Hensarling, past GVP and GM of Oracle JD Edwards, provides due diligence and
advisory services to private equity and venture capital firms. He is
currently engaged as an independent operating partner for Peak Equity Partners.
He has over 30 years experience developing engineering and go-to-market
strategies for software companies.
Part 1: What qualities do you
look for in potential investment opportunities?
What typically happens after a company receives a capital infusion?
There is a saying in our business,
“There’s smart money and dumb money. Dumb money is just money”. It sounds harsher
than it is. Sometimes a company just needs working capital to cash out existing
investors who have lost interest.
For example, a company might have been
part of a 5 year fund that is closing. And maybe that company needs 8 years not
just 5. So money may be all or most of what is required. But sometimes, new
connections through new board members, new perspectives on market approaches,
and new members to the management team go along with the capital. That is what
I call “smart” money – it comes with expertise and understanding of the
Often times, infused capital will be
invested in talent. Good investment firms can bring in a network of people—with
deep understanding in their area of expertise—to the board of directors, advisory
board, or even to operating roles. Getting some fresh eyes and skills on the
problems can have a great effect in moving a company forward.
Because of the Great Recession, it’s
pretty common that many companies have under invested in developing their sales
and go-to-market strategies. If you bring in the right sales management,
marketing, and upgrade the sales force they can once again reach a velocity to
grow fast and create incremental value.
How does Modern Best Practice come into play?
A lot of these companies are at the inflection point where they've been running on QuickBooks or maybe one of the Microsoft Dynamics solutions. And they may or may not have a cloud based CRM solution. Quite often we'll find that the marketing side has no systems. Sales have basic CRM that isn't tied back to the financial side.
We start by having conversations about
opportunities to put such systems in place. This is where cloud based solutions
can add business discipline and modern best practice. If you’re a smaller
organization—maybe 5 to 25 people in the field—and trying to keep costs down, you
need those people to collaborate without flying everybody back to the home
office all the time. And maybe they don’t have a sales operations person in
every region or even at the home office. That’s where the social and mobile components
built into cloud CRM solutions become must haves.
You don’t want to interfere with what
the teams are supposed to be focused on—selling, implementing, and supporting
solutions—but you still need them tied into the systems so that you have
visibility into the status of all those areas without it being onerous.
Cloud solutions for mobile and social
are ideal in areas such as this because they don’t require a big capital
outlay. You can buy what you need now and add
incrementally as revenue grows and you add sales people. It winds up being a
real attractive picture for growing smaller companies.
Part 3: How does Oracle fit into the picture?
Modern Best Practice exploits new capabilities made possible by cloud, mobile, social, analytics, big data, and the internet of things,
making it possible for your organization to achieve more, faster and
with fewer resources. It is flexible, supports growth and innovation,
and enables new ways to achieve consistently superior performance.
The views expressed here are my own, and not necessarily those of Oracle.