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Gerbsman Partners’ Portfolio Advisory Service helps senior lenders and institutional investors uncover the early warning signs of distressed companies in their existing portfolios. We help our clients limit their downside risk by providing them with the information and strategies needed to intervene in advance of dissolution.
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Benefits
ü Detailed audit report identifying potential risks in investment and loan portfolios
ü Customized action plan to guide intervening parties
ü Maximize shareholder value and limit downside risk
“Forget about profits, forget about the bottom line, forget about everything except CASH! There isn’t going to be any turnaround if there isn’t any cash.”
Investors and lenders can start to identify trends on the income statement and balance sheet. The company starts missing sales goals, costs begin to rise and financial assumptions become invalid.
The company’s cash and working capital start deteriorating, they start paying their bills late, collections slow, loan balances begin to creep upward, and the company stops all unnecessary capital expenditures.
Technology Software Emergent Game Technologies Capital Thinking Gentiae Inc. Metreo Inc. Neohapsis Inc Technion University Telecom Dialpad, Inc. Simpler Networks Storage Cornice Inc. PhaseMetrics Inc. Plasmon, Inc. Networking/Optical Networking Cambridge NanoTech, Inc. Transparent Networks, Inc Network Photonics, Inc. Mobile eBiz mobility YPS Software Teleflip
Medical Devices Cardiovascular, Vascular, Endoscopy Cardiomind inc. Myocor Inc NDO Surgical, Inc. XTENT Inc. Spine Applied Spine Technologies Inc . Respiratory Emphasis Medical Inc. Orthopeadics NovaLign Orthopedic Inc. Opthomology Optobionics - Retinal degeneration. Refractec, Inc Obesity Satiety Inc. - Obesity product
Media/Advertising/Internet Syncapse Active Response Group Inc. MeMedia Inc. Holographic & Biometric Technology Aprilis, Inc./Dow Corning Security NeoScale Inc. Oviso Inc. SciCortex, Inc.
Life Science Puristem, Inc Barnev Inc. Pegasus Biologics Inc Radiant Medical, Inc. Valentis, Inc.
§ Stakeholders/shareholders made a strategic decision that access to future capital would be limited either by the initial investment group(s) or by market conditions
§ A decision was made or implied that existing management could not take the
company forward and/or there were major issues with the business model. § The company(s) typically had 0-6 months of CASH available § The Board of Directors and Shareholders wanted a "Clean" exit (no formal
bankruptcy, settlement of outstanding issues that demonstrate the Board is meeting/has met their fiduciary responsibilities, no potential lawsuits against" Deep Pocket" equity investors and a reduction of the significant time the Board and Shareholders were spending at/on the company)
§ Board of Directors wanted to maximize the value of the Intellectual Property
Example: § Lack of hard assets § Intellectual property (e.g. patents, process) § Senior lender and/or other debt sources § Inexperienced entrepreneurs possibly with little or no operating
experience § No visibility to get to cash break-even in a reasonable timeframe § Unable to access debt or equity financing § The equity sponsor(s) has made the decision that they will no longer
What is it worth? § "The Market" will determine the value. Who cares? § Customers, Competitors, Strategics and VC/Equity groups for portfolio
companies
Critical factors for success? § Domain expertise § Relevant IP/process § Resources and time available for date certain M&A process § Documented due diligence “war room” § Ownership and protection of IP/process