From Lawyer to Advisor

After three years practicing as a transactional lawyer at a large international law firm I decided to make a career change. In January 2019 I joined the mergers and acquisition team of WelchGroup Consulting. In essence, I moved up the deal chain.

As a lawyer, I had lots of experience working with business advisors but did not understand the value that they bring to clients. To me, the broker was just making a couple of phone calls to find a buyer and then stepping aside. My perception could not have been further from what WelchGroup does for its clients.

This perception was due to the fact that lawyers are often brought into the transaction once a letter of intent has been signed or is at least nearly settled. They don’t necessarily appreciate the work that has been performed to get to that point of a deal. To get to this point the broker has worked closely with the client to understand the business that is being sold, the selling shareholder’s priorities, finding a pool of buyers that will ensure the seller’s priorities are met, and running a competitive bid process to find the best Buyer.

As many people who have been involved in the sale of a business can attest, there is often a sense of tension between the various professional service providers involved as everyone tries to demonstrate the value they provide. Having now worked as both counsel and an advisor I can say with confidence that both provide immense value to their clients and undoubtedly, this value is increased exponentially when counsel and advisors work collaboratively for their client.

So, how can advisors and lawyers work together more efficiently?

I think the most important thing is for both parties to respect the role that the other plays and the value they bring to their mutual clients. This can be achieved through an openness to learn and the preparation of learning resources that can be shared with one another. This will help the parties understand the role that each plays in ensure their client’s objectives are met.
In addition, the lines of communication should be open between the parties. Here at WelchGroup we believe our clients are best served by us acting as the project manager. That means we need to be aware of what is happening at all stages of the deal (to the extent it isn’t solicitor-client privileged information). This will ensure that no party is blind-sided at an inopportune moment.

Having worked as a lawyer, I also feel like the deal will run more efficiently if the lawyer is involved earlier in the transaction. They are often given an LOI and expected to draft a purchase agreement in a very short period of time. The challenge is that the LOI doesn’t give them a context of the negotiation or a fulsome understanding of the business that is being bought or sold. As a result, the purchase agreement cannot be sufficiently tailored to the deal. This results in unnecessarily negotiating representations, warranties, and other provisions that are not relevant.

Finally, roles should be defined early in the process. There are certain functions that can be better fulfilled by the advisor or the lawyer. It is important that the two don’t just assume the other will complete certain tasks. These assumptions result in items not being attended to in a timely matter and can result in added stress in an already high stress transaction or even deal delay. An example of this is the preparation of disclosure schedules. There are certain schedules that should be prepared by the lawyer while the lawyer will not necessarily have the information to prepare other schedules. For this reason, the lawyers, advisors, and client should set aside time to identify who will be preparing what schedule, when those schedules need to be completed by and who will be compiling the various schedules.

Always remember that you have the same client and it is your client’s interest that you are both serving. The lawyer and advisor are on the same team and a good team can provide immense value for their client.

Connor McGarry
Associate, Mergers & Acquisitions

Snoop, Durant and Montana – A Quick Look at Their Latest VC Investments

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:

American rapper, Snoop Dogg, aka Calvin Broadus – FashionUnited

No stranger to start-up investing, rapper/actor Snoop Dogg recently became a shareholder in Klarna (, 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:

NBA Star Kevin Durant, Haute Living

Golden State Warrior, Kevin Durant added Vision eSports ( 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.’

eSports audience, prize pool forecasts (2019E- 2022E)
2019E 2020E 2021E 2022E
Audience Size (MM) 194 225 250 276
Prize Pool (MM) $256 $307 $359 $413
Source: Goldman Sachs Global Investment Research

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

Football legend Joe Montana, ESPN

San Francisco 49ers football legend, Joe Montana recently cut a cheque for $75 million for an investment in Caliva (, 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.

Symbiotic Relationships

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
• Pitchbook

To DCF or not to DCF: That is the Question

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.
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Are your Employees your Biggest Asset?

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.

So as business owners how can we adapt and ensure that our workforce remains our biggest asset?
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WelchGroup spends a day working at Klipfolio

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.

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The Future Of Transportation And Why The Electric Car Will Dominate

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.
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The Value of Mid-market Investment Bankers and M&A Advisors

The Value of Mid-market Investment Bankers and M&A Advisors

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?
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The Key to a Locked Box

An alternative to traditional completion accounts & purchase price adjustments

The Key to a Locked Box Header

Doing deals can be an exciting and rewarding process for all parties involved, but in most cases, they require an incredible amount of time, analysis and negotiation to get to the finish line. One of the most contentious issues that continues to plague deals is around working capital – specifically the purchase price adjustments that result from setting working capital targets. If consensus cannot be easily reached, working capital discussions can prolong negotiations, leading to deal fatigue, increased costs and a risk of losing the deal.

To address some of the pain points associated with traditional completion accounts, the use of a Locked Box Mechanism is becoming increasingly prominent, as it can help lead to greater deal transparency, better decisions, and smoother negotiations.
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Canada Olympic House welcomes WelchGroup Consulting

The Canada Olympic House for the 2018 Winter Olympic Games in PyeongChang will not only house Team Canada and all of their excited fans, but it will be opening its doors to two WelchGroup Consulting staff members as well!

Hye-min Lee, WelchGroup Consulting Analyst, emigrated from South Korea to Canada alone when she was just 15 years old. Now awaiting her Permanent Residency, Hye-min applied and was selected to volunteer in the Canada Olympic House. She will have the unique experience of volunteering as a Korean, for Canada, in her home country- a truly surreal opportunity. She is looking forward to meeting all of the athletes, their families, and their friends.

Cody Sorensen, Senior M&A Associate with WelchGroup Consulting, will also be attending the 2018 Winter Olympic Games, but not for the first time. A second generation Olympian, in 2014 Cody competed in Sochi as a member of the four-man bobsleigh team! While Cody traded his speedsuit for a business suit, all of his former teammates will be competing- they are currently ranked 1st and 2nd in the World. This will be Cody’s first time attending the Olympics as a spectator; he will be cheering on his friends from the Canada Olympic House.

Together, they will have the best of both worlds. While Cody will be navigating Hye-min through a unique Olympic experience, he will have the benefit of a tour guide to give him a truly authentic Korean experience.

Go Canada Go!

Watch Out for Working Capital – Part 1

Watch Out for Working Capital - Part 1

You’ve found a target company, made an offer, completed weeks of due diligence, spent countless hours planning for integration and just before you’re ready to sign on the dotted line, the notion of working capital hits the negotiation table. The success of the deal now hinges on ensuring working capital targets, and any potential adjustments, satisfy the interests of both the buyer and seller. It doesn’t matter how big the deal is, at some point, and perhaps initially with no apprehension, you’ll encounter a discussion about working capital during the M&A process.
As advisors we have routinely witnessed the problems that arise from failing to appropriately negotiate working capital targets early in the process. These problems can limit the ability of both parties to come to consensus in other areas of negotiation and can ultimately have profound impacts on the final sale price of the company.

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