“Opportunities multiply as they are seized.”
544 BC-496 BC
Chinese Military General, Strategist, Philosopher.
Author, “The Art of War”
The Future of Transactions is Private
Most private company owners dream of a liquidity event, but most will never attract the attention of Venture Capital and a subsequent cash-in through an IPO. Usually, they’ll be sold to a competitor, private equity, a family office, or the current management team in a private transaction that creates no publicly held stock.
As it turns out, the private transaction markets are where the action really is and is likely to be for some time according to Dr. Scott Galloway in a recent post in his “No Mercy, No Malice” blog. He writes: “The traditional IPO construct is in structural decline, and that’s a symptom of a fundamental shift in the capital markets…… When capital piles in returns go down, and private market investors want to capture the upside previously leaked to public investors.”
This is a profound shift, and every business owner should have at least a passing acquaintance with it. The good news is that it should redound to the benefit of small to medium size companies when it’s time to sell.
The bad news? It may be harder to find publicly held stock with strong upside in which to invest your sale proceeds. ☹ Find out why Dr. Galloway thinks the future of capital is “Private”
RIP “The James Bond of Philanthropy”
It’s common for the great entrepreneurs to become great philanthropists. Steel magnate Andrew Carnegie built libraries across the US and the eponymous Carnegie Foundation endures over a century after his death. The Rockefeller and Ford Foundations continue to distribute their founders’ fortunes to this day. A more recent example is Microsoft founder Bill Gates whose Gates Foundation is the driving force behind many charitable and scientific endeavors.
These businesspeople turned philanthropist garnered so much fame as they built their fortunes that that their philanthropic endeavors were bound to be equally well known. But a notable exception to this rule was recently profiled by Bill Gates in his Gates Notes Blog: Chuck Feeney.
Chuck Feeney?
If you haven’t heard of him, don’t be surprised. Mr. Feeney, who founded airport retail giant Duty Free Shoppers, and later the investment firm General Atlantic Partners, wanted it that way. During his lifetime he was able to give away $ 8 billion but he and his wife lived in a rented apartment, shunned publicity, and conducted his giving activities so secretly that he become known as the “James Bond of Philanthropy.” He also influenced Bill Gates and Warren Buffet to take the “giving pledge” to distribute their fortunes during their lifetimes.
Mr. Gates writes “Chuck had four important traits that made him so special” and greatly influenced Gates own early giving. “I’m grateful I got to learn from him” says Gates. Spend a few minutes learning why Mr. Gates thinks “Chuck Feeney was one of the greatest philanthropists ever. “
While shunning the limelight, he eventually did permit author Conor O’Cleary to pen a book about his charitable work to inspire others. If you have interest in a deeper dive on a great man, check out “The Billionaire Who Wasn’t: How Chuck Feeney Secretly Made and Gave Away a Fortune. ”
Mr. Feeney died last November at the age of 92. RIP, Chuck Feeney. Thanks for showing us what charity is all about.
Jerry Seinfeld, Entrepreneur
We don’t usually think of comedians as entrepreneurs, but if entrepreneurship is doing something new successfully, Jerry Seinfeld clearly fits the bill.
In a recent Inc Magazine article, Mr. Seinfeld’s approach to creating value (comedy) is summarized as “three keys to success which, not coincidentally, are the three keys to entrepreneurial success, and success in any field. “
Econ Recon: A Mild Year with Low Quality Growth
A Mild Year: Inflation surprised and labor costs still raising. ITR Economics’ Brian Beaulieu thinks it means recession…but probably mild. Check out the first 2024 edition of Fedwatch.
Low Quality Growth: Not all progress is created equal and according to Dr. Brian Wesbury, that includes economic progress (i.e. “growth) as well. He notes that while some recent indicators are positive, he worries that to the extent they portend continued growth, the trend may not be able to sustain itself. Find out why he’s concerned about “Low Quality Growth for the year ahead.
A Note From Scott:
Friends,
Happy New Year!
As you seek to grow or increase the value of your business this year, do wish you could get insightful, agenda-free advice from other successful CEOs and business owners? From CEOs who understand you and your business, who ask questions that others don't ask, and offer insightful perspectives others don't have the experience to give?
CEOs and business owners get this advice in my CEO peer advisory group. We have 20 successful, non-competing members from multiple industries who help each other grow faster, profits, and increase their business's value.
If you are interested in exploring if you're a fit for our group please contact me. Typical qualified members are CEOs/owners of southeastern New England businesses with revenues between $10 million and $200 million.
Warm regards,
Scott
