On February 20th, Exceed Network held its “Swimming with the Sharks” event at the luxurious Bank of America tower in midtown Manhattan. The panel was filled with major players, all advising on the nuanced and complex world of partnerships, mergers and acquisitions as well as the importance of planning for a business’s future.
Mark Adjmi, president of Exceed, moderated the panel and started by asking Germano Ferraro, a senior partner at Diesel, about the trait that defined his success. After sharing the story of his start at Diesel, which took place in an Italian club 30 years ago when he met a convincing Renzo Rosso, founder of Diesel Jeans, he said that honesty was the cornerstone of his success. “By being honest with myself and my partner, I have been able to lead an incredibly fulfilling life, both personally and in business.”
Ferraro discussed how he had taken risks in his career when he had chosen to leave his comfortable job and join Diesel as well as when he decided to leave Diesel but was lured back by a partnership with Rosso. Adjmi asked him to elaborate on when he thinks people should take risks in their career. “Making a move is very personal,” said Ferraro. “I knew because I knew. You must listen to your gut. The moment you aren’t happy, you need to ask why and then move from there.”
John Stewart, a 30 year veteran of the financial world, was up next. Director of Mergers and Acquisitions for Merrill Lynch, Stewart provided sound and in-depth advice about the acquisition and sale of companies. He said that people should look at him and his peers as people to help navigate shark infested waters. “What we do is help people deal with the sharks. My job is to help guide our clients through the processes of mergers and acquisitions. These include raising money, dilution, maximizing outcomes, returns and much more.” Adjmi asked Stewart what steps a company can take to ease the process of selling themselves. “The most important advice we give business owners,” said Stewart, “is to step back from the daily COO position of the business and become a chairman of the board. You must look at the business as an investment and make sure you understand the value of the company within your industry’s landscape.”
Adjmi then asked how a company can value themselves honestly and when the right time to value themselves is. “The sooner the better,” said Stewart. “The ABCs of valuation are current cash flow and future cash flow. Beyond that, each business has its own unique characteristics. Getting a third party like an investment banker to help you enhance your valuation and your understanding of where you stand can help tremendously,” said Stewart. “I have worked with clients five years or seven months before a sale. Any form of planning is great but the sooner, the better.”
The panel then turned to Tim Barney, Managing Director at Bentley Partners, an investment bank that works with Merrill Lynch clients. Barney, in his words, “sells private companies and raises money for private companies.” He dovetailed off of Mr. Stewart, a close friend and business associate, by reiterating the importance of preparation. “For everyone in this room, the journey of preparation should start tonight.” He then discussed the often overlooked but extremely important discipline of keeping detailed financial records. “From day one you must record your finances and make sure you are working with best-in-class technology and financial systems. This will make your company far more attractive to potential buyers.” He explained how every company should go through the discipline of making budgets, monthly and annual plans, and test the company’s finances against those plans. “All of that record keeping allows you to be bulletproof when you ultimately decide to sell your company. You will have excellent historical data to share with a potential buyer and easily be able to prove your growth and worth.”
The panel finished with Harry Adjmi, CEO of One Step Up, a major clothing and holding company. Mark Adjmi asked Harry about his various partnerships and how they are structured. “The first thing to know,” said Harry, “is that not every great looking opportunity will work out. Whether it’s a person with a great resume or a business opportunity, despite looking good, it won’t always work. However, as long as you’re doing more good deals than bad, you’re ahead.” Harry then discussed his love for people and how they are the biggest factor in creating a strong business. “I think the most important thing about going into a partnership with someone, be it a profit share, a partner, a bonus, is that the person in charge, the person originating the deal, needs to make sure the other person is fulfilled and supported. If that person needs to open a letter of credit to Walmart for a million dollars, they need to know that it’s going to happen. Support between coworkers and partners is absolutely key.”
Harry concluded the panel discussion by sharing some great general rules for business. “I believe in sharing. No one person can do it alone. When you think you’re giving, you are really getting. Also, respect in the workplace, from the janitor to the vice president, is a top priority for me. Everyone has a family to go home to and they must be treated with respect. And, a company should have an incredible and accessible CFO. If I am going to partner up with someone, I want them to have full access to my CFO and vice versa. There should be no secrets in a partnership.”
The evening ended with closing remarks from the evening’s host, Morris Betesh, and Exceed Network’s Executive Director, Irwin Dayan. Mr. Dayan urged those in business or wanting to start a business to take advantage of the free advice, events, and incubator opportunities that Exceed offers.
To learn more about Exceed Network, please call (888) EXCEED-2 or email firstname.lastname@example.org. You can also follow them on Instagram and Facebook @ExceedNetwork.