Monday Mar 09, 2015

Equity funding for your buyout, startup, spinoff? Executive Insight from Lenley Hensarling Part 3

Lenley 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?

Part 2:  What happens after a company receives a capital infusion?


Part 3

Q: How does Oracle fit into the picture?

Oracle is showing their commitment to investing in cloud solutions. Cloud is driving the disaggregation of software that enables you to decide what specific problems you want to address with subscription based solutions and buy only what you need now knowing that you can buy more later when you need it.

I’ve always been a big fan of encouraging smaller companies to put better systems in place. The cloud and subscription models have made more sophisticated software and more complete solutions available to a much broader set of companies. It used to be that you would say, “You have to be this big before you can put really good financial systems in place”, or “You have to be another step up before you can really start to think about tying sales, marketing, services all together and managing both quality of that and the flow of revenue from the field in that way”.

But now you can decide to be as sophisticated as you need to be to run your business in the right way from the get-go. It’s not a big burdensome thing of putting in a big IT shop. You wind up with companies with a guy who’s running IT part time and the rest of the time providing internal IT support to the development group. These days that development platform might wind up being a Platform as a Service play.

Q: You told me that you moved down valley from Park City to Heber City because, “The fishing season is longer than the ski season”. Tell me a good fish story.

This year I started getting into steelheading. They’re big trout—10 pounds or more—that go out to sea for two years, come back in through northwestern rivers, and swim up river to spawn. My wife loves to fish too so we go on a fishing trip every year for our anniversary. When I told her—I mean suggested—that we were going steelheading this year, she said, “I don’t’ know if I want to do that. It’s a whole new way of casting. I’ll just bring my fly rod.”

The guide convinced her to give it a try and the second morning out she caught a huge fish. That trip, I caught 1 small fish and she caught 2 huge trophy fish. So she has bragging rights for now and she won’t let me forget it. But like the guide told me, “You’ll always be able to go steelheading now. Your wife is hooked.”



Jim Lein

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.



Equity funding for your buyout, startup, spinoff? Executive Insight from Lenley Hensarling Part 2

Lenley 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?


Part 2

Q: 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 technology world.

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.

Q: 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?


Jim Lein

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.


Equity funding for your buyout, startup, spinoff? Executive Insight from Lenley Hensarling


Lenley 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.

Q: What is your role at Peak Equity Partners?

Peak Equity Partners concentrates on buyouts and recapitalizations of enterprise software and solutions companies. We’re most interested in companies that are just past the venture capital stage—not ready to go public and not ready to be sold to another company. My role is to provide advisory services to companies within their portfolio, help identify opportunities for investment, and perform due diligence once a decision has been made that a specific company is interesting. At that phase, we work together to determine the real state of the business—verify that what we think is there, is really there.

Q: What qualities do you look for in potential investment opportunities?

A lot of companies that were on a trajectory to hit success were somewhat derailed by the turn down in the economy. That didn’t mean that what they had wasn’t a good idea or that they weren’t necessarily executing well. The good ones held on—kept the cash flow coming. They got stranded as it were, and private equity is a good vehicle to get them back on a trajectory to deliver their value to customers and to investors.

That ability for a company to deliver value to the marketplace is what we are looking for. Is there a revenue stream? Do they have customers? Is their market of substantial size? Are they likely to get back on a good trajectory and go to the next level with an infusion of capital, advice, and expertise?

Q: How do you find companies like this?

Companies in this situation often hire an investment banker to seek out capital opportunities. There also exists a large network within the investment community. For example, a venture capital firm might have initially funded a company, but for whatever reasons that company is no longer a good fit for their portfolio, or the fund has closed out and their attention is better focused on new opportunities. They still think it’s a good company and the company’s board of directors and management engage with an investment bank to find someone to sell it to.

Private equity firms also proactively look for hidden gems, leveraging their networks and those of their operating partners. The call around and have some conversations. Sometimes those conversations go somewhere and sometimes they don’t.

Part 2: What happens after a company receives a capital infusion?

Part 3: How does Oracle fit into the picture?



Jim Lein

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.


Wednesday Feb 01, 2012

Oracle Partners Worldwide Deliver Expanded Portfolio of Oracle Accelerate Solutions for Midsize Companies

Oracle Accelerate for Midsize Companies continues to gain momentum.

Read the full press release HERE.  

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