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Friday, July 7, 2017

A Good Entrepreneur Evolves Over Time

Posted By: George Deeb - 7/07/2017

I've been an entrepreneur for most of my life. I started an odd-jobs business in high school, founded a collectible comic-book busin...



I've been an entrepreneur for most of my life. I started an odd-jobs business in high school, founded a collectible comic-book business in college and launched my first venture capital-backed startup -- an adventure-travel company -- in my 20s.  My entrepreneurial endeavors continue today. I'm in my late 40s, running Red Rocket, looking for companies to buy and advising hundreds of early-stage businesses. My approach to managing businesses today is very different than when I was younger. The experience I now bring to the table has materially mellowed me as a leader. But, I didn't have that background or that perspective when I was younger.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.


Wednesday, July 5, 2017

5 Considerations When Setting Your M&A Goals

Posted By: George Deeb - 7/05/2017

Over time, merger or acquisition opportunities may present themselves as a growth opportunity for your business.  As I have discussed in...



Over time, merger or acquisition opportunities may present themselves as a growth opportunity for your business.  As I have discussed in the past, M&A can be very distracting to an early-stage business still trying to optimize their stand-alone business.  Especially when things can often go awry in merging businesses, management teams and employee cultures.  But, assuming you have done your homework on those fronts, and you are comfortable in taking the leap into world of M&A, here are five considerations when setting M&A goals for your business.

Read the rest of this post in Forbes, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.


Thursday, June 29, 2017

Raleigh-Durham Private Equity Firms

Posted By: George Deeb - 6/29/2017

Following up on our list of Raleigh-Durham Venture Capital Firms & Angel Networks , below is a list of private equity firms in the r...



Following up on our list of Raleigh-Durham Venture Capital Firms & Angel Networks, below is a list of private equity firms in the region, serving later stage companies.  I included a high-level summary of their investment criteria, as communicated on their websites.

Aiglon Capital Mgmt. --  mfg., dist., svs., $20-$250MM revs, $2-$20MM EBITDA.

Capitala Group --  diversified. $3-$10MM checks, under $4.5MM EBITDA, $1BN fund

Cherokee Fund --  brownfield real estate, $2BN managed + VC in env./energy

Davie Poplar Capital --  health, educ., med., svs., mfg., dist. Up to $20MM revs, $500K-$3MM EBITDA, recurring revs., capex light.

Eli Global --  fin., health, ins., mktg., other.

Halifax Group -- biz svs., franchising, health, infrastructure.  $5-$30MM EBITDA, $25-$75MM checks, $50-$250MM valuations.

Hargett Hunter --  hospitality, restaurants.  $10-$30MM checks. $150MM fund, 5-50 stores.

Hawthorne Capital --  health, tech.  $3-$20MM checks.  $2-$100MM+ revenues.

Investors Management Corp. --  diversified, franchisable.  $5-$25MM EBITDA.

Morgan Creek Capital --  health, energy, nat. resources.

Mosaic Capital Partners --  biz svs., chem., CPG, env., food/bev.., health, dist., mfg., log..  Over $10MM revs, reliable cash flow.

NovaQuest Capital Mgmt. --  life sciences, health.  $1.6BN mgd, $20-$100MM revs, up to $500MM valuations.

Plexus Capital  --  diversified.  $950MM mgd., $12MM average check, middle market.

Triangle Capital Corp. (TCAP) --  mfg., dist., transport, energy, comms., health, restaurants, other.  $5-$50MM checks, $20-$300MM revs, $5-$75MM EBITDA.


OTHER PRIVATE EQUITY FIRMS IN NORTH CAROLINA (INVESTING IN REGION)

Blue Point Capital Partners (Charlotte) -- eng., env., ind., metals, dist.  $20-$300MM revs, over $5MM EBITDA.

Cadrillion Capital (Charlotte) --  info., health, agric., biz svs., fin., other.  Over $1MM EBITDA.

Carlyle Group (Charlotte) --  aero., defense, govt., cons., energy, fin., health, ind., RE, tech, biz svs., telecom, media, transport.  $53BN mgd., $130MM average check.

Carousel Capital (Charlotte) --  biz svs., cons. svs., health svs.  Over $3MM EBITDA,  up to $150MM valuation.

Coleville Capital (Charlotte) --  mfg., dist., biz svs., diversified, ind.  $10-$100MM revs, $2-$6MM EBITDA.

Copeley Capital (Charlotte) --  health, svs., bldg., waste, ind., CPG.  Over $2MM EBITDA.

Falfurrias Capital (Charlotte) --  cons., food/bev, biz svs., fin., mfg., ind., energy, health.  $3-$25MM EBITDA.

Fidus Investment Corp. (Charlotte) --  diversified.  $10-$150MM revs.

Five Points Capital (Winston-Salem) --  biz svs., ind., mfg., dist., health, educ., tech., mfg.  Over $3MM EBITDA, $5-$25MM checks.

Global Endowment Mgmt. (Charlotte)  --  manage money for foundations

Kian Capital (Charlotte) --  biz svs., dist., health, mfg.  $5-$15MM checks, $15-$150MM revs, $2-$15MM EBITDA.

Pamlico Capital (Charlotte) --  biz svs., comm., health, tech.  $15-$200MM revs, $20-$100MM checks.

Ridgemont Equity Partners (Charlotte) --  ind., svs., health, energy, telecom, media, tech.  $25-$100MM checks, $5-$30MM EBITDA.

Salem Investment Partners (Charlotte) --  biz svs., mfg., CPG, dist., recurring revs.  $1MM+ EBITDA, $10MM+ Revs, $2-$10MM checks.

Tidewater Equity Partners (Wilmington) --  mfg., svs., tech, fin., energy, retail, health.  $10-$30MM revs, $1-$3MM EBITDA.


Be sure to dig deeper on their websites to make sure they invest in your specific industry, revenue stage, geography and desired minority/majority deal structure before reaching out to these investors. Red Rocket can help make introductions to many of these investors, so please leverage our relationships here.

For future posts, please follow us on Twitter at: @RedRocketVC




Thursday, June 22, 2017

Lesson #269: Want Hard Workers? It Starts With You!

Posted By: George Deeb - 6/22/2017

Startups require a lot of hard work, with no rest for the weary.  And, since you need to be moving at light speed to gain first mov...



Startups require a lot of hard work, with no rest for the weary.  And, since you need to be moving at light speed to gain first mover advantage, it often means a lot of late nights in close quarters alongside your fellow team members.  Not everyone can thrive in that type of environment.  But, it is important the founding team can, as capital will be tight, and you will need to stretch your human resources as far as you can, without breaking the bank.

RECRUIT THE RIGHT PEOPLE

You want a hard working team?  It all starts with recruiting the right people out of the gate.  In addition to seeing if they have the right skills for the job, you have to see if they have the right attitude and hard work ethic for the job.  And, don’t take their word on it, as everyone will say they have the “right stuff”.  You have to talk to their former employers as references, and have them give you real examples of how they have functioned in that capacity in the past.

FOSTER THE RIGHT TEAM CULTURE

Once you have the right people, now you need to surround them by the right types of hard-working peers.  Create a culture of “all for one, and one for all”, prepared to do whatever is necessary to help the company win the race.  Create realistic targets for them to hit by certain dates, and create a competitive spirit within the company, where people can show off their skills.

REWARD DESIRED BEHAVIOR

When people are showing your desired hard-work ethic behavior, reward them.  Give your key team members a piece of the equity.  Give them a gift certificate to their favorite restaurant.  Take them to a ball game.  Create an employee of the month program.  Do whatever you need to do to make sure they know their hard work did not go unnoticed, and was appreciated by the team.

BE SENSITIVE—DON’T PUSH THEM OVER THE EDGE

All work and no fun, makes Jack a dull boy.  Working around the clock can be exhausting.  And, you don’t want the team to burn out.  After a big sprint, let the team take a day off to catch their breath, and spend time with their friends and family, away from the office.  People are human, and you need to foster an even work-life balance, to retain your team for the long run.

DON’T TELL THEM, SHOW THEM

When you have something that needs to get done, it is important you show the team how to get it done, as opposed to simply telling them to do it.  Don’t leave anything ambiguous, that will leave the team spinning their wheels in frustration, not clear on what you exactly need.  When you show them what to do, that leaves nothing up for interpretation, and will more quickly get you to your desired end product.

HOOK THEM WITH YOUR DAILY BEHAVIOR

And, it all starts with you.  If your employees do not see you putting in the hard work you are asking of them, they will never give it to you.  So, roll up your sleeves, tell your spouse you may be late for dinner, and jump into the mosh pit with your team.  That will help you gain credibility as a leader and camaraderie as one of their colleagues, prepared to jump into the trenches of battle. 

So, as you can see, if you are complaining about not having a hard working team, you really only have one person to blame . . . yourself!!

For future posts, please follow me on Twitter at: @georgedeeb.


Thursday, June 8, 2017

Lesson #268: The Art of the Follow-Up

Posted By: George Deeb - 6/08/2017

Given how important good selling techniques are to driving revenues, I am shocked how many entrepreneurs and salespeople are just bad at...



Given how important good selling techniques are to driving revenues, I am shocked how many entrepreneurs and salespeople are just bad at working their leads. This includes things like not following up on leads (or following up too much) and not knowing how to break down barriers, to get the lead to actually listen to your pitch. This post will help you become a master at properly working your sales prospects.

CONTACT THE RIGHT PERSON IN THE FIRST PLACE

If somebody is not getting back to you, often times it is because they are the wrong person in their organization to make decisions about your product or service. So, before you even send your first outreach, make sure the person you are reaching out to has decision making control for your solution. For example, if you are selling a social media management software, it is most likely the head of social media communications at that company—not social media advertising, not their head of marketing, not their CEO, etc. And, if you are unclear who is the right person—ask to be pointed in the right direction, or send outreach to all logical candidates, until you find the right person to engage with you.

MAKE THE RIGHT FIRST IMPRESSION

Another reason people don’t get back to you, is they don’t like what you have to say. Often times salespeople are so excited about the “what” they are selling, that they don’t focus on the more important benefits of “why” a customer would want to buy it. Simplify your pitch to the point you are helping them understand you are selling a need-to-have “painkiller” for their problems, not a nice-to-have “vitamin”. As an example, for the social media management software, it is less about how it integrates with Facebook and Twitter for easy communications, and more about how it will help them double their base of social media followers and help them generate more revenues. So, put on their hat, not yours, to figure out would resonate most with them.

FOLLOW UP IN THE RIGHT FREQUENCY AND RIGHT FORMAT

It shocks me how many times a salesperson forgets to follow up with their old leads. Thankfully, marketing automation software (e.g., Pardot, Eloqua, Marketo, Hubspot) has helped bring automated follow-ups to a formerly manual process. But, you need to know how to program that software with the right business rules. I typically live by the three strike rule within a once-per-week follow-up schedule. So, for example, if you first email them on March 1st, your first follow-up will be on March 8th and your second follow up with be on March 16th. If they don’t get back to you after three tries, it is time to move on, but don’t forget about them. Put them into a long-term nurturing schedule, sending along interesting research or insights that shows them you are smart on their space, for them to want to engage with you in the future. Then you can restart a more direct selling effort again in the following quarter.

And, shake up the methods is which you make your outreach. Email is easy and can be automated. But, it is a lot less personable than a phone call, where they can better hear your voice and personality shine through. And, you never know, you may call and they just might actually pick up their phone. This is particularly effective in the 8-9am or 5-6pm range, while they are most likely in the office, but their assistants are away.

SHAKE UP YOUR MESSAGING

You can only browbeat a person so many times with the same message before it falls on deaf ears. You need to shake up your messaging. Start with an introduction about your business and its benefits to them. If that doesn’t work, send them some interesting market research, that shows you are smart on their space. If that doesn’t work, invite them as your guest to some key industry event. And, if all else fails, everybody loves a free lunch, golf invitation or tickets to the ballgame. An unexpected gift sent to their office also works well, where they will hopefully call to say thank you. Do whatever you need to do, to get them on the phone or to a meeting, to hear what you have to say. Persistence without being annoying is the key here.

BREAK DOWN BARRIERS

It also surprises me that when a salesperson hits a wall, they stop trying, instead of tearing down that wall. For example, if a target lead is not responding to you, try to develop a relationship with their assistant or co-workers. If you get to a dead end with one person in the department, start again with another person in the department. Or, if the CMO won’t listen to your pitch, try calling their CFO to talk about the cost savings or revenue lift they can expect from your product, so the CFO can help you get the attention of their CMO. Or, if there is an entrenched competitor, cut them out of the equation with a materially better price. And, as always, leverage mutual connections -- especially if they are your customers that can help sing your praises as a credible third party. To me, there is no such thing as a dead end -- keep trying until someone gives you a chance.

Hopefully, now you are better armed to put your outreach efforts on steroids -- and drive your qualified sales leads and revenues in the process.  Happy hunting!

For future posts, please follow me on Twitter at: @georgedeeb.



Saturday, June 3, 2017

The Case for Hiring a Re-Founder Before You Pull the Plug on Your Startup

Posted By: George Deeb - 6/03/2017

Oftentimes, startup entrepreneurs are simply too close to their businesses to get a clear, non-biased look at what may be holding it bac...



Oftentimes, startup entrepreneurs are simply too close to their businesses to get a clear, non-biased look at what may be holding it back from ultimate success. Maybe they lack the required skills or business experience required to identify or correct problems inside their product, process or team. More often that not, as a new entrepreneur  “you just don’t know, what you don’t know.” When the problems become material enough to potentially put the company out of business, maybe it is time to hire what I call a RE-founder to help put it back on the right course.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.


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