach (which offers much lower fees and better objectivity), we now had a new pressing challenge. How do we help our clients quickly answer: 1) Is financing available, and 2) at what general terms? Especially, if we weren’t success based. In order to bring more peace of mind to our clients (and ourselves!) since we were not working on a contingency basis to raise capital, we came up with this “What if.”

“What if” we could test the capital markets before accessing the capital markets?

For the previous 12 years, our financial process was like any other advisors’. We started our firm by creating a high quality business plan with high quality financials. Then, we distributed that business plan to numerous financing sources and waited for their initial feedback. A recurring problem with this approach, was clients would spend time and expenses before they had answers to those key questions. The challenge was even more magnified the higher the hourly billing rates, or the harder the deal was to achieve. Meaning, clients that didn’t qualify to get funding, or got less than expected results became more than just a little disappointed. If a deal couldn’t get done, it wasn’t because we didn’t exhaust the same resources as any other advisor, it was because the rules for getting deals funded had changed, the investment criteria had changed, and the banks were holding back on funding businesses. Before 2008, it was the consultant’s obligation to set reasonable expectations, but with ‘the sky is falling” in 2008, and knowing that bankers could waste a lot of people’s time just trying to stay involved in the opportunity in case their rules “changed”, times were anything but reasonable.

So to reengineer our process and remain committed to our hourly based approach, we decided to change how we did financial planning. First, instead of launching into a big (and expensive) business planning exercise that had a possibility of not yielding interest from institutions, we began creating first a high level strategy and then a more detailed financial plan. Once that was complete, we could then go out and talk ‘doctor to doctor’ to funding sources we thought would have an interest to fund our clients. After talking with those groups, we would share the feedback with our clients and articulate the financing that (at that point of time) their company was qualified to achieve at that point of time and was attainable. No bias, no conflicts, not commitments, just the straight facts. No one was locked in to anyone, we were all charged with achieving the same thing for our client: The best financing options for the best terms. No conflicts of interest, no referral fees, no lock periods. If our findings weren’t positive during the assessment phase, we could then help the client reset expectations, or set alternative strategies and goals should they decide to investigate other routes or opportunities.

As we hoped, this redefined corporate financial planning process enabled us to significantly reduce the probability of coming up short of our client’s expectations, and has accomplished amazing client satisfaction results. In fact, since implementing our new corporate financial planning process, we have delivered financing proposals 100% of the time for clients that continued on with their engagements post assessment feedback. Equally important, the assessment process was done quickly (usually within two weeks) and proved a very cost and time efficient way to:

• Increase client confidence,
• Shorten the overall planning time,
• Keep all our clients’ funding options open, and
• Gain valuable input on likely future financing terms.

While the jury is still out whether our corporate financial planning approach will drive the internal growth of our firm that many of our clients enjoy, we have proven to ourselves and to our clients, that we have found a creative and possibly even disruptive way to bring entrepreneurial companies greater value. If their deal can get funded, we can get it funded. Our growth is starting to come from clients and word of mouth, that appreciate the value and have referred us to others. It has become really exciting.

Visit the Lantern Capital Advisors Website for more information on Exploring Your What If or Visit our White Paper Library to learn more about Corporate Finance Topics

Charlie Sheen on Corporate Financial Planning

Wed, 2 Mar 2011 17:40:43 -0500

What Charlie Sheen can tell YOU about your business - “Sheenisms” by Lantern Capital Advisors

Like many of you, I ventured to the ‘octagon’ last night as I drifted in and out of semi-consciousness while I watched the thoroughly engaging Charlie Sheen interview on 20/20. Wow! That being said, call him a $2M a week ‘junkie’, ‘delusional’, ‘crass’ or just plain ‘pickled’ BUT when it comes to financial planning and your business, he brought up some rather interesting concepts that Tony Robbins just hadn’t articulated clearly enough…

So, provided for your entertainment during this crazy week of non-stop “All Things Charlie” and the fact that the media doesn’t read Tony Robbins, Here are some “Sheenisms” for your enjoyment. In the spirit of entrepreneurship that he supports, here are some “Sheenisms” and what they can teach you about financial planning for your business.

“The Scoreboard doesn’t lie” – Whether good or bad, your financial results, say a lot about your business. Key figures like cash flow, profits and debt do matter. No matter what your ‘potential’ may be or how your business is ‘strategic’ to your customers and potential buyers, the financials tell a story that doesn’t lie. The scoreboard says a lot about what your business is likely worth, what’s working and not working as well as what financing alternatives you have (and don’t have.) Charlie’s advice: understand and learn from your scoreboard.

The Best Entrepreneurs are “warlocks” – in “Charlie Speak” – a warlock is someone with ‘special powers’ that can ‘turn tin to gold” as well as “shoot poetry out of their fingertips.” While I don’t know about the poetry, he does have a point that great business owners don’t just have happy customers, respect of their employees, or an inspiring mission statement. At the end of the day they create real economic value (or ‘gold’). Again, while ‘shooting poetry from your fingertips” would be a great party trick…Charlie’s real advice: be like him, be a ‘warlock.’

The real thrill of business is ‘winning’ – “winning” in “Charlie Speak” means showing up your executive producer who supposedly has ugly kids and an ugly wife. That’s not me. But...‘Winning’ in business is a (somewhat) similar concept that means success is really how you define it, and what’s important to you. That could mean how you choose to exit your business or achieving what matters to you the most – and as a private business owner – you get to decide, and that’s a wonderful thing. Charlie’s advice: identify what is ‘winning’ to you and chart your own course – it can be exhilarating, especially if you’ve got a Goddess beside you.

So if you are someone ‘that signs the front of a check’ (Charlie discussing having his children respect him when they grow up) and are the ruler of your “octagon” (Charlie’s imaginary place where good and evil battle for supremacy…i.e. your business) to summarize Charlie’s words of Wisdom (and in all fun, of course)…
 “Strive to be a ‘warlock’ and pay attention to the “scoreboard that doesn’t lie” and you will experience euphoria (‘winning!’) that goes beyond just the money.”

If you find Charlie’s word’s of wisdom (“Sheenisms”) really inspiring, check out… www.nymag.com and their Charlie Sheen Glossary of Terms - they have much more to offer, and some terms that we couldn’t relate to at all…and, you can always read Anthony Robbins Awaken The Giant Within, because it’s sitting on Charlie’s kitchen counter.

Visit Lantern Capital Advisors for more information on Exploring Your What If or Visit our White Paper Library to learn more about Corporate Finance Topics

Weekly What If: What If We Change Revenue Model

Fri, 25 Feb 2011 14:56:00 -0500

20 Year Old Software Company Unlocks
Explosive Growth with this “What If”

A small, well respected technology provider (name witheld) had logged years of constant technology innovation for its bank and retailer customers. As an example, this company was one of the first to enable instand credit and credit card applications directly from the department store counter. That type of continued innovation led to steady growth and a marquee list of customers. However, despite their technology achievements and customer satisfaction, the company was still relatively small and appeared to lack much real growth potential. A big challenge for the company was it had a slow sales cycle and small market. Each new product sold for over $1 million a solution.
Determined to find new ways to grow, the company explored some different “What If’s”, until they nailed the one that sent their growth soaring.
What if we create a new product or go into new markets?”
Over the course of two years the company had developed and was beta testing a completely new product in a new industry.
What If we buy another company or competitor?
Not leaving any stone unturned, they briefly considered buying another company or competitor. That What if proved difficult because other acquisitions in the same industry would likely be expensive and provided no added growth once complete.
Eventually the company began to zero in and explore an entirely new What if that was the precipitator to drive significant growth.
“What if we change our core product’s pricing model (or revenue model) from an upfront license to a pay as you go service?” (now called Software as a Service or “Saas.”)
Management theorized this could take their already well known product and make it available to small financial institutions, greatly expanding the market. Also, the sales cycle could be much shorter and the portability of the product greatly enhanced. Further, the company also believed the model could work because they already had some customers using it on a similar basis (“service bureau”).
Based on the new what if strategy, the company was able to attract capital to fund their growth, build its sales team, and even went on to acquire a customer that offered complementary services to their new target clients.
Within a year of implementing their “what if”, the company’s revenues began to grow rapidly, generating 40% annual growth overall, with over 70% annual growth coming from the new SaaS service model. Along the way the company was named Louisiana’s Technology Company of the Year. Then, after several years of record growth the company’s owners and investors chose to sell the growing business to a public company for over $90 million (cash).
I appreciate the fact that I got a chance to work with this Company and play a smart part in its achievement and to this day it stands, for me, as a reminder of the growth potential for even mature companies that have both the willingness to Explore What If and the desire to grow.

Visit Lantern Capital Advisors for more information on Exploring Your What If or Visit our White Paper Library to learn more about Corporate Finance Topics

Find Your Fast Break Strategy White Paper

Tue, 22 Feb 2011 11:55:20 -0500

A fast break play in basketball occurs when a team races down the court and scores a goal as quickly as possible. Loosely translating that to business, fast break strategy means an approach that maximizes an owner’s goal (i.e. like running up the score) or achieves a desired goal as quickly as possible. This white paper by Lantern Capital Advisors helps entrepreneurs and management teams define five ways to find their own fast break strategy.

Find Your Fast Break Strategy White Paper by Lantern Capital Advisors

Visit the Lantern Capital Advisors Website for more information on Exploring Your What If or Visit our White Paper Library to learn more about Corporate Finance Topics

Weekly What If: Spark People!

Fri, 18 Feb 2011 09:28:59 -0500

8 million people are improving their fitness thanks to this What If.
We were just in a meeting this morning and thought that we really needed to share our favorite companies, not because people are looking to us as trend setters, but because the momentum of businesses doing really great things to “shake it up” from the norm while exploring “What If” really is exciting to us, and it’s what we are about as a company. Why we do what we do the way we do it is another post, but today’s blog post features one of Chris Risey’s favorite companies and websites (outside of SI.com), www.SparkPeople.com.
Two years ago I was introduced to SparkPeople.com through my lifelong friend and godmother of my children, Dr. Mignonne Mary from New Orleans. Mignonne has spent her medical career working in the field of internal medicine and medical weight loss and after the catastrophe that was Katrina (she ended up moving with her husband and children to Jupiter, Florida for a few years after the storm), I hooked her up with a very popular diet doctor in Florida, Dr. Jay Garcia. Florida is a lot like California, you have to be ready for swimsuit season eleven months out of the year, and the pressure to look good is right up there with making sure you are not the last one picked at dodgeball in middle school.
Dr. Garcia was partnering up with Barry Spears of The Zone Diet fame, and Mignonne was a perfect fit to their medical weight loss clinics. She is a low carb, lots of veggies , healthy exercise type of woman. Mignonne is a very beautiful, tall, energetic, “skinny” girl, and whenever we are together, I am always watching what she’s doing, and being from New Orleans, the girl can eat. I won’t go into my opinion that taking a pill can make you skinny in some cases, but it’s not sustainable, and Mignonne believes the same thing, which is why she told me to go to SparkPeople.com, and it would make everything come together. In this conversation, she also told me to go to You Tube and watch “The Secret”, which I did, and is also now a major theme in my life. I’ve even made my oldest child sit and watch it when it’s doom and gloom in his world for a real attitude adjustment. Sure it’s corny, but Oprah loves it too, and between that video of life philosophy and law of attraction and SparkPeople.com, I’m now back into my skinny jeans without the muffin top through understanding my diet and exercise, and then I shared it with Chris Risey.
SparkPeople.com was launched in 2001 as a goal setting site. Chris Downie just knew he wanted to help millions of people, and I am sure after reading his life story, he survived because he knew the secret as well. Soon after they quickly realized that most of their members were interested in nutrition, fitness, and health goals so they quickly became a nutrition and fitness site in 2002. With that they added a premium subscription (fee based) service like a meal planner and fitness tracker and then became a paid subscription site. But in 2006 the Company’s membership and visibility sky rocketed when its founder, decided to explore this What if.
What if we make the website 100% free and still offer ALL of our tools and resources for free. According to their website, the company was able to do this financially because its founder, Chris Downie and his wife were early employees at eBay, and got a healthy supporter in Steve Case, co-founder of AOL. Today, the Company helps over 8 million people (Chris Risey now included!) track and improve their nutrition and fitness. The company has won numerous awards and attracted a variety of advertisers including some very well known consumer brands and Fortune 1000 companies.
But here is where it gets interesting, Spark People has the foundation of the same philosophy that we do, they promote the personal well being “What If”, imagining happiness, inner contentment, and self improvement, but roll it all into a personalized action plan and tool kit for weight loss. Just like I live my life knowing the Secret, and Lantern works with clients to ask and then explore their corporate “What If” (imagining the possibilities and then develops the road map to get them there, and provides access to the tools or resources that the company needs), Spark People inspires individuals to dream of their perfect life, their perfect outer self, and gives them the ability to connect with others, learn from others, and watch themselves transform their way of life.
Spark People’s Magic Formula:
1. Goal Setting
2. Behavior Change
3. Community Support
4. Positive Motivation
5. Team Building
6. Accessibility
7. World Class Technology

And just incase you haven’t figured out the obvious, SparkPeople.com is one of our favorite things and we highly recommend that you check it out, and btw, there is an app for that!..
Diet and Food Tracker By Spark People App Available on iTunes

Visit the Lantern Capital Advisors Website for more information on Exploring Your What If

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.

Follow Jennifer on Twitter

Watch The Secret: 1st 20 minutes (a tad corny, but you’ll get the idea).

How To Get Funding Sources Interested In Your Business

Thu, 17 Feb 2011 11:16:35 -0500

Entrepreneurs have great ideas, and know how to execute the idea. Typically they are visionaries, and excel at articulating their business proposition, know who they are going to go after, and can sell their product to those that have a need for what they’ve got. Entrepreneurs are the most interesting people to work with, because they are the ones in the room what weren’t afraid to explore what was out there, to try something different outside of how everyone else was doing it, and are constantly soaking up information to transform the world. But there comes a time in all business lifecycle’s that the exploration of using additional sources of capital to achieve the objectives of the business is worthwhile, or viable.

What if?

Growing companies typically require some sort of capital infusion along the way. An acquisition opportunity appears, a company is outgrowing the capacity of their current lender, an owner (or equity partner) is interested in getting their liquidity out of the business, or getting a partner out of the business. Either a basic business loan, line of credit, or in the case of a larger scope endeavor, a more complicated financial business transaction must be explored. Funding is required. Does the entrepreneur have time to do this, have the experience to do this, or the energy to do this without disrupting their business? The answer is an overwhelming “No.”

But the real question is: How To Get Funding Sources Interested in Your Business?

Venture Capitalists and Bankers are corporate finance investors that excel at anticipating trends, and making a lucrative investment. They sail through the flowery sales jargon, the skills of your management team, and the overview of the competition. If your business plan lands on their pile, and meets their industry investment parameters, they immediately turn to the numbers and plug in your model into theirs. They care about the capital intensity of the business in order for it to realize it’s maximum potential (or how much they need to invest before they get their targeting ROI). In addition, they care about scalability of the business, and the unit economics. But most important for the entrepreneur to know is that when someone makes an equity investment in their company, they are looking for the exit strategy and the return on the investment. For a venture capitalist, it’s a quicker return on the investment to sell a company than take it public, as the IPO locks them into the investment for an additional six month to two years. Smaller companies tend to trade at a discount, so those investments don’t tend to be as lucrative for the venture capitalist or investor. Alternative Investment Funds and bankers additionally focus on the year over year return on their investment and the length of time until the investment is repaid. Can the borrower afford to borrow the money and can the cash flows of the business support the loan?

Venture Capitalists, Funds, and Bankers receive hundreds, if not thousands of business plans per year from companies looking for money. Out of these plans, they will typically fund just a handful. What is critical for any company looking for capital is that the business not only has a strategy for growth and execution strategy, but has a strong financial partner or team member that can get things done quickly and professionally, has the relations with the right service providers, and can negotiate the right pricing for the value of the financing being delivered.

Does the management team have a savvy elevator pitch that can get the investor to say, “I get it, continue...” Once an institution expresses interest in providing capital for your business, it is imperative that a company quickly can turn around the supplemental materials that the institution is going to require. Make sure the financial team member is in the meeting or on the call that can anticipate the questions, and give the key players the answers, or provide them as well?

The trick of getting funding sources interested in your business is thorough preparation, anticipation, and knowledge regarding what the audience wants to hear, is going to ask, and what those materials are going to be, and what the information is that they are looking for. Never give them too much until they ask for it, but getting it to them immediately. If the company can’t turn around what the institution requires in less than 24 hours, it just looks bad. Institutions don’t like it when a business runs a bad process towards raising capital.

Lantern Capital Advisors believes that entrepreneurs should surround themselves with people that represent their best interests. If a venture capitalist invests in a company and takes over control, they typically will insert their own people in key positions of the company in order to protect their investment. Those people work for the company, but they represent the investor. Just like your corporate attorney and tax accountant care about your long term protection and assets, your corporate finance advisor should represent you as well (not the funding source)!

What types of people do VCs insert into your company? The types of people that most companies don’t have as part of their team. Typically a VP of finance type of person; someone that goes beyond managing the books, and running the back of the business. These individuals can get results very quickly, are skilled at coming up with things such as pricing and selling strategies, or how to position a product, based on their experience with other companies. Sometimes VCs insert in a part-time CFO, that typically juggle multiple companies, and are very aligned with the goals and objectives of the investment firm, and their own personal investment in that company as well. Entrepreneurs should look to get that team member in place along side their tax accountant, attorney, and business coach.

Most of the time, these skill sets and the compensation required for a full time employee are outside of the budget parameters of a business. Enter Lantern Capital Advisors. The objectives and skill sets of investors should be exactly what the entrepreneur looks for when looking for a partner to help them raise capital to grow their business, except they are looking out for your best interest, your bottom line ownership, and your investment. Your partner should work towards achieving your business objective, and help you navigate the corporate finance landscape to get there. Just like hiring the best accounting firm, attorney, or money manager to serve and represent your best interest (they don’t take “a cut” of your success), Lantern is a trusted business advisor to entrepreneurs and companies that need help navigating the corporate financial world and serves as a corporate finance expert as it relates to the company and all things financial, venture capital, and banking.

There are investment bankers and brokers that work on a success basis, but Lantern Capital Advisors has a different business philosophy regarding working with clients. We specifically work with high growth clients that want to hit the ball out of the park, and want to maintain control of their company while doing so. We serve as an hourly based corporate financial consulting firm that rocks at helping companies plan for and raise capital, and we do so as if it is our job for the company that we are working with. We look at ourselves as an outsourced CFO that is an expert at helping companies realize their potential and at raising capital. We are experts at knowing the capital markets, and matching the right institutions to our clients.

Visit the Lantern Capital Advisors Website for more information on Corporate Finance and Corporate Financial Planning

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.

Follow Jennifer on Twitter

Rent The Runway Disrupting The Business Model

Wed, 16 Feb 2011 11:23:49 -0500

I have to admit, I am a pretty dress type of woman. I love watching the red carpet more than the awards show, and I would rather invest in quality than quantity. I know that when I plunk down my American Express for the once in a lifetime dress, it’s really just for that occasion, although I readily acknowledge that the chance for me to wear the eggplant Badgley Mischka gown is slim to none outside of the Mardi Gras Ball that I am purchasing it specifically to wear. And, I felt that I “saved” money, even though spending $795 on a $1400 dress is not saving. It is beautiful, and I felt stunning when I was wearing it, and everyone stopped me throughout the evening complimenting me on how beautiful it was. We socialize with the same set of friends, year after year, and our dress up attire is more along the lines of making sure we grab a shower between tennis matches and basketball games on the weekend, so when I get to dress up for an occasion, I want to look great, and not exhausted. Just the other day, I told my husband that I was in the mood to wear it again, so he needed to find some charity function fancy dress party with people we don’t know and didn’t go to the Mardi Gras ball with, so I could wear it again, and this time remember to take a picture!
But for now it hangs, in my big closet filled with beautiful dresses, that I’ve worn once. I’ve assembled quite a collection, and my friends come over to “borrow” when they have special occasions of their own. I also admit that I’ve never “borrowed” a gown from a friend, as they don’t make the same investments in fashion that I do.
Which is why, when a friend of mine forwarded me the link to www.renttherunway.com, I inquisitively clicked on it, and the doves flew out of my computer screen....Dress Salvation!
I love retail. I love technology. I get excited when people transform the typical business model to sell stuff online.
Enter RentTheRunway.com. In case you haven’t heard of it, Rent The Runway is the frugal fashionista’s answer to looking like a million bucks without having to spend it. I know that if I go to the couture department at Nordstrom’s, Saks, or Neiman’s, any dress that I dare to try on is going to look fabulous. And as is my life, the one that I love the most costs the most. However, with RentTheRunway.com, customers can “rent” a beautiful gown, dress, and jewelry for $50-$200, which gives them four days and dry cleaning ($5 for insurance for the god-fearing wine spillage, and $12 for two way shipping). Offering customers designers like my love Badgley Mischka, D&G by Dolce and Gabbana, Escada, Missoni, Herve Leger, Tracy Reese, Vera Wang, and Nicole Miller (to name a few), fashionistas inspired by the Real Housewives can select their dream dress, a second back up dress for the same rental period (for an additional $25), and have “an extra size” in the same dresses to ensure the dress fits (for free!)! Two dresses for the weekend! One for the rehearsal dinner, one for the wedding! And in my Oprah Winfrey approval voice, “Brillant!”
Customers then can also select stylist recommended jewelry, couture handbags, and that back up dress for $25, and purchase undergarments, and complete their transaction. All in, $135.90 for two one hit wonder dresses of designer proportions vs. $750. Love it! I just saved $500!
This is surely a company that is going to experience growth, just by getting the word out. No woman wants people to think she’s renting her dress, or jewelry. And Needless Markup probably doesn’t want to order the same fabulous dresses that Rent The Runway is going to offer up for rent during the same season...but I see explosive growth for this company, all based on disrupting the business model, and by offering a revenue model that works for their customer base.
I’m sharing a really good secret, because, in a way, that’s really got to be one of the key drivers for growth, and I want this company to stick around without having to give it all away.
Love it.
-Jennifer Mooney

Visit the Lantern Capital Advisors Website for more information on Corporate Finance and Corporate Financial Planning

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.

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Did Borders Not Explore The Future?

Fri, 11 Feb 2011 13:58:56 -0500

I hate to tell you, “I Told you so.” But I told you so.
Today’s Headline Breaking News: “Borders Bankruptcy Filing Expected as early as Monday or Tuesday. Borders Plans To Close about 200 stores.”
“Movement in a new direction helps you find new cheese.”
Everyone else was heading in that direction, if you can’t develop the app for that, then the mice will go elsewhere. Even the Catholic Church this week developed an “App for Confessions!”, although the Vatican announced today that they aren’t completely okay with that. I wonder if anyone in their strategy session dreamed about a subscription based book rental service? Would have, should have, could have... and it’s not the public library...
Napster partnered with BestBuy to create a subscription service (probably exploring the Netflix strategy) for music, commercial free, instead of an illegal pirated music scenario of their beginnings.
Netflix is the Microsoft of new technology devices, you can use it on your Wii, Xbox, Samsung TV, BluRay players, and just about any other new device that is coming out.
Barnes and Noble’s Nook “me too” strategy at least on the surface has plugged some holes in the hemorrhage of brick and mortar retailing, publishing, and music. Frankly, I am not going to be surprised to see that Barnes and Noble will close some stores this year as well (and develop smaller, less gargantuan spaces, as the need for a brick and mortar presence will diminish as more and more people convert to using their IPads, Nook, Kindles and cell phone gadgetry.
Meanwhile, Apple celebrates it’s 10 billionth app download, and is the all in one destination for music, movies, and literature. You can even play Netflix on their new $99 AppleTV or iPad, even though Apple would prefer for users to use the iTunes library. Brick and mortar isn’t going away though, but just expect to see more “partnered” locations using less square footage. Think coffee house/bookshop/Apple Store.
Publishing should have more profits if they can figure out how to transfer knowledge more towards an electronic distribution, and tighten up the infrastructure. College textbooks are even going to be going down the path of iPad distribution.
In our office, we’re printing less paper. I can’t tell you when the last time I purchased a DVD or CD...downloading all media these days in our world, but I assure you, our costs are transferred elsewhere as we are getting larger monitors and more technological gadgetry. Sure, it’s cooler, but it also creates less clutter...
“The Quicker You Let Go of Old Cheese, The Sooner You Will Find New Cheese.”
In the age of consumers buying less, it is important for all companies to think ahead....ask your team “Where are we heading? Is the world changing in a way that is going to affect what we are doing in five years?” How are we going to be doing it?
Dream it. Explore it. Plan it. Develop it. Be ready. Be first. Grow it. Get out in time, and God help you if you are late to the game, or refuse to get onboard. I sure hope Apple is developing a solar powered iPad charger.
Learn from the tombstones of failure...Blockbuster, and now Borders.
The mice will keep moving the cheese, and you’ll know how to find it before everyone else, because you were never afraid to explore What If.

Visit the Lantern Capital Advisors Website for more information on Corporate Finance and Corporate Financial Planning

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.

When Is The Right Time To Sell Your Business

Wed, 9 Feb 2011 12:01:36 -0500

One of my favorite shows is “The Office”, I’ll leave the humor out of this post, but the show only exists because the original creators took a chance at producing “something new”. Does anyone even care or know what they did before? What made Simon Cowell so famous in the United States was not producing Teletubbies, but telling contestants the truth on the hit show, American Idol. He’s onto something new now, and we’ll probably all take some time to watch.
Business is picking up. Things are looking good. Your sales team has really delivered. But you wonder, is now a good time to sell your business? How does one do that exactly?
Are you ready to do something new, personally? Has the seven year itch gotten your interests peaked in a new past time, something that is going to consume the void where your business has lived.
Is your team comfortable with trying to roll out new products and services? Do you have an army working along side you to consider new opportunities?
When is the right time to sell your business?
First of all, you’ve got to ensure that you’ve got something worthy of selling. Have you done enough corporate financial planning to realize your potential? That EBITDA number really matters!
Can your business exist without you there running it? Do you have the ability to “take the summer off” and have things not implode while you are gone?
Can you articulate and then leverage the two most important things required to grow your business? Can someone else do it, besides you? Hopefully you are no longer your number one sales person. Or number two. Or number three.
Are your employees willing to stay after you have left the business? The acquiring company probably is going to want to keep most of them around. Make sure you’ve got plans in place to keep them happy, and productive! Not to mention in place as your backup retirement plan! Make sure you’ve fostered a corporate culture that your employees know that you appreciate that they are smarter than you, that’s why you’ve hired them. You were the risk taker, but they are the future of your business.
Most importantly, understand that your business is only worth what someone is willing to pay at a given point of time. Someone is only willing to pay what they can finance, and at the end of the day, your aren’t going to be paid based on future value, but whether the current state cash flows of the acquiring entity plus your business cash flows can support the consolidated company plus the amount financed to buy you out. Their plans and vision for your business probably surpass your own.
But never forget, deals fall through. Never take your eye off the prize, but be smart about it. Be realistic. It’s always good to have a financial buyer lined up, or a management team ready to take a stab at buying your business, just in case the big spender was a lot of talk, and no substance. Better yet, smarter yet, know the number that each can achieve so if your deal falls through, you’ll have options.

Read:
Download the PDF white paper Corporate Finance: Financial Planning Steps For High Growth Companies

Visit the Lantern Capital Advisors Website for more information on Selling Your Business and Owner Liquidity Strategies

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.

Failure Is Not An Option

Tue, 8 Feb 2011 12:46:03 -0500

If you haven’t seen the ad by Chrysler featuring Enimem, well, we want to share it with you, provided that You Tube doesn’t take it down...
What does your company know about luxury? The finest things in life. Especially when the questions are asked by someone that has never set foot in your business, in your world, in your shoes, in your town. The hottest fires make the hardest steel.
What does your company know about being successful, especially when the talking heads swear that the sky is falling, and that there won’t possibly be anyone left to buy what you are selling. Don’t listen to the heads, listen to your dreams. Listen to your instinct.
Are you going to Hem and Haw about it, or are you going to Sniff and Scurry?
Quickly adapting to change, anticipating what is coming down the path, knowing what you need to do before you even dream about it (or better yet, inventing it before someone else does).
You know your customer. You know what you can do. You’ve assembled the best and the brightest in your industry. You know how you can be the first to anticipate and quickly respond to change.
Provide what your customer needs, when they need it.
Sure, the challenges and obstacles might be difficult, but you know how to Move Your Cheese. Send out your troops to find more opportunities, don’t be afraid to ask and then explore what if, you don’t even know what’s out there unless you step outside.

Read:
Download the PDF white paper Corporate Finance: Financial Planning Steps For High Growth Companies

Visit the Lantern Capital Advisors Website for more information on Corporate Finance and Corporate Financial Planning

-Jennifer Mooney is the Chief Operating Officer for Lantern Capital Advisors and has spent her career working with growing companies to develop and implement corporate strategy and technology initiatives. Jennifer’s background includes management consulting for Deloitte Consulting, Arthur Andersen, and IMRglobal and new media/web development for Hydrogen Media. Jennifer has been a frequent speaker to entrepreneurs, and loves speaking and writing about effective e-commerce strategies and disruptive technologies.