Last week, Welch LLP held an Executive Lunch & Learn for the Canadian Society of Association Executives entitled, “Workforce of the Future: How NFPs and Associations are Embracing the 4th Industrial Revolution”.
Margo Crawford, President & CEO of Business Sherpa Group, joined WelchGroup President Candace Enman, to discuss some of the key changes that SMEs are seeing in their organizations due to the advancement and adoption of technology, information and big data.
These advancements have also brought changes in the labor market. Specifically, organizations today are rethinking their business and workforce models in order to remain competitive and sustainable. The rise of the virtual or independent contractor workforce is gaining momentum and comes with many benefits and challenges for all involved. We would like to thank everyone for coming out!
When they aren’t prepping for the next Championship or walking down the red carpet, celebrities are becoming increasingly engaged in the start-up world. No longer are they just endorsing brands and collecting royalties; they are the ones writing the cheques and rolling up their sleeves in an attempt to cash in big in the hottest disruptive industries and companies.
It seems like an obvious fit; celebrities can tap into their existing fan base and use social media and their star power to quickly create markets and sales channels for companies and their products. Customer acquisition is becoming increasingly efficient – where a simple Instagram post can generate large, immediate and measurable increases in sales. Also, the line between Hollywood and Silicon Valley is increasingly blurred as celebrity entertainers, actors and rock stars are turning to technology investments, while at the same time, famous start-up founders are becoming celebrities of their own as part of main stream pop-culture.
We’ve already seen huge celebrity business success stories with the likes of George Clooney’s Casamigos and Jessica Alba’s The Honest Company and in an economy increasingly fueled by technology, the excitement around being part of the next big thing is too much to miss out on for some celebs, let alone venture capitalists looking for the next unicorn.
So, in that context, here is a glimpse of a few recent celebrity investments and the companies and industries they are investing in.
Snoop Dogg – Fintech/Payments:
No stranger to start-up investing, rapper/actor Snoop Dogg recently became a shareholder in Klarna (www.klarna.com), a $2.5 billion Swedish company that has developed an online payment platform designed to make online shopping easy and hassle-free. The company’s payment platform offers in-store, mobile and online payments with features like ‘Pay-Now’, ‘Pay Later’ and ‘Slice it’ that aim to enhance the shopping and check-out experience.
According to CB insights, investment in early stage fintech companies is at a 5 quarter low, however the total number of deals and total funding as at Q3 2018 was still on track for an all time high. What this likely signals is that as market forces and time shake out the winners and losers, it becomes increasingly obvious which companies can execute and which ones don’t. As a result, the risk profiles and line of sight on future profitability becomes increasingly clear. Therefore, investors’ dollars, including Snoops’, are being directed towards bigger companies targeting bigger funding rounds.
Kevin Durant – eSports:
Golden State Warrior, Kevin Durant added Vision eSports (www.vvpllc.com) to his growing list of tech start-up investments as part of a $38 million dollar round last year. Vision, a holding company based out of Beverly Hills, invests in eSports companies and is also in the business of recruiting and developing professional esports ‘athletes.’
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Despite professional gaming’s massive increase in popularity over the last few years, it’s still an industry vertical that isn’t widely understood outside of a small demographic and even within the industry, there appears to be differing opinions about what eSports is. At its core, eSports is a form of competition using video games – where the field of play is on the computer screen. It’s also the fastest growing spectator sport in the world, already outpacing the NHL in viewership. A professional athlete’s involvement in eSports like Durant’s can serve to be a direct influence in helping to pivot their pre-existing interest of their fanbase towards gaming – all in an effort to make eSports more mainstream.
Joe Montana – Cannabis
San Francisco 49ers football legend, Joe Montana recently cut a cheque for $75 million for an investment in Caliva (https://www.gocaliva.com), a San Jose based cannabis retailer and grower. The company is expected to use the investment to grow their product portfolio and expand its reach into California though retail, wholesale and direct to consumer channels.
The opportunities in the US for companies operating in the cannabis industry are expanding as the lines between medical and recreational marijuana continue to blur. In an effort to further differentiate the company and brand, Montana is helping to position Caliva around its focus in making a positive impact on America’s opioid abuse epidemic with the aim to provide relief to people fighting the addiction. As Caliva positions themselves for growth, it’s an apparent and significant advantage for existing marketing participants to invest heavily in supply chain and distribution infrastructure to ensure that market share can be quickly captured once changes in legislation help to create it.
Some start-up CEOs state that they don’t want investors for the sake of having investors indicating that the relevance of having celebrity investors is purely ego-driven. However, the distinctions between a celebrity investor as opposed to a fund or high net-worth individual are relevant. If Montana, Snoop and Durant are any indication, their ability to raise the profile of the companies they invest in (either to drive revenue, to encourage additional investment, or to leverage their followings) should not be underestimated.
As a result, a company that raises funds through celebrity investment accomplishes the goals of raising cash, generating global interest and acquiring clients. Furthermore, high-profile individuals can make unique and valuable contributions to companies because of their rare skill set, life experiences and understanding of what is takes to be the best on the planet.
However, with any start-up, big funding does not automatically translate into commercial success. In most cases only a rare few ever turn into long term, sustainable companies so for now it’s a bit of a waiting game for Montana, Snoop and Durant to see who will come out on top.
• Goldman Sachs Global Investment Research
WelchGroup Consulting Inc. (“WelchGroup”), a subsidiary of Welch LLP, is pleased to announce that it acted as an Independent Financial Advisor to the Special Committee to the Board of Directors of Dynex Power Inc. (TSXV: DNX), a leading, high power semiconductor company whose operations are in the United Kingdom, to provide a fairness opinion of the privatization transaction with Zhuzhou CRRC Times Electric Co., Ltd (“CRRC Times Electric”).
WelchGroup was selected a part of a competitive process for the engagement, whereby CRRC Times Electric, or one of its affiliates, will acquire all the DNX’s common shares that it does not already own for $0.65 per share in cash. CRRC Times Electric currently holds approximately 75% of the issued and outstanding common shares in the capital of DNX.
WelchGroup is an advisory firm that helps companies understand, build, and capture value.
Our clients value our seamless and integrated approach – leveraging our global network of professionals who are skilled in multiple disciplines – to help them make informed decisions, improve operational performance, and maximize company value.
As we celebrate 100 years in business, we continue to seek opportunities to enhance the services we provide.
The discounted cash flow (DCF) method is a widely adopted methodology for the valuation of public and private companies in Canada. The following blog article explores how this methodology, as well as other valuation methodologies, are applied in practice and whether certain methodologies are more appropriate than others for differing valuation purposes. In particular, we explore why certain methodologies, and not the DCF, appear to be more common in the areas of tax valuations, matrimonial and commercial litigation, and whether this promotes more accurate and reliable business valuations.
A Background on the DCF
The DCF was born from finance theory. Following the stock market crash of 1929, DCF analysis gained popularity as a valuation method for stocks. Irving Fisher in his 1930 book The Theory of Interest and John Burr Williams’s 1938 text The Theory of Investment Value first formally expressed the DCF method in modern economic terms.
If so, what is your workforce strategy to access the best talent?
If I were to poll 100 business owners, I would predict that over 90% would say that their people are their greatest asset. I am confident they would also say that one of their top concerns is talent management. And that is something I can understand, as the pursuit of top talent is more competitive than ever and with technology advances, skills shortages, and an overall desire by the workforce to work less/have more flexibility it is every business owner’s pain point.
Workplace culture can make or break an organization. It comes as no surprise that it has a tremendous impact on productivity, morale, and overall happiness of employees. Both WelchGroup and Klipfolio are recognized for their ability to offer their employees a family dynamic, with social initiatives, flexibility, and career growth opportunities at the forefront of their organizational cultures.
Although similar, there are many differences between the 100 year old professional services firm and the rapidly growing SaaS startup. Similar to WelchGroup, the Klipfolio offices offer tons of natural light, an open concept, and flexible work hours. But what sets Klipfolio apart is an office anointed with whiteboard walls, multiple espresso bars, bright colours, and the occasional visit from their Chief Cuddling Officer, Bentley the bulldog.
So, the two companies set out to discover what happens when you take a team and drop them into an exciting new atmosphere for a day. The answer is simple. Collaboration, cross pollination, team building, open discussion, and increased productivity.
A process that started two years ago finally came true this September; I took ownership of a Tesla Model 3. I am not a “Car Guy” by any means, I just don’t get excited about cars. I simply view them as a means to get from point A to point B. Ideally, I would not even own a car. However, as I sit in my new Tesla with all of its cutting edge electronics and its sophisticated simplicity, I can see the future, and the combustion engine is in the rear-view mirror.
We got a glimpse of the future in 2016, when our firm was hired to market the sale of an electric vehicle charging technology. While soliciting interest from international companies, we began to see the transformation that was taking place in the market. Companies were spending billions of dollars in an attempt to win the electric vehicle “arms race”. What was particularly noteworthy was that they were not all traditional automotive companies. Technology and engineering companies like Google, Uber, and even Amazon had all recognized the growing market opportunity and were joining the parade.
WelchGroup Consulting (“WelchGroup”), a subsidiary of Welch LLP, is pleased to announce that it acted as the exclusive M&A Advisor to GAL Power Systems (“GAL Power”), an Ottawa-based leader in providing critical power and temperature control solutions in North America, on its sale to Florida-based Private Equity firm, Trivest Partners (“Trivest”).
If you ask any entrepreneur or executive who has made the leap of faith to sell their business, it can be one of the most exciting, rewarding, and difficult journeys of their professional careers. You have invested your life into your business and have created an immense amount of value. However, how can you ensure that your business can go through a sale process without losing its key value along the way?