Tag: investment consultant

Early Shopify Investor Bessemer Turned A $5 Million Bet Into $500 Million. It Could Have Been $22 Billion Today

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Shopify’s soaring stock has one venture capital firm looking at a $22 billion windfall that never was.

Thanks to skyrocketing demand for its online business-building tools, the Ottawa-based e-commerce giant has brought a windfall to its public market investors. Its value peaked at $84 billion last week, briefly making it the most valuable company in Canada, and pushing the net worth of its 39-year-old CEO Tobias Lutke north of $6 billion.

But for one of its earliest investors, San Francisco-based Bessemer Venture Partners, the hype around the company is bittersweet. The firm first invested $5.5 million in the company’s initial funding round, and after additional investments built a 26% stake worth $500 million when it went public in 2015. Though as is the typical modus operandi of venture capital firms — hold onto investments while the company scales and cash out following an IPO — Bessemer had redistributed all its shares back to its partners by the end of 2018, when the company was worth $15 billion.

Today Bessemer’s stake would currently be worth close to $22 billion, the firm says. In the past month, Shopify’s share price has doubled after it generated $470 million in revenue in the first quarter, as demand for its online tools has skyrocketed from brick-and-mortar retailers who have been forced online by the COVID-19 pandemic. Founded in 2006, it now has more than 1 million businesses using its platform, which provides a one-stop shop for companies to create websites with payment processing, order fulfillment and ad management.

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By exiting Shopify two years ago, Bessemer left at least $17 billion on the table. “I couldn’t comprehend that they would have this massive amount of success at that time,” says Alex Ferrara, the Bessemer partner who led Shopify’s initial funding round in 2010.

Even though a global pandemic does not factor into the forecast of most investors, Bessemer’s stake in Shopify stands out as a significant missed opportunity in venture investing because it is rare that a venture capital firm would have built such a large stake in a hot startup, says Will Gornal, a professor at the University of British Columbia’s Sauder Business School. “They’re probably kicking themselves.”

Venture capital funds are typically under pressure to post returns on investments in private startups over a relatively short period of time, between five and 10 years, says Gornal. Once a company goes public, a venture firm will often sell its shares back to its own investors, which include pension funds and university endowments, giving them the option to hold their stake in the company or cash out. This kind of mission isn’t conducive to reaping bigger returns that come years after a public offering, like those generated by other tech giants such as Amazon and Google.

Shopify is among a handful of technology companies that have surged in value as the COVID-19 pandemic has forced society to rely on online tools. The big technology firms  Amazon, Microsoft and Google have floated around the $1 trillion valuation mark. The pandemic boosted the rise of newer arrivals, including Zoom, the video-conferencing firm that is now being used not only to connect office meetings but to hold family gatherings. After going public last year, the San Jose-based firm is now worth $44 billion, almost triple its value at the start of the year. Investors such as Emergence Capital Partners, which took a roughly 12% stake early in the company’s growth and says it still holds some of its shares, have had time to benefit from that public-market boost.

Some of Shopify’s early investors were being minted as billionaires even before the pandemic struck, including its CEO Lutke, his father-in-law Bruce McKean, and a couple who invested $750,000 early-on, as Forbes reported in February. But Bessemer is not alone among early investors in Shopify for exiting the company before the height of its riches were truly clear. Felicis Ventures, which invested alongside Bessemer in 2010, has since redistributed its shares back to its limited partners, the firm says.

While Bessemer’s one-time stake in Shopify might prove a once-in-a-lifetime type tech position, Ferrara says the firm will gladly take its realized returns on the deal: between 80x and 100x its initial investment. Says the venture capitalist: “We didn’t have a crystal ball.”

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David Jeans

David Jeans

I’m a staff reporter at Forbes covering tech companies. I previously reported for The Real Deal, where I covered WeWork, real estate tech startups and commercial real estate. As a freelancer, I’ve also written for The New York Times, Associated Press and other outlets. I’m a graduate of Columbia Journalism School, where I was a Toni Stabile Investigative Fellow. Before arriving in the U.S., I was a police reporter in Australia. Follow me on Twitter at @davidjeans2 and email me at djeans@forbes.com

Source:https://forbes.com

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How to Determine Exactly How Much Money You Need to Push Your Business to the Next Level

Too often, entrepreneurs–especially inexperienced ones–take the “luxury” approach to funding, incorporating every bell and whistle into their expansion plan by trying to accomplish all goals at one time. That’s nice, but it’s usually not reality and often forces businesses to be cash strapped because of high debt repayments.

That’s why I suggest entrepreneurs take a three-pronged approach to their expansion planning. This exercise helps businesspeople ruthlessly prioritize their needs and determine what is a must and what is frivolous.

A, then B, then C

Let’s say an entrepreneur believes he or she needs $1 million to make their expansion plans a reality.

Now, write up a plan for that amount. What are you going to do with that million? What are the specific investments you will make? What will your cash flow look like afterward? What does your business, in general, look like?

Now do the same exercise with $500,000. Ask yourself the same questions, as well as anything else that’s pertinent. Can you primarily accomplish the same goals with half the cash?

Finally, do the exercise one more time, this time with a loan of only $250,000. What are the answers to the questions now? Might it be possible to do what you want to do with only a quarter of the original loan?

And the answer is…

No set answer will be correct.

Perhaps your initial inclination that you need $1 million was correct. And there’s a good chance that $250,000 simply won’t get the job done.

But there is a decent probability that the middle option might be feasible, especially if it makes you realize that some of the more frivolous “wish list” things you’d like to do are best set aside for now. Remember, you don’t have to accomplish everything at once, and a scaled-down plan might allow you to better focus on more important things, preventing you from overextending yourself.

Of course, don’t get too stuck on exact numbers. Maybe this exercise will have you realize your plan can go ahead effectively for $790,000. Or $615,000. Or $485,000. Or any other number.

The purpose is to gain some clarity and sharpen your focus–not to mention to allow you to decide what makes you most comfortable and enables you to sleep at night. Don’t underestimate the value of that.

Also, keep in mind the time factor. The larger the loan you seek, the longer it likely will take to receive approval from a lender. The saying “time is money” always rings true, especially in this scenario. You might miss opportunities waiting for lender approval.

Remember, business tends to be more of a marathon than a sprint. You need to pace yourself in all aspects, including financing, to better your odds of finishing the race. Hopefully, this exercise helps you accomplish that.

By Ami KassarCEO, MultiFunding.com @amikassar

 

Source: How to Determine Exactly How Much Money You Need to Push Your Business to the Next Level

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Trust: How do you earn it? Banks use credit scores to determine if you’re trustworthy, but there are about 2.5 billion people around the world who don’t have one to begin with — and who can’t get a loan to start a business, buy a home or otherwise improve their lives. Hear how TED Fellow Shivani Siroya is unlocking untapped purchasing power in the developing world with InVenture, a start-up that uses mobile data to create a financial identity. “With something as simple as a credit score,” says Siroya, “we’re giving people the power to build their own futures.” TEDTalks is a daily video podcast of the best talks and performances from the TED Conference, where the world’s leading thinkers and doers give the talk of their lives in 18 minutes (or less). Look for talks on Technology, Entertainment and Design — plus science, business, global issues, the arts and much more. Find closed captions and translated subtitles in many languages at http://www.ted.com/translate Follow TED news on Twitter: http://www.twitter.com/tednews Like TED on Facebook: https://www.facebook.com/TED Subscribe to our channel: http://www.youtube.com/user/TEDtalksD…

3 Purchases or Investments You Can Make to Save Money on Your Business Taxes

With a little over one month to go in 2019, small business owners should think about purchases or investments that make good business sense and will give them a break on their taxes.

Owners with available cash and a wish list should consider what equipment they need. Or, do they want to create a retirement plan or make a big contribution to an existing one? If they have home offices, are there repairs or improvements that can be done by Dec. 31? But owners should also remember the advice from tax professionals: Don’t make a decision based on saving on taxes. Any big expenditure should be made because it fits with your ongoing business strategy.

A look at some possible purchases or investments:

Need a PC or SUV?

Small businesses can deduct up-front as much as $1,020,000 in equipment, vehicles and many other types of property under what’s known as the Section 179 deduction. Named for part of the federal tax code, it’s aimed at helping small companies expand by accelerating their tax breaks. Larger businesses have to deduct property expenses under depreciation rules.

There is a wide range of property that can be deducted under Section 179 including computers, furniture, machinery, vehicles and building improvements like roofs and heating, air conditioning and ventilation systems. But to be deducted, the equipment has to be operational, or what the IRS calls in service, by Dec. 31. So a PC that’s up and running or an SUV that’s already in use can be deducted, but if that HVAC system has been ordered but not yet delivered or set up, it can’t be deducted.

It’s OK to buy the equipment and use it but not pay for it by year-end — even if a business buys the property on credit, the full purchase price can be deducted.

You can learn more on the IRS website, www.irs.gov. Search for Form 4562, Depreciation and Amortization, and the instructions for the form.

Home Office Repairs

Owners who run their businesses out of their homes and want to do some repairs, painting or redecorating may be able to get a deduction for the work. If the home office or work space itself is getting a makeover, those costs may be completely deductible. If the whole house is getting a new roof or furnace, then part of the costs can be deducted.

To claim the deduction, an owner can use a formula set by the IRS. The owner determines the percentage of a residence that is exclusively and regularly used for business. That percentage is applied to actual expenses on the home including repairs and renovation and costs such as mortgage or rent, taxes, insurance and maintenance.

There’s an alternate way to claim the deduction — the owner computes the number of square feet dedicated to the business, up to 300 square feet, and multiplies that number by $5 to arrive at the deductible amount. However, repairs or renovations cannot be included in this calculation.

Owners should remember that the home office deduction can only be taken if the office or work area is exclusively used for the business — setting up a desk in a corner of the family room doesn’t quality. And it must be your principal place of business. More information is available on www.irs.gov; search for Publication 587, Business Use of Your Home.

Retirement Plans

Owners actually have more than a month to set up or contribute to an employee retirement plans — while some can still be set up by Dec. 31, plans known as Simplified Employee Pensions, or SEPs, can be set up as late as the filing deadline for the owner’s return. If the owner gets a six-month extension of the April 15 filing deadline, a SEP can be set up as late as Oct. 15, 2020, and still qualify as a deduction for the 2019 tax year.

Similarly, contributions to any employee retirement plan can be made as late as Oct. 15, 2020, as long as the owner obtained an extension. This means owners can decide well into next year how much money they want to contribute, and in turn, how big a deduction they can take for the contribution.

You can learn more at www.irs.gov. Search for Publication 560, Retirement Plans for Small Business.

–The Associated Press

By Joyce M. Rosenberg AP Business Writer

Source: 3 Purchases or Investments You Can Make to Save Money on Your Business Taxes

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Measuring The Total Economic Impact Of Unified Endpoint Management

Today, the average IT organization is spending at least 5% of their organization’s annual revenue on IT investments – and the cost of each investment spans far beyond its price tag. Each one needs to be deployed and maintained by IT staff that is grappling with more tools and software products than ever before. Of course, supporting an IT staff comes with its own set of costs and challenges. CIOs, CTOs, and their teams are human resource scarce and spread extremely thin, so the opportunity cost of focusing on one tool versus another has never been greater.

This complexity comes at a time where clearly defined IT strategies that bring about positive impact to the business are non-negotiable. According to IDG’s 2019 State of the CIO report, “62% of CIOs say that the creation of new revenue generating initiatives is among their job responsibilities.” 88% claim to be “more involved in leading digital transformation initiatives compared to their business counterparts.” Net-net, the onus is on IT leaders to streamline efficiencies, reduce total cost of ownership (TCO), and net a return on investment (ROI) for the business.

IT investment decisions driven by real customer data

Forrester has been instrumental in helping business decision-makers overcome their resource, budget, and investment challenges by introducing a Total Economic Impact™ (TEI) methodology. Not only does the TEI take costs and benefits into account, but also the time saved and economic impact of strategic decisions made. Forrester’s TEI assessments are drawn from real client experiences with vendor products and services. The team diligently documents customer outcomes to better understand their positive or negative business impact. Consulting this unique research methodology helps business decision makers justify and future-proof their investments.

Making the transition to unified endpoint management

If your organization is like most, it has a mix of devices that employees use to get work done – whether they’re corporate-liable or supported under a bring your own device (BYOD) program. With 464 custom apps deployed across the average enterprise, procuring a means to manage devices and everything on them (not just apps, but also content and data) has become mission-critical for businesses.

Traditionally, mobile device management (MDM), enterprise mobility management (EMM), and client management tools (CMTs) have been relied upon to get the job done. However, business use cases for devices have become more complex and wide ranging. These shifts are necessitating a tool that makes it possible to manage everything from one place. This is unified endpoint management (UEM).

Commissioned by IBM, Forrester Consulting recently conducted a TEI analysis of IBM Security MaaS360 UEM customers to determine whether they are reducing TCO and netting a quick break-even on their investment. The Forrester team took the time to glean feedback from 19 MaaS360 UEM clients representing financial services, nonprofit, utilities, manufacturing, and professional services industries. These individuals are responsible for managing anywhere from 500 to 100,000 devices for their respective businesses each day.

How UEM from IBM resulted in significant ROI1

Across the 19 clients that were interviewed, Forrester identified the following key benefits. These amount to a three-year 160% ROI and payback in less than 3 months:

  • Endpoint configuration: a 96% reduction in time spend provisioning devices
  • End-user setup: a 47% reduction in time spent getting employees up and running
  • Modern management: $22,960 saved from simplifying their management approach
  • Support ticket remediation: 50% fewer tickets and 55% less time taken to resolve them
  • Security breach remediation: 80% reduction in number of incidents experienced

Of course, these benefits were experienced by a composite organization used to represent the 19 customers surveyed by Forrester. Organizations considering UEM that are actively seeking their own customized TEI assessment can now work with IBMers to do just that. Request your own complementary assessment today to understand whether you can expect a return on your UEM investment, and if so, how quickly you can expect your payback period to arrive.

Request a custom Forrester TEI assessment now

1 The Total Economic Impact™ Of IBM MaaS360 With Watson, a commissioned study conducted by Forrester Consulting, April 2019

John Harrington John Harrington

John Harrington is a Program Director at IBM Security, overseeing product marketing for data security and unified endpoint management (UEM). In this capacity, he works with product managers, product marketers, and account managers to provide guidance for businesses encountering modern cybersecurity challenges. He’s focused on helping clients learn how to establish digital trust and the various ways Guardium and MaaS360 can help them keep their data and endpoints protected. John is also working towards an MBA graduate degree at Villanova School of Business, and spends his spare time exploring the city of Philadelphia with his wife and their two beagles.

Source: IBM Security BrandVoice: Measuring The Total Economic Impact Of Unified Endpoint Management

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Subscribe to our YouTube channel to stay up to date on all of our world-class products and exciting updates: https://goo.gl/YhZF9h To strike a balance between investments and results, teams need to be connected to your business portfolio and have insight into your projects. Enter CA Agile Central and CA Project & Portfolio Management to enable faster development.

Keeping Up With E-commerce: Last-Mile Delivery Service Deploys ‘Ninjas’ In Online Shopping Boom

Packages are piled higher than people at Ninja Van’s biggest sorting center at a freight facility near Singapore’s Jurong port. Southeast Asia’s big e-commerce operator, Shopee, has just finished its “9/9” online shopping sale and says it got a record 17 million orders in one day. Ninja Van now has the task of delivering most of those orders. “We spend months preparing for how much capacity they require, making sure that we change our processes and have enough drivers,” says Ninja Van’s 32-year-old founder Lai Chang Wen.

Today, Ninja Van delivers on average one million parcels a day around the region, deploying some 20,000 full-time delivery staff, who are dubbed ninjas. Ninja Van’s sales in 2017 rose 9% from a year ago to $13 million and Singaporean Lai was inducted into Forbes 30 Under 30 Asia in 2016.

Ninja Van has so far raised $140 million from a group of investors that includes B Capital and super app Grab. “They’ve really been a leader in last-mile delivery. They are today, we believe, the best service in terms of delivery rates. Everything they’ve achieved using technology is driven to increase customer satisfaction,” says B Capital cofounder Eduardo Saverin, who is a director on the company’s board (and cofounder of Facebook).

Today In: Asia

Lai cofounded Ninja Van in 2014 after a stint as a derivatives trader at Barclays and then setting up Marcella, a custom menswear shop based in Singapore. Monk’s Hill Ventures Managing Partner Lim Kuo-Yi remembers passing on Lai’s pitch to invest in Marcella, but was intrigued by Lai’s proposed solution to the firm’s delivery hurdles.

That proposal is now Ninja Van. Its value proposition is providing a more effective way for Southeast Asia’s small and midsized enterprises to deliver their products as e-commerce in the region explodes. Over 150 million Southeast Asians are now buying and selling online, triple the number from 2015, according a recent report by Bain, Google and Temasek. “What Ninja Van has shown in the last four or five years is the ability to grow the business threefold year-on-year,” says Lim.

Ninja Van is one of a slew of companies offering logistics services for e-commerce deliveries such as Lalamove, GoGoVan and UrbanFox. Competing on cost, speed and reliability isn’t enough, Lai says. Ninja Van also works with SMEs to cut costs and expand their markets. Ninja Van in September introduced a program in Indonesia called Ninja Academy that teaches SME owners about social marketing, inventory management, procurement and sales strategy. “A big part of the question around Ninja Van is how do I evolve my customer base to enable the long tail of commerce,” says Saverin.

Ninja Van entered the logistics scene at an opportune time. Photo: Sean Lee for Forbes Asia

Sean Lee for Forbes Asia

Ninja Van also mines its data to find hidden efficiencies. For example, when multiple merchants are buying the same raw material or product, Ninja Van can then broker a deal to buy in bulk for a lower price on behalf of several customers. The same goes for freight space. “We are the biggest purchaser of air cargo across Indonesia,” says Lai.

With as much as 70% of its transactions still cash on delivery, Ninja Van processes more than a billion dollars in payments a year. While processing those payments, it’s sitting on a massive pool of liquid capital. “There’s opportunity there to extend some level of working capital financing to bridge that gap,” says Lim.

Grab’s investment in Ninja Van is the culmination of an ongoing discussion about collaboration. “We kept finding ways to work together,” says Lai, who first started talking with Grab’s cofounder Anthony Tan four years ago about merging their fleets to improve efficiency.

The two eventually decided that having separate, specialized fleets was more efficient than a combined one, but they have developed a special partnership. Grab customers can access Ninja Van on Grab’s app depending on the kind of delivery. Grab deploys its drivers for on-demand pickups and deliveries, but offers Ninja Van as a discount option for less urgent, next-day courier service to SMEs. Grab has already integrated Ninja Van into its service offering in Indonesia and the Philippines, and plans to do so in Vietnam later this year.

Lai, meanwhile, spends much of his time now in Malaysia and Indonesia, where Ninja Van launched in 2015. “The landscape is very exciting right now, comprised of a lot of small merchants selling on marketable channels,” Lai says. But the real prize, he says, lies beyond Southeast Asia. “There’s a lot more global flow,” he says. Lai won’t name any potential partners, but says the U.S. is “definitely a target.”

Pamela Ambler

Pamela covers entrepreneurs, wealth, blockchain and the crypto economy as a senior reporter across digital and print platforms. Prior to Forbes, she served as on-air foreign correspondent for Thomson Reuters’ broadcast team, during which she reported on global markets, central bank policies, and breaking business news. Before Asia, she was a journalist at NBC Comcast, and started her career at CNBC and Bloomberg as a financial news producer in New York. She is a graduate of Columbia Journalism School and holds an MBA from Thunderbird School of Global Management. Her work has appeared in The New York Times, Washington Post, Yahoo, USA Today, Huffington Post, and Nasdaq. Pamela’s previous incarnation was on the buy side in M&A research and asset management, inspired by Michael Lewis’ book “Liar’s Poker”. Follow me on Twitter at @pamambler

Source: Keeping Up With E-commerce: Last-Mile Delivery Service Deploys ‘Ninjas’ In Online Shopping Boom

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Sick of online shopping deliveries that go MIA or take forever? Ninja Van’s Lai Chang Wen saw how traditional couriers were spoiling the experience – so he jumped in to spoil the market. Even though he had zero experience. Catch the series Game Changers on Monday, 8pm SG/HK. Watch catch-up episodes on Toggle http://bit.ly/2nRyB7Q

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