Thursday, June 30, 2005

I just put my chips on the table (well, I never really took them off)

Got a call from my client's accountant, calling on behalf of the client. This is a good thing, the deal is still in play.

Ah, now it isn't the notification that is a problem, its the fees, specifically my fee (surprise, surprise).

Being a reasonable person it told the accountant that, out of principle, I would not budge on the size of my fee, but I can be flexible on the timing of it. My fee agreement is transparent and in plain english, as is the direction of payment that I have all of my clients execute. The client knew what they were signing

Rather than taking a lump sum, I would be more than happy to have it paid out over time (not a long time mind you, but enough time so that it isn't too painful to the client).

Lets see how it goes. Hopefully everthing I have learned on my past deals, busted or not, has given me some insight into how to handle myself in these situations. Most importantly:

  • Never cave
  • Never let anyone see you get mad

Still Sticking To My Guns

Lots of sticking to things lately.

So it's almost 11 am on the drop dead day of a deal I have been working on for the last little while. No word from my client. The ball is clearly in his court. If my instincts tell me anything, I know he is out searching for "someone who will do him better". See as how this guy scared off most asset based lenders, I know what is out there.

Having said that, there is always the chance that some dildo at one of the chartered bank sends him a letter of interest that causes my client to kill this deal. I know that once the banker spends more than 5 minutes going through the books, they would not give this character a dime in the end, but it is enough to disrupt the financing that I have arranged.

So I have typed up a letter to my client, stating in no uncertain terms, you are a fool if you don't take this deal, you have known the terms for a month, they haven't changed. The real problem with this letter is that while covering my ass from a legal point of view (if my client tries to tell me that I advised him against the deal), it comes across as quite self serving (i.e. Sign the paper so I get paid!). so I will wait until this afternoon in order to fire it off to my client.

Stickin' it to the Man!

Weare, New Hampshire - Could a hotel be built on the land owned by Supreme Court Justice David H. Souter? A new ruling by the Supreme Court which was supported by Justice Souter himself itself might allow it. A private developer is seeking to use this very law to build a hotel on Souter's land.

Justice Souter's vote in the "Kelo vs. City of New London" decision allows city governments to take land from one private owner and give it to another if the government will generate greater tax revenue or other economic benefits when the land is developed by the new owner...

Wednesday, June 29, 2005

So The Blonde is Back in Town (the buzz is back)

After seeing our recent foray into licensing a product flame out over the inability to come to terms on a termination clause (basically the counterparty to our agreement wanted the ability to terminate the relationship without cause, just 30 days notice while we wanted an arrangement whereby we retained the rights to the product unless we miss our sales quota), we have decided to embark on another venture.

So now you get to read about more of my trials and tribulation as we go about developing a product, establishing distribution channels and pumping it out to the public.

The goal of the game is still the same..........making money in a negative working capital situation.

We have found a couple of suppliers who can meet our needs, the next step is to get some samples and go from there.

Things I know I'll never hear

While some people claim to have heard everything, there are some things I know I will never hear:

  1. My customers all suck, their credit is terrible and they never pay;
  2. You really can't trust me to pay you back;
  3. I don't think I gave you enough assets as security, what else would you like;
  4. I'd like to give you my personal guarantee;
  5. My company is so risky, you would have to be an idiot to give me a dime; and
  6. I'd like to pay you more for financing

Quote of the Day

"Bureaucrats write memoranda both because they appear to be busy when they are writing and because the memos, once written, immediately become proof that they were busy."

- Charles Peters

Sticking to My Own Guns

Gotta practice what I preach to my clients.

Trying to wrap up a large deal and it is getting down to the nitty gritty............in other words, the client is now realizing that he is getting close to having to pay me, a decent sized 5 figure fee for putting together a deal that gives him the capital he needs to grow (and keeping all of his equity).


Client has known the terms of the deal for a month and my fee for about 4 months. The client has already paid for due diligence. Dead line for signing back the approval is tomorrow.

And I get that call I always expect.............So, josh how much is your fee again? How did we work it? In other words, will you take a hair cut. This despite the fact that there is a direction of payment and fee agreement already executed.

The initial inclination is to say how can I help you out, you need me to cut my fee a little bit, ya sure no problem. Everyone one wants to be a good guy, its almost human nature. A good way to set yourself up for a big nothing sandwich. This is why I do the opposite of what my instincts tell me. I used to be a good guy

So as I tell everyone else, a deal is a deal, and I will stick to my position. If the deal craters so be it. I'm not afraid to put my chips on the table. My experience has been that it is those that stick to their position are the ones that win.

If you are looking to waste some time and money

Take a look at Pubco so you can "learn all the secrets that no one will tell you" about raising money for your business using the US capital markets, mainly the Pink Sheets and OTCBB.

If you want a much cheaper and less biased way of learning about these markets and the ability of small companies to raise money in them, track down a few CEO or CFO's of companies that trade in these markets and ask them about their experience.

I can think of no better way to paper a deal than by using agreement templates downloaded from the internet (that is sarcasm for those of you not familiar with it).

Tuesday, June 28, 2005

Things to do for tomorrow

1. Finish construction deal
2. Talk to the jam lady out in Picton. Sounds like a tasty deal (bad joke)
3. Touch base with the little pink sheet company that could (or might)
4. Get the approval letter back for that $2 million deal, so that it can fund in the next 2 weeks
5. Start to work on a new project - or maybe revive an old one
6. Find out how to make myself a better person (gag me!).

I know its juvenile

But don't you think Assmann may want to consider a name change.

Not a huge PR buff, but something are just a no no

Just a thot (brain fart!)

Well, I've Never!

Now say that to yourself with a female English accent with a hint of outrage and you will get the theme I was going for.

Here's the story behind it.

We had just sent off a set of our closing documents to our clients in order for them to get independent legal advice, part of our standard procedure. They take the documents to their lawyer, who then tries to send them to another source of financing. After that doesn't work, he writes a half ass legal opinion that isn't worth the toilet paper it was written on.

He actually didn't even bother to review the documents.


Needless to say, somebody is going to get a flaming bag of dog poop on his doorstep in the near future!

Buzz Killer

It's amazing what happens when the momentum of deal comes to a dead stop............that cute girl with a nice ass ( you have to read the last post) all of a sudden fades back into the wall paper.

Here's a familiar story

Just got off of the phone with a company trading in the pink sheets . They were looking for some cash (if you know anything about the pinks this is no surprise).

I asked the CFO how (or why) the company ended up in the pinks. His response was that he didn't know but that the company was filing the required forms to becoming a reporting OTCBB company in order to access funds that one of their advisors had sourced for them. The investor just wanted to read an SEC filing.

Having a little bit of experience in the area, I suggest to the CFO that before they go to the expense of an audit and doing the filings, that they sit down with the investor and find out if he is serious (or even exists to begin with) as most serious investors would do a little bit more due diligence when investing in a small, young company. In other words, make sure your advisor isn't selling you a bill of goods.

Ask the tough questions, as anyone worth their salt will be able to answer them without breaking a sweat.

When it all falls apart!

Fuck! Sometimes that is all you can say. Fuck!

Well I thought we were on our way to licensing a product when the other side decided that we were "negotiating" too much.

At first I thought it was a case of over lawyering a contract on our part, but now I am not so sure.

When we got our first set of samples, we found a few defects in them, but rather than tell the manufacturer to go blow (as in your product sucks), we told them what the problem was and gave them an opportunity to rectify it. We had a little faith in the other side, apparently that was a mistake

Now the manufacturer complains that we are being to concerned with the details of the contract and that this process has been going on too long (about a month and a half). Keeping in mind that the manufacturer told us that the last deal they cut took 3 months to do.

My thinking is that the manufacturer just wants to handle North American distribution on their own, but doesn't have the guts to say it.

Well what to do? What to do? The biggest problem when you come across what you think is a hot product is that it consumes you, kinda like when you start dating a cute girl with perky boobs.

Then things end, and you think that no one will ever be able to take her place...........until the blonde with the nice ass walks by! In other words, there is always another deal, another product, you just have to keep your eyes open and trade through the pain!

Plowing Ahead!

Our big deal of the month should be coming to a close soon (I hope!) Just got the company's accountant to sign off on the deal.

Basically, we just cut a company's cost of funds from about 45% to 18% a year.

The Deal I Won't Do!

Unfinished Goods Purchase Order Financing

Say What?

In a nutshell, this is when a manufacturer or importer has a purchase order from a client but must now manufacture or pay someone else to manufacture the goods, which are then used to fill the purchase order. They must then find a source to put of the cash to fill the order.


Having done one of these deals, (and thank God, well at least my God, we took a collateral mortgage over a primary residence) and seen it gone sour, I am in no hurry to accept this sort of risk again.

So why do these deals keep me up at night?

Something called completion risk............as in will my client actually complete the project on time, within specification and get it to the end customer on time. Worrying about a client making a shipping deadline is gut-wrenching enough (as in when we do Finished Goods Purchase Order Financing), taking it one step further when they have to manufacture it (and even another step further when a 3rd party does the manufacturing .......... like a factory in India or China) makes me think about getting a normal job, like either a window washer or explosives' expert.

Monday, June 27, 2005

Beware of People Proclaiming That They Are Reasonable

Much like people who ask if they can "Tell you something honestly".


If you say no, does that mean you are going to get lied to?

Are Pension Plans Just Another Ponzi Scheme?

An article in today's Globe and Mail about a 19.4 billion dollar short fall at the Ontario Teachers' Pension Plan.


"Despite its stellar investment performance, Teachers expects the shortfall between its obligations for what it has to pay in pensions and what it will have on hand to hit $19.4-billion this year. At the same time, the plan will welcome its 100,000th retiree this summer.



Stellar Investment performance? I have heard of being an optimist and saying the glass is half full rather than half empty, but this is ridiculous! There is a 19 billion dollar hole.......somebody obviously didn't do their planning very well. I think I used this excuse on my parents when I was in school........."I didn't get a C, I got an A+ on the first half of the test."



Mr. Lamoureux, an actuary by training, readily admits to being
conservative, but insists that's the prudent course. "As an actuary, you have to
think long term," he said. "I think that our job is to make sure there is a
pension plan in 35 years and that it is not too onerous on the young
people,"


Isn't it an acutary's job to make sure this situation doesn't happen to begin with. This shift in demographics is nothing new and is not unexpected. Isn't this part of what pension managers get paid to deal with? I'm lost.


So how did the Teachers plan get into trouble? The Ontario Teachers scheme has set the gold standard since Mr. Lamoureux took the top job 15 years ago and started running the fund like a business. Performance has been nothing short of spectacular, averaging an 11.3-per-cent return since 1990, and the fund seemed awash in cash, running multibillion-dollar surpluses through the 1990s.

But Ontario's teachers and the provincial government, the two parties that
fund the plan, decided to raid the cookie jar. The government used its share of
the surplus to pay debts it owed from past contribution shortfalls. The teachers
got a sweeter deal on early retirement. Their inflation-indexed pension kicks in
when their age and years of service add up to 85. Teachers and their survivors
now, on average, spend more years collecting retirement benefits than they spend
in the classroom.


So then what this article is saying is that the "surplus" was really imagined? I wish I had an imaginary surplus in my bank account that I could monetize.

I know what you will say, Josh it's easy to be a critic. Josh says, no way, I run my own business and take responsibility for the risks. Why should a giant pension fund manager be any different. Trying to shift the blame to the teachers by saying their contributions haven't increased in 15 years, is like blaming a back seat driver when you get into an accident (and it's you that is driving). Well, okay maybe the teachers aren't completely blameless as demonstrated by this quote"

OTF president Jim McQueen fully expects some increases will have to come, but he says if the plan were a little less conservative in its assumptions and embraced a rosier scenario for future performance, part of its funding shortfall would go away.

So just put on the rose coloured glasses and everything will go away? Cute!

Things on the go for this week

1. Wrap up that $2 million facility
2. Complete the current $100,000 invoice discounting deal we are funding ourselves
3. Oh ya...............pack up the office and move.....................now this is an f'in pain in the the butt!

Sunday, June 26, 2005

The SHOW!


Unsalted
Originally uploaded by Josh Kerbel.
Made it to the Fox Theatre with time to spare. Unsalted was being sponsored by Lefty International, one of our clients.

Wow, who knew you could surf the great lakes!

Wow, who knew how many surf fans there are in Toronto. The 6pm showing packed at least 75% of the seats

With a little bit of reflection on the movie afterward, surfing the great lakes is kinda like building a business:

1. It takes a lot of gut and perseverance.
2. People will tell you that you are clearly crazy.

I may have to give this surfing thing a try this summer, or as the movie suggested September to January.

Another Solution (Scratch the bow tie/Hawaiian shirt look)


Unsalted
Originally uploaded by Josh Kerbel.
So my darling wife talked me out of the bow-tie/Hawaiian look. She said, Josh, even thought it is a movie screening and the room will be dark, you will still look like a fool wearing a bow tie with a Hawaiian shirt.

But just to be on the safe side, I put the bow tie in my pocket. You never know when you might have to wipe it out!

A movie premiere.....What to Wear, What to Wear?


Unsalted
Originally uploaded by Josh Kerbel.
So what do you wear to a movie premiere? Should I go formal? But wait, it is a surfer flick........so maybe I should find my finest Hawaiian..............or maybe a nice little combo of a bow-tie with my Hawaiian. This sounds like the best approach, formal, but still surfer.

Saturday, June 25, 2005

Papering a deal

Nothing more fund than drawing up the documents for a deal on a HOT HOT Saturday in June. Here is how it works

We get back a signed term sheet, and we then do the following

We check out the client's invoice debtor - This is the guy that owes our client the money. If we like the look of the debtor, we create the following documents:

  • An invoice discounting agreement
  • Personal Guarantees for all of the company owners to sign. We deal with closely held companies so it is usually 2 or 3 people
  • Officer Certificate - basically stating that the officers of the company acknowledge that they are the officers and have the power to encumber the corporation
  • lien registration acknowledgement - In Ontario, we have something call the PPSA (personal property security act) registration system. Basically in layman terms, this is were you register a lien against a company. We also search the system to make sure the company has no undisclosed liens.

From time to time there are additional documents, but this is the meat of the matter

We kill a few trees in the process!

Discretion Part II (Who is the Video Vixen?)

According to the Globe and Mail, there is a woman seducing Toronto investment bankers, some of whom are married, and video taping them - without their knowledge.

Now there is a rumor that she is going to release the tape...............(maybe your mouth is not the only thing you should keep shut guys!) Discretion is everything baby!

Who is the Video Vixen?
ERIC REGULY and ANDY WILLIS go on the hunt for the woman who has Bay Street on its knees
Saturday, June 25, 2005

Who is she? That's what everyone on Bay Street wants to know. And those who do know are running scared.

Word began spreading in the financial district this week that a woman who has been known to hook up with financial types has been secretly videotaping her romps and is about to go public with the evidence. They won't win any Oscars, but rumour has it the footage could be must-see TV in divorce court.

Networkin'!

I am not talking about network marketing (MLM)

I am talking about social networking, not just the on line type where things are done in a virtual world where people don't have to meet face to face. I am talking about going out and "making friends".

Something I think that I am in the process of learning is the difference in attitudes towards networking between those who work in corporate silos and bureaucracies - internal ops people/doctors/non-rainmaking lawyers/bankers (who, for the most part do not have to "kill in order to eat") and those who work outside the silos, the entrepreneurs, the sales people, the independent consults (those who "eat what they kill"). For example, I need to create deal flow and I do this a variety of way - call people out of the blue, go to networking events, maintain a blog, etc.

My recent experiences are starting to show me that the "silo" types view networking almost in the same light as performing sales calls and speaking in public, they don't see the point of connecting with people they don't know unless they can immediately see the potential pay off (like that person can help me right now, not hey maybe that person knows someone who can help me). I asked if they would respond to a personal (not a mass mailed letter) to them congratulation them on a recent accomplishment and a lot of people said they would not. Mostly because they were "just too busy". Is this the reason why I see a lot of 40 something ex-silo workers, who have been laid off from jobs or made the transition to independent consultants, starting right from the bottom (with no deal, job or client flow) because they haven't built a useful network along the way?


My thinking is exactly the opposite, I will usually meet with anyone who wants to talk to me. If someone wants to make an effort to know who I am, I will always do the same in return. Any salesperson who calls my office and does a reasonable job of finding out who I am before hand gets some of my time, because as a result, I get some of theirs. The last 3 times I have done this, it has resulted in decent deal leads and the start of new relationships. I like to think of myself as busy, but part of my "busy" is building a bigger network. I don't know who knows who but I do know that not taking the time to find out is potentially dangerous

Is this attitude a differentiator between entrepreneurs and "silo" types? Am I just a lunatic?

Friday, June 24, 2005

Life Stress

I am quickly learning that balancing the stress of work and home life is one of the greatest challenges facing the entrepreneur.

More on this later as my wife will kill me if she knows I am posting this now

Shut Up, Sit Down, Read the Papers and Sign Them!

What else do you say to a client who was bitching about factoring costing him about 45% a year who is now complaining about the inadequacy of a factoring facility that will cost him about 16% a year.

And increase the size of his existing facility by 100% to $2 million.


Steve Miller had a song about this.........Take the money and run!


When someone is brave enough (aka dumb enough) to front you some capital, especially when it is cheaper than what you had before................all you do is ask "where do I sign?"

Finally

Got the approval letter for the $2 million financing facility for my metal fabricating client so the day hasn't been a total write off!

Deal should finally close in about 2 weeks.

Hopefully got things back on track with our other business opportunity, but we shall have to wait until Monday to finalize that.

Got the direction of payment from 2 of the 3 estate executors in regards to the deal that tanked back in March, so we are on our way to getting paid once the estate gets out of probate.

So it was a semi decent day so far

Wanna see something gross?


TWO FACE CAT
Originally uploaded by Josh Kerbel.
I think the apocalypse is coming real soon.

Urgent Urgent - Lefty International is sponsoring a movie screening

Derek Henderson and his company, Lefty International (one of our "portfolio" companies if you will) - the distributor of Flowboard, is sponsoring the showing of UNSALTED: A Great Lakes Experience .

"Unsalted" documents the quest of a group of landlocked fresh water surfers and a few invited pro surfers as they conquer extreme icy winter conditions; ice-burgs and snow drifts in order to satisfy their passion and addiction to surf.

Screenings are on Sunday June 26th at 6pm and 9pm at the Fox Theatre on Queen St East in the Beach (not the Beaches!)

Come out and help Derek make this showing a success! After Derek builds his company, you can say that you knew him when......................

Get in touch with me if you need more info! 416 345 0032

Hurry up and wait

We do a lot of waiting....it's not that we are passive, it's just that a lot of our activities are dependant on the choices and whims of others.

Still waiting for:

  • Us to work out our contract issue with a potential distributor;
  • A retailer or two to issue a purchase order that was due a while ago;
  • A lender to issue a loan agreement for one of our clients;
  • And for my form impaired friends to get me back an application.

So I'm busy!

Waiting

I'm going so so soft!


Little Guy
Originally uploaded by Josh Kerbel.
Yes, I am acutally posting another picture of my kid on my blog. Has nothing to do with business.

Just thought it was a unique shot

I typically make fun of people who do this, because for the most part no one else really cares.

So josh............you are becoming a pansy!

Thursday, June 23, 2005

I feel like the girl in high school.............

who had a reputation for being easy.

Guys just think you will put out with out at least buying you dinner...................how's that for politically incorrect!

Let me explain. We deal with lots of businesses that other financing sources feel are undesirable, too small, too young, too inexperience, not enough collateral, so by default we see lots of people who aren't exactly well versed in the ways of finance.

Basically, they think they can call us up, tell us their problems and we will cut them a cheque without jumping through any hoops.

Remember back to school, there was the girl that you were friends with and the girl you were too intimidated to talk to, who you swear you would do anything she asks of you, if she would only talk to you. And when she finally does talk to you, she comes across all nice and sweet, but you keep doing anything she asks, just so she will keep talking to you................I'm that girl!

Play our game, and we will always be there for you!

Negotiating by Email...........

absolutely sucks. The worst thing in the world you can do (well, not the worst thing, but it is not an enjoyable practice).

Unfortunately, it sometimes has to be done.

The biggest problem is that in negotiating without being to get an immediate response/reaction from the other party, all language, even the most mundane, is taken out of context. Basically the ability to build rapport is non existent

What was meant as a question is interpreted as a statement. A suggestion is taken as an insult. And a misunderstanding can go uncorrected for long periods of time.

Maybe there is an art to negotiating over email, but that like may be saying there is an art to eating bird poo. I am sure there is, but is there a point to it?

Negotiating by email is like drugs (or at least cheap drugs), DON'T DO IT!

This is a show?

No, it can't be?

Really, no?


First it was celebrity porn, now celebrity dancing...........what next? Celebrity pooping?

The 8000 lbs Chinese Gorilla

Yes, 8000lbs, not 800lb.

How do you deal with a country whose (state owned) enterprises are back by the state's power of taxation (on over 1 billion people) and a monopoly money foreign exchange policy?


While the potential CNOOC - Unocal deal could be dealt by the US government running some interference, are potential asset sellers mistakenly underpricing themselves when dealing with the Chinese?

Just a thought?

Ya, but are the aboriginals suing?

VANCOUVER, British Columbia (Reuters) - A Canadian hockey team's costumed mascot has been awarded C$35,000 ($28,500) for injuries he suffered when he was attacked in the stands by the trainer of an opposing team.

Kristen Reddemann, who dresses up as "Chief Wannawin" for a Chilliwack, British Columbia, junior hockey team, was punched and knocked to the....................


If I were an aboriginal, I would be suing the team for defamation! Chief Wannawin? Isn't that like Josh the Shylock?

Wednesday, June 22, 2005

Deadline...........What Deadline?

So it doesn't look like I am going to get my most recent deal papered by Friday.............and that pisses me off to no end.

I ask for some simple and mundane paperwork and I get back a dog's breakfast!

Grrrrrrrrrrrr! I think Rex the crazy Viszla (my dog) could do a better job!

Strung Out

If you don't know what being "strung out" is in the business sense, then you haven't ever done anything on your own.

Being strung out is passed being stretched by a customer; being "Strung Out" is when your customer insists that they must get everyone in there department to sign off on a purchase order.......and when it comes down to that last person, they are always out of the office or out in Asia somewhere (I guess Asia is new suburb of Toronto). This is still before the "Nut Busting" Stage where your customer takes 90 days to pay, after threatening to send all of his inventory back to you

Having said that , if haven't had the experience, you have not run a business with your own skin in the game

Don't Be This Guy


Globe and Mail
Originally uploaded by Josh Kerbel.
It is one thing to go into debt to build a business and buy an asset that either appreciates (house) or helps you generate income (a car to get to work), it is another to do so just to consume.

Most people don't understand the difference between good and bad debt.

The bottom line is, don't treat your house like an ATM by re-mortgaging it all of the time. You can go without that new TV or MP3 player for just a little while longer, despite what the television tells you!

Tuesday, June 21, 2005

A little social experiment from the sociologists at Prescott Thackery

Under the cover of stealth, Prescott Thackery launched a little experiment in social capital last Friday, and while it is still early too judge, the results are looking a little on the not-so-good side for human nature.

Stay tuned to read more about the experiment in the coming days

Sales Calls (Watch out our you will get my foot in your ass!)

Just got a sales call from some sales guy looking to speak with the "owner" of our company. I told him that the "owner" wasn't in. I could tell that this was a typical sales call that already turned me off.

It was at this point, he asked me who the "owner" was. I told him that he should do a little bit of homework and find out the name of the owner before calling or else risk looking like a half assed sales person.

Why would I buy anything from a company that can't be bothered to learn a little thing like a name? Or at least come up with something better than, hi can I speak with the owner?

The salesperson spent a few minutes defending himself, saying they were too busy to find out names of owners from other sources, like the newspaper and business directories.

After I hung up on the guy and swore at him for wasting valuable time, my partner asked me why I did that?

My response was that I will sit and chat with anyone who shows at least a little bit of interest in finding out who I am (I did that on Monday with a sales person who called my office and asked for a meeting. I even sprung for the coffee). But if you show me something half assed...........you will get it........in the ass!

I am definitely an Idiot.......

because I still can't get my head around the necessity of Canadian bank mergers. Given the fact that we have 19 Schedule I banks, and really only 5 are players on the international scene, I don't see domestic competition or fragmentation driving this.

The story I have heard being kicked around is that the Canadian bank's lack the scale and muscle to compete on an international basis. Well given that most large and I do mean large loans are often done as syndicates, I don't see the need to bulk up at the expense of screwing the Canadian consumer.

Now if the government had the guts to allow foreign banks into the country with no restrictions..............that would be another story.

Idiot!

I think I need to go see a plastic surgeon, or at the very least, a wardrobe consultant , as I must be giving people the impression that I am a complete idiot!

Sure, don't bother doing all the paper work, I didn't really need it. I was just asking for fun..........here's your money, pay it back when ya can..........ya'll come back now!


Yes, my name is Johnny Hayseed, and I am a moron!

Josh, Stop your F'in Whining

I get that a lot actually in response to my posts. My response, I'm not whining, I'm lamenting about the daily challenges my firm deals with when financing small, and I do mean SMALL businesses!

People slag the banks for not being "there" for small businesses but the simple fact is that financing a small business is much more time consuming that financing a large one.

Someone I'm Glad I'm Not


John Rigas
Originally uploaded by Josh Kerbel.
John Rigas: Cuz he has a wonkey left eye.

Monday, June 20, 2005

Talk about wanting to pull your hair out!

I am a very straight forward person, and I am very straight forward in my business.

I tell people and potential clients how we work, how much we charge and our fees. I put everything in writing and do not promise what I cannot deliver.

I also happen to trust people in a way that when they hand be a cheque, it is in the amount that I require and made out to whom it is suppose to be made out too. In other words, I don't inspect the envelope.

So it drives me up a wall when I wait for a client to show up with a $1000 cheque (Check for those of you who are from the US) in order to pay for the due diligence on a transaction for his company. Our terms sheet is quite clear, a non-refundable payment of $1000.00. I don't do this in order to grab a grand from a guy, I do it because it covers the cost (and a minor amount of the time) of the credit credit work, legal searches and registrations associated with the transaction.

So when I get a cheque from a client who expect me to advance funds in 2 days and it is made out to Prescott Thackery in trust with a note indicating that this cheque is not to be cashed unless a transaction is completed, I get really really pissed off. It is also one of those things that gets me antsy about doing a deal.

You know its a bubble when...........

when news outlets start writing about how many other news outlets which are tumpetting the arrival of a housing bubble. Check out the opinion section of this week's Economist

Is this another case of a broken clock being right twice (Josh, take a bow) a day or are we on the verge. Does anyone have the guts to play contrarian with their own money (not an investment fund's)

Signing off,

Chicken Little!

So that is how they do it.........Deferred Prosecution Agreements

A good article in the WSJ today on deferred prosecution agreements, sort of explains how companies can buy themselves out of trouble (and answers my own question from a few days ago.....sort of). For those of you who don't get a subscription to the WSJ and can't hack the site, Law.com has a good overview of it here.

Sunday, June 19, 2005

Oh, Canada? (Knock, Knock, balls are you home?)

In the words of the immortal George Bell of the Toronto Blue Jays......................."Kiss my purple ass!"

So back on April 25th, Air Canada puts out a press release about $6 billion airplane purchase from Boeing, 32 777's and 787's. Even posts it on the corporate web site

On Saturday (Yes, Saturday) June 18th, Air Canada puts out a press release canceling the order due to the fact that the tentative agreement with the Air Canada Pilots Association (ACPA) on costs and other issues relating to the Boeing order has been rejected by the union membership.

Besides putting this release out on a Saturday night (ya, maybe the vote came down on a Saturday, I really can't prove or disprove this), I don't recall seeing any of this union requirement stuff in the original press release..............funny how that works isn't it. There was a mention of certain factors and conditions that need to be met, but nothing on union ratification.

Subesequent to the April 25th release there were a few press relseases about the union involvement with this deal, but not in the first one.........trying to slip one by?

I wonder if anyone takes Air Canada to task over this. Do any of the stock holders have any balls? Knock, Knock.................balls are you home?

Things on the go for next week

Busy week ahead.................

  1. Wrap up the new deal that just came in friday. First time we are doing a construction deal, so it will be a learning experience. Hopefully, I will learn more about construction, and my clients will learn how to fill out paper work! The goal is to have them funded by Friday!
  2. Gotta finalize everything with our product launch. I would at least like to get the website up and running and do some presales after the samples go out. Seeing as how we dont have a good idea of the potential of the product, we have to keep our minds open about distribution.
  3. Also meeting with some web designer/marketing person who cold called my office this week. I have a policy of meeting with everyone who wants to meet with me. While I cannot promise anyone business, building connections is always worth a cup of coffee. I have also learned that this trait is what separates the men from the boys when it comes to leading a company. Since I am not afraid to say no, I don't mind hearing other people's pitches............it makes sure I am not missing anything and personally, it is the way I like to get treated (not that many people do but I gotta do my part)
  4. Finish up our $2 million transaction for my "entrepreneurial" client. We should get it approved for this week. This has been dragging way too long. This is a nice chunck of cash that I can plow back into my new venture.


Also need to kick this infection

Crap, this sucks!

Have strep throat, taking some penicillin and not having a great gastro reaction

Decided not to do the Mt Sinai 5 km run.

The old me would have said screw it........none of this wimpy "I don't feel well" crap.

The older me says, don't kill yourself, there is another 5 km race next week.

Saturday, June 18, 2005

Is Bigger Better?

Looking at houses for a while. Have a budget set.......

Should I buy a house out in the sticks, even though that is where all the young families are going these days..........big house (3000 sq feet) big lot...................and a bitch of a daily commute to downtown Toronto. Im looking at 1 to 1.5 hours to get up to Bathurst and Highway 7 during the evening rush hour and probably about 45 minutes in the morning..........on a good day.

Or get something half the size, down town, walking distance to the office. It small, but has charm and character.


Quality of life or Quantity of Life? Follow the Pack or Dare to be different (or stupid)

Slowly but Surely

Hey, don't call me Shirley!

As we are moving toward finalizing our licensing deal for our new product (and our tiny office is covered with samples), we have started to work out our marketing and promotions strategy.

The trick is going to be trying to emulate the great brands of this world that do little to no formal/traditional advertising, yet are known by everyone.

From an initial starting point, we are going to be going after two distinct distribution channels, the retail and then the wholesale market.................which brings us to a whole other issue.....................logistics/distribution. I took a course on global logistics/distribution during my MBA because I thought I really wanted to go in to the operations side of a giant multinational corporation - I wanted it so bad that it kept me awake at night (well, actually it was the only course that fit into my schedule as I was trying to do my MBA full time at nights while working full time during the day).

And I would like to thank all of those who wished me a speedy recovery from my sore throat. Sore throats are the type of thing that can bring a mere mortal to their knees, but not me!

Friday, June 17, 2005

Back on Track........Hopefully

Thinks are moving a head........stroked some egos, did some spinning and a little bit of begging and pleading

Going Sideways

Ack! Deal Going Sideways! Deal going sideways!

Potential borrower is having trouble understanding that people who lend money at 16% a year versus 42% a year have a few more steps in their approval process. Yes, this is a paper intensive and sometimes slow process!

Funder is just waiting to get final A/R listing and magically, they have taken 3 days to appear or should I say not appear. Funder wants to approve this loan. This deal has taken 4 months because the borrower has taken about 5 weeks to produce the paper work!

Shit, this is not what I like on a Friday afternoon. No wonder I feel like crap

Have to get this deal on track pronto!

Why Can't I Do This? (What am I missing)

A rash of large settlements lately, some of the Enron ilk (about 4.2 billion over the last few days from Citi and JPMorgan..........all while not admitting any guilt or liability)and a KPMG related one (settling some tax shelter issues which KPMG acknowledged represented "unlawful conduct by former KPMG partners") in which they are seeking to stave off possible criminal charges (as per today's WSJ)

Why can companies (well at least some..........sorry about that conviction Anderson) buy themselves out of trouble, but the average person can't, unless you consider Grubman and Blodget average situations?

Not a lawyer so if someone could explain, it would be great

Thursday, June 16, 2005

Alex, I'll take "Thank You" for $1000

In Praise of Praise in the Workplace

By JEFF BUCKSTEIN Wednesday, June 15, 2005 Special to The Globe and Mail


A simple gesture is all it takes for Glen Stewart to want to walk that proverbial extra mile for his employer. That gesture? Nothing more than a compliment for a job well done from his immediate supervisor, Peter Bangs.........click to read it

Maybe it is just me, but on my planet, I can't put "Thank You's" in the bank..............can you? Save the "Thank You's" for the charity work!

Dealing with the Fool

I have a special approach for dealing with people who fit the description of "The Fool - Part 3".

I listen to their story with great interest, then I ask them for more information, which they usually give with please. This information is typically filled with big words and impressive names. I then keep track of the names, track the people down, "verify" the information and then call "The Fool" back and ask him some questions about my findings.

Dealing with "The Fool - Part 2" is a little trickier. Basically you have to tie up all of his assets. You can tell if you are dealing with this type of guy simply by doing a thorough due diligence. If he has a record of getting lenders to take a haircut or racking up all sorts of judgments, you aren't going to be any different (i.e if you see an out of control car speeding towards you, do your best to get out of the way, don't just sit there and watch it). This sort of fool isn't always malicious or intentional, but somehow, they always manage to screw other people

Dealing with "The Fool - Part 1" is really quite simple, if you can't figure out who the fool at the table is in about 5 minutes, it's you. No one gives anything away. While an opposing party may seem to be giving something away cheap, make sure they have a good reason for doing so, not just because they appear stupid.

The Fool - Part 3

The one last way the fool gets you is by proposing something so ludicrous that it has to be true, because no one could possibly say something so outrageous without it being true (and keeping a straight face at the same time)

A perfect example of this was Victor Lustig (read about a few of his adventures here). For many of his performances, he would come up with the most outlandish ideas and people would buy into them.

Any reasonable person would know that someone like Lustig was talking like a fool, but obviously many people are not reasonable.

The Fool - part 2.

So you, the slick financier that you are, have been financing a company for a while and the owner comes to you saying he is in a bit of trouble and can't pay you back on schedule or even worse can't pay you back at all.

You call him all sorts of names and tell him he is a fool (as in "you fool, where is my money!).

So you throw him into forbearance and start running up the fees.

Now the client files for some form of bankruptcy protection and the assets of the company are put of for sale so that the secured creditors can realize a little bit on their money (and then you remember that right behind you, the owner of the company is listed as the next secured creditor).

Seeing as how you, the lender are looking at taking a major haircut, you are willing to listen to an offer from the owner of the business to buy out your position for more than you would have received if the assets went to auction, but still way less than you are owed? Even though the capital is personally guaranteed, are there personal assets to back them (they have a habit of disappearing)

So you, the lender is looking for the best way out of the situation, takes the offer, and walks away licking your wounds. The former borrower walks away smiling, paying you less than you are owed (which means he made the difference) and probably with another lender financing his business. He has also probably cut a deal with his trade suppliers to pay them 100% on the dollar to keep them happy.

He has managed to shake you loose, getting you to eat a pile of your fees and capital.

So who is the fool now?

Getting played by the fool.........Part 1.

Here's how it works....................in its simplest way, the fool lets you think he is dumber than you and he is offering you an opportunity to take advantage of him big time.

You think he is naive and that you are giving him the gears. No such luck tough guy............you are the sucker here.


Pick up a copy of 48 Laws of Power by Robert Greene........its on my book list


Part 2 to follow, and maybe part 3.

Wednesday, June 15, 2005

Don't Believe Da' Hype

Public Enemy nailed that one down............in business, never believe the hype!

What do you think of when you are driving and someone pulls up next to you in a brand new Porsche?

Wow, he must be rich! He must be really successful! I bet he gets a lot of chicks!


Ya know what I think (obviously you do if you are reading this), I think here's a guy who can come up with about $1000 a month to pay for a car lease.

The same goes for a guy/girl who wears expensive clothing and lives in an expensive house, unless you see their credit card bills and mortgage statements you have no clue if these people can actually afford what they buy. Having done a few deals and had access to the personal information of a multitude of people, I can safely say that lots of people like to bluff..............present a particular image to the outside world by living beyond their means.

Maybe they do this for a particular strategic business reason (attempting to intimidate) or maybe because they feel that they are entitled to a certain status of living, but as an outside observer, don't fall for it.

Take a look at large law firms in Toronto...........expensive offices, great art on the walls, the "I charge $600 an hour' mentality...............and from time to time have difficulty making payroll! The whole purpose is to intimidate/impress the clients.

I'd be more worried about going up against the little old guy who dresses like a bum, speaks broken english and has invested every dime he has in revenue producing assets, he's the killer..........most of the other are just stuffed shirts and wind bags.

You'll play him like a fool and come out the loser every time and I'll show you why soon

Being A Reasonable Person

Does it work? I guess we will find out.

We are just putting the finishing touches on a settlement with a client who ran into a bit of misfortune and then a little bit of fortune.

We broke it out for the client that we expect compensation for the time our capital was "impaired". We put a proposal in front of him that outlined what we were entitled to under our agreements and what we would be willing to take.

And, much to my surprise, they were agreeable............at least in principle

Bitchin' about paper......again!

Kids, a piece of advice. When a lender asks you to fill out a form, you do not get to choose which parts to fill out!

I don't kick out paper cuz I like killing trees, I do it because I need the information!

Well Actually this is a Joke..........Too Bad


Stop Staring
Originally uploaded by Josh Kerbel.

This is not a joke. It came from the New England Journal of Medicine.
Great news for girl watchers: Ogling over women's breasts is good for a man's health and can add years to his life, medical experts have discovered. According to the New England Journal of Medicine, "Just 10 minutes of staring at the charms of a well-endowed female is roughly equivalent to a 30-minute aerobics work-out" declared gerontologist Dr. Karen Weatherby.

Dr. Weatherby and fellow researchers at three hospitals in Frankfurt, Germany, reached the startling conclusion after comparing the health of 200 male outpatients - half of whom were instructed to look at busty females daily, the other half told to refrain from doing so. The study revealed that after five years, the chest-watchers had lower blood pressure, slower resting pulse rates and fewer instances of coronary artery disease.

"Sexual excitement gets the heart pumping and improves blood circulation," explains Dr. Weatherby. "There's no question: Gazing at breasts makes men healthier." "Our study indicates that engaging in this activity a few minutes daily cuts the risk of stroke and heart attack in half. We believe that by doing so consistently, the average man can extend his life four to five years."

The shirt is not mine. If you want a shirt like this, go here

Why can't people follow instructions....

when filling out forms.


I'm busting my ass to wrap up a deal and I need some paperwork completed by the client. I send them the paperwork via email along with explict instructions on what to fill out and that it should be sent back to me electronically, unsigned.


What do I get, a signed copy via fax!

ACK!

Tuesday, June 14, 2005

Another Flowboard Shot


Another Flowboard Shot
Originally uploaded by Josh Kerbel.
Here is another Flowboard Diagram that shows the carving ability of the design.

What in God's name is a Flowboard!


Emailing: DCS_assembly
Originally uploaded by Josh Kerbel.
I have been asked by many people, what the hell is a flowboard and how do you put 14 wheels on a skateboard.

Well if you take a look at the diagram, it give you a pretty good idea of how it works. One of our clients, Lefty International is moving these boards in Canada, so if you want get your hands on one, I can set ya' up!

Testing Flickr


Testing Flickr
Originally uploaded by Josh Kerbel.
Just signed up for Flickr. Seems amazing. A blog+email access+digital

camera+RSS = homemade news wire! Watch out CNBC...........here I come!



--

No virus found in this outgoing message.

Checked by AVG Anti-Virus.

Version: 7.0.323 / Virus Database: 267.7.1 - Release Date: 13/06/2005

Got it nailed down......or close to it at least

Looks like we are getting closer to finishing up our distribution agreement. Just got through the most difficult portion of the agreement, quotas and duration.

Most distribution agreements have a provision to automatically renew as long as certain quotas are met. The tricky part is how to set the quota when you are bringing a product into a new market........

Why lenders have to be tight with the money

Working on a deal right now as I type (well not right now as I am posting this) and a little snafu has come up.

Our client is currently using a non-notification factoring facility in the seven figures. This relationship does not involve the use of a lock box................absolute no no for non notification deal (i.e. - You need a lockbox on these things or else the following happens) We asked for a statement from the current factor and wholly crap, close to 60% of it is aged over 90 days.

I call up the client to see what is shaking and lo and behold, someone isn't paying the factor as they should.

The thing you should learn from this boys and girls is that, nne, as the lender, you need to be in control or else, two, as the borrower, don't screw over your lender............or else!

The "Poutine Curtain"

Heard a great term on CBC radio yesterday, did a google search and nothing game up, so I thought I would add it to the English vernacular

THE POUTINE CURTAIN: Refers to the dampening effect that the cultural and language differences between Quebec and the rest of the country has on the transfer of knowledge and discovery from Quebec to other parts of Canada.

I can't and won't take credit for the term as I picked it up off a CBC radio show about how some scientists discovered Greenland sharks near Baie-Comeau, Quebec. The speaker was saying how it took a while for him to find out about the discovery due to the POUTINE CURTAIN.

Baltic Baby!

Not the property in the game Monopoly, but the Dry Index, yes the Baltic Dry Index.

The Who? The What? The Where? No, it is not a guide book of the Baltic region. The Baltic Dry Index (BDI) is a good leading indicator for economic growth and production. What it tracks is the cost associated with shipping bulk commodities.

It deals with the precursors to production: bulk carriers carrying building materials, cement, grain, coal, and iron. To my knowledge, there are no options, futures or other forms of derivatives associated with shipping freight, so there is no speculation in the market. People tend not to book freighters unless they have cargo to move, although I am sure there is an arbitrage opportunity in here somewhere.

For some more information on the BDI, take a look at Slate (the article is old, but it explains the basics. Yesterday's WSJ had a small blurb on it and so did a recent Economist. If you want to get a little deeper in the BDI, take a look over here for some TA (that is technical analysis, not tits and ass you pervert!) of the index.

Monday, June 13, 2005

The Stretch..............

it isn't what you do before exercising.

Rather, it is what gets done to you by your large customers. Basically the scenario goes like this:

1. A large customer give you a temporary purchase order, in order to get you to go out and get the product.
2. They manage to stall getting you set up on their supplier system and giving you a vendor number. Someone is always out of the office or something like that. Keep in mind you have already bought the goods and are now sitting with them, and paying for the inventory financing.
3. They stall some more (see point 2)
4. The customer tells you that you need to get an EDI system set up, another good stall for a few weeks (you sweating yet?)
5. Finally the customer give you the vendor number, 2 months after placing the PO, so you ship the product.
6. Now you sit and wait 60 days to get paid.

And that ladies and gents is how you do the Stretch.

Real Estate Bubble In Canada?

Been speaking to a few mortagage brokers these days, it seems there is an increasing number of people falling behind on their mortgage payments.

What they are seeing is that people who have "traded up" by using the appreciated equity in their homes to purchase more expensive homes, with LARGER mortgages, are having trouble handling the larger monthly payments - and this in a low interest rate environment.


Is this a harbinger for bad times a head?

The Part of the Job that I can't stand...........

Paperwork.

Have to basically re assemble all of the documentation for a transaction we are working on because it isn't on the right form!

Ack........it is a pain in da' ass

We are still lookin'

Looking for some help ............and get some free stuff for yourself!

We are still looking for some help in doing some pre-release test marketing of our new venture's product, so we are looking to some of our readers to help us get in touch with fashionistas across the land.

We are looking to get our product out to individuals who fit this profile:
Male or Female
Have a ragin' shoe collection!
Located in a major metropolitan area of Canada or the US.


Samples will be sent out free of charge and the names will be kept confidential (no reselling of names), we will contact the individuals who receive the samples to get feedback on the product Samples will be in distributed in limited numbers and based on our discretion. The exact timing of the distribution is still undetermined, but will be in the near future.

Please email me, Josh@prescott-thackery.com , with the relevant names and mailing co-ordinates. If the person has a gender ambiguous name, such as Terry, Kim, Pat, please indicate if they are male or female.

Do not post the names here! I'll say it again, Do not post the names here!. Feel free to get a sample for yourself.

The Day!

Things that have to get done to day:

  • Finish off the Press Release for Lefty
  • Have a 10 am meeting with potential deal source. This means that I actually had to put on pants, rather than shorts, this morning. While this may not seem as something to write about, I have this thing about wearing pants in raging humidity
  • Develop a line of summer business wear for men that includes shorts. I am also considering the "Man Skirt". I would keep away from anything plaid or short, not that I have bad legs, just that I think I would look extremely silly in a mini skirt. I would definitely be into something like a tunic.

Who is this guy?


Picture 001
Originally uploaded by Josh Kerbel.
No, it isn't me. I was far from this cute as a baby.

This little trouble maker is Azriel and he is my son. He is proof that everyone gets at least one thing right in life!

Sunday, June 12, 2005

A Little Story About Customer Service

I am not a customer service "evangelist", this may be because I just expect that this is something a business is supposed to deliver - part and parcel of running a company (i.e. It is kinda like corporate executives bragging about their company turning a profit.............duh, you are supposed to turn a profit...........its the goal of the game!)

Boy am I wrong.

My wife and I went to take a look at a house today. The "Open house" ran from 2pm to 4 pm today (Sunday) and my wife and I got to the house around 3:55. Given the way we look at a house, 5 minutes was probably about 3 minutes too long.

Anywho, when we get to the house, there is a sign on the door saying that the agent is only giving private showings (sort of the opposite of an "Open House")and that there is currently one in progress. So my wife and I sit around for the agent to finish the showing.

A few minutes after 4, the door opens, the agent comes out and says that he won't let us in, but would be more than happy to give us his card and spec sheet and "let us" see the house at another time. This is a half million dollar house and keep in mind that it is this agent's job to actually sell this house.

So essentially, this agent potentially lost a sale because he didn't have 5 minutes to spare...........lots of hustle, lots of hustle. I actually considered "outing" him on this site, but it would probably only give him additional links on the net and boost his search engine ranking, so I will control myself !

The goal of the game............Negative Working Capital

With our up coming venture, I have a number of goals that I would like to achieve, one of them is a negative working capital operation (Ya, I know it sounds like the type of thing that you fantasize about night).

What is negative working capital?

Well, Jonny, I'm glad you asked. A negative working capital position occurs when products are delivered and sold to the customer before the company ever pays its suppliers for them.

Typically, it is hard for start ups to get into this situation, as they have to pay for all of their inventory up front and then wait to get paid from their suppliers, a situation that can see a company waiting up 120 to 150 days before cash comes back in.

Certain companies, mostly in the retail and consumer world, think Dell and Walmart, often run a negative working capital position, basically what this means is that rather than using a bank to finance operations, they are using customers and suppliers as the source of financing. In other words, they have kick ass cash flow!

If you want to get a little more information on negative working capital, take a look here.

Oh ya, if you come across a company with negative working capital and poor cash flow, its not a healthy company. This is the type of company that Prescott Thackery likes to help out

Saturday, June 11, 2005

Throwing down the Gauntlet.............for Charity

Here's the throw down for a show down!

Sunday, June 19, 2005

The 3rd annual Mount Sinai Hospital Walk/Run.

9:00 a.m. (10k run)9:10 a.m. (5k run)

The 10k and 5k runs will be ChampionChip® timed and certified by the O.T.F.A. (Ontario Track and Field Association) for the more competitive runners.

I'm doing the 5K run, and this is your invitation to come out and kick my ass (or get your ass kicked as the case may be). Hopefully, I will have worked out my shoe issues by next Sunday or else!

The Great Canadian Health Care Debate

Ah, a fine Canadian tradition.

As someone with some experience in the health care field, I think my opinion is worth at least 3 to 5 cents, rather than the usual 2. Talking from personal knowledge, I can safely say that there is already a thriving private health care system, particularly in the realm of physical medicine (Rehab, physiotherapy, quackopractor..............sorry I mean chiropractic, et al.)

Canadians are fooling themselves if they think that a privatized system is going to be a panacea for what ails the current system. Only a small percentage of the population will be in a position to pay for major surgery out of their own pocket, the rest will depend on private health care insurance. Having significant experience with third party payers, I can safely say that what Canadians will see is rather than prolonged waiting periods they will just get denials of treatment. The exception to this being those individuals who can cut their own cheques to cover the cost of their treatment.

In the event that private health care is allowed in Canada, many of these costs will be passed on to corporations in the form of higher health benefit and insurance costs. The companies will then use a variety of strategies to attempt to control these costs. One only needs to look at some of the huge health care costs facing large US companies to see the future.

This is not just a money problem (i.e. putting more money in the system), it is a societal problem. We have to eat healthier and exercise on a regular basis, and for GOD sakes, stop smoking. I'm going to take a RADICAL bend here and suggest that if one wants to engage in behaviors and lifestyles that are known to ill contribute to one's health, should they not bear the burden of their decisions, through either a HIGHER TAX (Josh, you socialist bastard!) on food that is known to be "less than healthy" or a health care levy on people, much the way insurance companies assess premiums based on health care.

You may say, Josh you are a hypocrite, you say it isn't a money problem but then talk about taxing people to raise money. The point here isn't to generate revenue, but to use the higher costs as a deterrent to limit certain behaviors.

Opponents of this idea will say that the economic costs of these initiatives will destroy the fast food industry. To them I say, Fooey on you!, People still drink and smoke, despite the sin taxes. People just have to take responsibility for their actions, and in a socialized medical environment, I don't think that I should have to pay the tab for the 400lbs guy who eat fast food all week, hacks a few butts here and there, and winds up ill by 40.

Or the other alternative, a libertarian approach if you will, is to remove all tax revenue from the health care system, reduce personal and corporate income tax by the same amount and see how the health care system works out with out any intervention at all. Now that should be equally cute!

Friday, June 10, 2005

I'm going out on a limb here...........Debt Relief

Is wiping out the debt of heavily indebted nations the right approach? Yes there is the humanitarian side to it, but for the most part the people who run the countries and make the "spending" decisions, are they the same ones who are impacted by the lack of government infrastructure and abject poverty?

Is this a little like wiping out the credit card debt of a compulsive shopper, hoping that they will "change their spots"? It may be naive of me to see, but will erasing debt somehow make these countries more responsible or will the governments just rack up new debt?

Is there another way? Am I just an insensitive bastard or can we be a little bit more creative. Yes, most of the debt that is being wiped out is non-performing, but is anyone specific being held accountable for the situation or are we just erasing money that never really existed?

Looking for some help (Free Stuff For YOU)

Prescott Thackery, affectionately known as Da'Thack in certain "in" circles (as in "in" my own mind), is looking for some help in doing some pre-release test marketing of our new venture's product, so we are looking to some of our readers for help.

We are looking to get our product out to individuals who fit this profile:

Male or Female
Have a ragin' shoe collection!
Located in Canada or the US

Samples will be sent out free of charge and the names will be kept confidential (no reselling), we will contact the individuals who receive the samples to get feedback on the product Samples will be in distributed in limited numbers and based on our discretion. The exact timing of the distribution is still undetermined, but will be in the near future.

Please email me, Josh@prescott-thackery.com , with the relevant names and mailing co-ordinates. If the person has a gender ambiguous name, such as Terry, Kim, Pat, please indicate if they are male or female.

Do not post the names here! I'll say it again, Do not post the names here!. Feel free to get a sample for yourself.

Thursday, June 09, 2005

Deal Flow................Joshie Style!!!

Some how one of my phone lines at work went on the fritz today.............and took my internet connection with it, so I did what any self sufficient guy would do, went to the closest bar..........just kidding!

I prowled my neighborhood until I found a copy of the BusinessExchange and called up every business broker that was listing businesses for sale, big, small...........I called them all. I figured that many of the have clients in need of money and since I have money to put out, it could be a good fit.

Unfortunately, my pitch really sucks. It usually goes something like this:

Hi, my name is Josh Kerbel, I came across your name in Business Exchange. I run a small merchant bank by the name of Prescott Thackery and to get to the point, I have money to give to small businesses.

As you can imagine, I get a variety of responses...........some are great, some luke warm, some like.........are you legit or are you some sort of vulture fund (not quite sure if most people know what a vulture fund is, they just like the sound of it).

But hey, its a living!

Wednesday, June 08, 2005

I couldn't make this stuff up if I had to!

It keeps getting better and better, or at least more entertaining (if you can't make a buck off of it, hopefully you can at least get a laugh)

Guy comes to us a few weeks back. Says he has a order from the Ministry of Trade for the government of Iraq, to deliver 55 tons of sugar and presents us with a letter of credit issued by a well regarded international financial institution. He was in a bind because he needed 5% of the value of the letter of credit or about 700K to post as a performance bond.


So the letter of credit checked out and I asked the gentleman for the name of someone in the Iraqi ministry of Trade with whom I can confirm the order for the sugar. His response was, "what do you mean, Iraq ordered it, there isn't anyone you can speak to, its the government!". When I asked him about his previous experience in international trade, he was a little less than forthcoming with the fact this was the first time he had done this and based on what little I know about the international sugar trade, it isn't something you can really get into on a whim.

Needless to say, the enterprising gentleman never provided me with a name in order to confirm the purchase order. Was this a legit transaction, not quite sure, but I got enough bad vibes to be spooked by the whole thing.

Anyone Looking to Sell a Business?

I have a contact looking to buy a business that fits the following criteria:

Revenue: $5,000,000 - $20,000,000
• EBITDA: $500,000 - $3,000,000
• Committed middle management
• Succession, spin-off or similar business situations
• Headquartered within 90 minutes of downtown Toronto

Ideal Industries:
• Niche manufacturing
• Distribution
• Services
• Luxury goods

Won't spent 2 minutes looking at something in:

• Real estate
• Energy
• High tech
• Biotech

If you have something that fits the above, get in touch with me and I'll make an introduction to my contacts and you guys can then go on you merry way. Just to clarify, I do not have any professional involvement in this situation, just simply spreading the word for a friend.

Kerbel, you have some Chuztpah.........

expecting to get paid and all that fancy stuff!

Just got turned down for a financing assignment we were bidding on (a nice little financing of about $2 million) based on the fact that we expected to get paid for our work. Let me explain:

Prescott Thackery functions as both a direct funder and as a financial advisor, depending on the situation. In the transaction we were bidding on we were to be functioning as an advisor. After we tendered our proposal to the client, they came back to me with the following response:

The major reason for declining to move further with your proposal was the
request for up front monies

None of the other parties we are dealing with made this request. All of them have a no success, no fee form of proposal


My response to the would-be client was:

If you are dealing with intermediaries, then they are simply being
compensated by the lender, who builds the fee into the cost structure of the
transaction. This creates an inherent conflict of interest as the
intermediaries are going to be looking for the funding source that pays them the
best fee for piecing together the deal, rather than the lowest cost of funds for
the client.

Typically the fees on A/R financing transactions are based on the size of the monthly discount, the larger the monthly discount, the bigger the fee. In most situations, the fee is 10% to 15% of the monthly discount rate.

I prefer the transparency of my client knowing how I am getting compensated. My
experience in finance, like most things in life, is you get exactly what
you pay for.


So much transparency!

Discretion (or lack thereof) in action!

An interesting little trial going on in Toronto these days, Andrew Rankin, a former RBC investment banker is on trial for his alleged role in an insider information trading "situation" involving his childhood friend, Daniel Duic.

A perfect example of a few people who maybe should have just kept their mouths shut and possibly avoided this whole legal quagmire to begin with.

How does the saying go, with friends like these....................................

Tuesday, June 07, 2005

Finally, another person who gets it!

I stole this post from here:

Start Something
Akira Hirai, 2004-12-28
The most difficult part of starting a company is getting started. Most "entrepreneurs" are all talk and no action. How do you get started? Read a few good books, like The Art of the Start by Guy Kawasaki. Research like hell. Get your friends and family to believe in your vision.

Most importantly, just create something useful and start selling it. It doesn't have to be perfect as long as customers are willing to pay for it. Perfection can come later, once you have more resources. For now, focus on creating something that is sufficiently better than the alternatives for people to be willing to pay for it.

If people start buying, then quit your day job, and put everything behind your vision. As they say, "nothing ventured, nothing gained." Entrepreneurship is about action, not pondering.

What a business blog should look like

OK, so I am beating a dead horse here but I just came across a blog that has some "charm".

This kid Neville from Austin is where the rubber meets the road. His blog is full of "business mind farts", it lets you know what is going on in his head, no matter how unpolished or stupid it may sound.

Almost There...............

I wish!

So Prescott Thackery is in the midst of putting its money where its mouth is and setting up our own wholesale and distribution business.

Currently we are finalizing out licensing agreement with our overseas supplier, a very sensible woman who doesn't believe in wasting time and knows that business is all about execution, not getting lawyered to death.

Next it is on to setting up our distribution channels and getting the hype out. Unfortunately, we are currently flying in stealth mode, so I can't say anything about the product other than it is so decididly LOW TECH (think almost stone age low tech) that is it almost revolutionary. I figure that it is about a month before we get things rolling.

Business kicks ass (as long as you have no fear of going broke)!

Blogs for Business...........(aka Do I really need another marketing tip?)

In killing some time waiting for a deal to close, I spent some energy looking at other business blogs. While some were insightful and witty, the majority were "ME TOO" sites, that pretty much read like a self aggrandizing press release or even worse, just a simple rehashing of some news story.

Give me blood and guts, give me the gore, let me know the down and dirty of your business and experience, not this canned Muzak PR fluff about telling your customers you love them (business ain't that pretty). Stir up some controversy, do anything, just don't fade into the wallpaper.

Monday, June 06, 2005

Last Out Financing........................Literally!

To the point...................we had started power of sale proceedings against one of our clients who made a five-figure boo-boo and was unable to fulfill his end of the bargain.

Well, luckily he had a rich relative who (fortunately or unfortunately, all depending on your position) passed on from this world, leaving our client at least enough money for our guy to save his skin (from us at least).


By the skin of my teeth I tell ya, by the skin of my teeth!

Sunday, June 05, 2005

The Most Valuable Commodity is...........

(believe it or not) discretion. As financiers, we often have access to trade secrets and other information that is vital to a company's success. In addition to this, we also have the chance to learn about how certain business people feel about other business people, both positive and negative.

While this insight and knowledge has proven quite valuable to me, I am still amazed at the amount of so-called "confidential" information one can learn by just sitting down at a table in a downtown bar or coffee shop and pretending to read a newspaper. I am constantly overwhelmed by the amount of strategic intelligence I can learn from hearing other people spill their guts about clients over a cup of coffee at the local Starbucks. Not only can I tell you who is in trouble, who is buying what but also who is sleeping with their secretary and who is nailing their best friend's husband

So a piece of advice to all of you out there, if something is confidential, do not talk about it in public. Given the fact that there are only about 6 degrees of separation in the world, spilling the beans about something will come back and bite ya in the da' ass (I've seen it)!

Thursday, June 02, 2005

Those who do, do.............

and those who don't, write?

Could be the world according to Ned Goodman of the Dundee Group of Companies as he sounds off in today's Globe and Mail in regards to an article written by Derek DeCloet in yesterday's Globe and Mail about the Dundee Group of Companies.

While, Mr DeCloet claims that:

Most business journalists, like most investors, are committed capitalists. But they also know nothing destroys faith in the system like the appearance of nepotism and greed.

Maybe Mr. DeCloet should take a read of a some economic history and look at the lives of Carnegie, Rockafeller and JP Morgan (and many other)...........the capitalist system was built on nepotism and greed, just like every other social system. Business is a game and money is how you keep track of who is winning, that's it. It isn't a moral judegement. No one forces anyone to invest in Ned Goodman's companies.

Now Mr. Decloet, where is your bank charter?

The Cram Down................REJECTED!

An update on my client who had himself a little bit of a show down with a BIG BOX retailer.


My guy stood his ground and the retailer backed down on the return issue. While this may have damaged a relationship, you never want to be in the position where you are at the mercy of one customer, as this young guy was. But the bottom line is that you have to establish yourself as a stand up, take no crap type of guy/gal.

The underlying motivation of the retailer in taking this course of action (no matter how transparent) is that they are looking for some sort of discount on goods that they have previously purchased and agreed to pay for (So keep this in mind all of you little guys). While this often leave room for both the buyer and seller to save face (and the relationship), do not immediately go cap in hand to your customer by acquiescing to their every demand............they need you as much as you need them (Your customers are just better a keeping a poker face).

Wednesday, June 01, 2005

Hey, Im not the only one..............

who gets hit up to finance whacky ventures. It appears that Ken Jennings, the Jeopardy superstar has gotten a few proposals since his big haul on the show.

My only question for Mr. Jennings is has he been asked to finance a perpetual motion machine.......I have!

The Cram Down

Remember, nothing in life is fair, this is particularly important to remember when trying to make a buck. Here is a perfect example:

One of our clients is selling product to a big box retailer. The product hasn't moved as expected, probably because this store should not have bought this product in the first place, but that is their problem. The retailer is now trying to get my client to take the product back, despite the fact that the sale was final and this wasn't a consignment deal.

This is the place where the small business owner has to show some balls and stick to their guns. When someone tries to ransom you like this (If you don't take them back, we will never buy from you again............as if you would sell to someone trying to stiff you), you have to stay firm.......a deal is a deal.

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