Evan Vitale

Accounting Professional

Evan Vitale – Latest Venture Capital News

by

By Evan Vitale

Here are some of the latest headlines in venture capital news:

According to GeekWire, a new study from MIT discovered that startups are more likely to succeed when their venture capital backers are connected to them via direct flight.

The research informs larger questions about the effects of venture capital oversight and whether it improves the operations of the startups in which the firm has invested or whether startup success depends solely on effective internal management.

The researchers — Xavier Giroud of MIT, Shai Bernstein of Stanford, and Richard R. Townsend of Dartmouth — compared startups in cities where a direct flight recently had become available between startups and their existing VCs to startups in cities where no direct flights existed to connect the two groups.

Read the rest of the story here: bit.ly/1PCt8oe

The Jewish Business News is reporting in 2015, Singulariteam, a medium sized Israeli fund founded by Moshe Hogeg and Kenges Rakishev, topped all VC fund investors by making 12 first investments,  according to report by IVC Research Center and APM & Co. Law Firm analyzing first investments in Israel by venture capital funds in the past five years, and ranking the most active venture capital funds which invested in Israel in 2015.

Singulariteam’s investments makes a slight increase for the number of deals made by the top ranked fund, compared to 10 first investments made in 2014 by the year’s Most Active Fund, JVP.

Singulariteam manages $152 million via three funds – two early stage funds and a new growth stage fund. The first investments made in 2015 were funded by Singulariteam II, a $102 million early-stage fund closed in 2014.

The full story is here: bit.ly/1KbDOxl

The St. Louis Post-Dispatch reported a $104 million fund managed by Lewis & Clark Ventures is a big deal for St. Louis.

Startups that have been nurtured by the region’s various angel investing groups, accelerator programs and seed-stage funds now have someplace to go when they need larger sums.

The fund plans to invest in series A and B rounds, which are when an early-stage company gets its first or second dose of institutional investment. Lewis & Clark says it will invest between $3 million and $7 million per company, and will bring in co-investors when firms require tens of millions of dollars.

The full story is here: bit.ly/1KFdqMl

Evan Vitale – Dealing With a Difficult Co-Worker

by

By Evan Vitale

Some of us can relate to this situation: we love our job, but we can’t stand to work with so-and-so on a daily basis.

Yes, at times, it’s hard to get along with everyone or understand why other people are difficult to work with, annoying, negative, etc. Everyone has their own personality, habits and mannerisms and we have to figure out how to deal with that person or start looking for another job.

Since we don’t know what a future job holds (you might have two difficult people to deal with at a new job), it’s probably better to figure out how to deal with a current co-worker and stick with the job that you like.

If the conflict is small, you can probably work one-on-one with your difficult co-worker. If the problem is much larger, you may have no alternative than to talk to a manager or to someone in your company’s human resources department.

A good way to start solving the problem is to talk to the co-worker privately. Suggest a coffee break or lunch together. Be careful how you present your problem as you certainly don’t want to make matters worse! Don’t sound frustrated or mad. Be caring and cautious. Communication is a huge key in solving any conflict.

Once you have had a discussion with your co-worker – and the problem continues – then it’s time to consider speaking to your manager about the issue. Here you will find some managers won’t have the interest, time or energy to deal with small personality conflicts, while others will be helpful and will try to find a solution.

If the matter is more serious (i.e., sexual harassment), then you need to speak with your supervisor immediately about the problem. If your manager is acting inappropriately, then you need to discuss the matter with the manager’s boss or with your human resources department.

Evan Vitale – Working For A Startup

by

By Evan Vitale

Working for a startup business can be exciting and risky at the same time.

For some, knowing that you’re helping a business work from the ground up is an adventure and it’s a thrill if the startup becomes a huge success (and it makes for a nice addition to your personal resume)!

However, working for a startup can be considered one of the most riskiest career moves that you will ever make. Your starting salary may be low and there may also be a lack of any benefit package. Plus, you never know when you’ll be handed a pink slip due to a cash shortage.

Here are some questions you should ask yourself before you accept a job offer from a startup:

  • Will working for a startup be of benefit to you? Remember, you might have to consider being a part of the startup for the experience and the potential “glory” of business growth. You’ll learn a lot, especially if you’re just starting a career. But, at the same time, you may not be paid your full value.
  • Will you be of benefit to the company? You must feel valued and there must also be some potential career advancement opportunities with a startup as well. As many employees have learned over the years, sometimes being valued by your employer goes a long way.
  • How is the startup financially secured? There’s nothing wrong in asking if the startup is backed by a venture capital company. If you don’t feel comfortable in asking, you can do some of your own research and learn more about the startup. Typically, a VC will publish a press release highlighting funding for startups. You need to feel secure that the startup is going to shutter its doors tomorrow if you decide to come to work for them today.

As you can see, working for a startup has it’s positives and negatives. Do your research, talk to your family and friends and make the right decision based on your goals and financial needs.

Evan Vitale – What’s New In VC News?

by

By Evan Vitale

Well-known sports agent Leigh Steinberg is launching a venture capital initiative. Steinberg Ventures will invest in emerging companies and startups in sports and entertainment.

Steinberg Ventures is a partnership with private equity firm Alpha Strategies, led by founder and President Jay Rodgers. It will leverage relationships and opportunities sourced primarily through the Steinberg Sports & Entertainment agency, led by Steinberg and Chief Operating Officer Chris Cabott.

You can read the rest of the story here: bit.ly/202u228

The Riverside Company (formerly VSS Riverside) has added PRIMA Eye Group to its Independent Doctors of Optometric Care (IDOC) platform. PRIMA provides consulting services and purchasing programs to independent optometrists in the U.S.
Based in Atlanta, PRIMA serves nearly 400 practices representing almost 900 optometrists. PRIMA is a consulting firm and alliance devoted to helping independent optometrists through every stage of their optometric business, providing one-on-one consulting from a team of experts in marketing, human resources and practice financial analysis to help grow practice revenue.

The full story is here: bit.ly/1JlOdGe

A recent Wall Street Journal blog suggests that biotech venture investors are expecting a slowdown this year despite coming off a record 2015 investing season.

The blog, written by Brian Gormley, says “while fourth-quarter venture capital funding slid in most industries amid fears of an economic slowdown, biotechnology investment sprinted ahead.

The question is how long the run can last.

“Total U.S. venture funding reached $72.30 billion in 2015, its highest level since 2000, despite fourth-quarter investment declines in consumer services, information technology, and other markets, according to industry tracker Dow Jones VentureSource. Biotech was an exception, capturing $2.47 billion last quarter, a 25% jump from Q4 of 2014. A record, $8.95 billion pumped into biotech for the year drove total medical investment to a new peak of $16.10 billion. That was 34% above the previous high of $12.04 billion, reached in 2014.”

Read the entire blog post here: on.wsj.com/1RVvEvh

Evan Vitale – What Happens If You Get Audited?

by

By Evan Vitale

Being audited by the Internal Revenue Service has not only been the punchline of many jokes and personal jabs, but it’s also one of those life moments that strikes fear into the hearts of many.

However, should you ever receive notice of an audit, here are a few steps and tips you can take in order to make the process go a little smoother for you:

  • The best way to prepare is to have a tax adviser on your side. He or she will not only help you with your questions and concerns, but it’s also the best way to be represented before the IRS. They will know how to find the solutions for your tax audit problems and will be able to respond to any auditor suspicions.
  • If you are a small business owner, your professional accountant knows how to reduce your chances of being audited. Want to avoid being audited? Don’t have a careless tax return. Keep personal deductions and business deductions separate. Keep good records of all expenses and be exact. Never round up numbers.
  • Sometimes, small businesses are audited because they deal in cash and, thus, money is sometimes not properly reported to the IRS.

In addition, small business owners often claim personal deductions and business deductions. Small business owners should always keep excellent records just in case of a potential tax audit.

Also, sometimes a small business is informed that their deductions were not allowed as the IRS may claim that their “business” is really a “hobby.” If this should happen you may need quality audit representation to review your returns and your deductions.

Should you ever be audited by the IRS, they will verify bank records, deposits, income, expenses, deductions, payroll taxes, employee classifications and other financial records.

Evan Vitale – Protecting Your Identity During Tax Season

by

By Evan Vitale

As if tax season isn’t stressful enough, it’s also prime time for identity theft.

“A thief who has your personal information can file a tax return before you do, collect a fraudulent refund and leave you waiting for many months to get your own refund and clear up this problem,” said Neil Chase, vice president of education at LifeLock.

Identity thieves use stolen Social Security numbers and other personal information in order to file false tax returns. Some of their methods include:

  • Callers impersonating IRS agents calling victims and telling them they owed taxes and needed to pay by a wire transfer or by a prepaid card.
  • Sending e-mails asking for personal information, social security numbers or birth dates.
  • Untrusting employees at your doctor or dentist office asking for personal information.

If anyone asks for any personal information always ask them why they need it.

As we are now into full tax season, the Internal Revenue Service is working diligently with state tax authorities and the tax industry to address tax-related identity theft and refund theft. Stronger protections have already gone into place for this upcoming tax filing season. One of these changes will be new security requirements when you’re preparing your taxes online, especially when you sign in to your tax software account. Other changes will be invisible to taxpayers, but are in place to help federal, state and local tax offices.

Even with protections in place, the IRS doesn’t see processing time slowing down and plans on processing nine out of 10 federal refunds within 21 days.

To help protect yourself even further from identity theft, the IRS suggests the following tips:

  • File as early as you possibly can. The IRS will start taking tax returns on January 31, 2016.
  • Do not throw away financial statements, tax returns and other personal information in the trash. Instead, make sure these documents are properly shredded.

Evan Vitale – What Is ‘Royalty’ Financing?

by

By Evan Vitale

As a good alternative to venture capital funding – and a funding that is hardly ever discussed – is “royalty funding.”

What exactly is royalty funding?

Royalty funding is described as a relatively new funding concept that offers an alternative to regular debt financing (i.e. loans and trade credit) and equity financing (i.e. venture capital and stock sales). Instead, in royalty funding, a business receives a specific amount of money from an investor or a group of investors.

Rather than have an equity stake in your business, the investors lend funds for a guaranteed percentage of your revenues for whatever the business is selling. Business owners guarantee investor(s) a percentage of their revenue over a period of time and pay them back the advance of cash (and some more). Deals usually run at 2% to 6% of increased revenues.

Typically, royalty financing is more common in well-established industries, such as music or mining, where revenue is steady but unpredictable.

Royalty funding is great for businesses who need a quick infusion of cash, but don’t want to give up control to equity investors. In addition, if the business suffers a down month in sales, payments are tied to a percentage of revenues, so there’s less need to worry about making a set loan payment, etc.

However, royalty funding can be expensive and businesses could eventually pay substantially more if sales take off. Remember? The funding is based on a royalty of your sales.

Some private equity firms and angel investors are willing to make royalty investments.

As always, seek advice from your team of experience professionals: your accountant, your lawyer and your banker. They may also be able to refer you to a firm that is interested in providing royalty funding.

Evan Vitale – Latest Venture Capital News

by

By Evan Vitale

Here’s the latest and greatest on venture capital news:

From the Tampa Bay Tribune, local startups are already kicking into high gear and earning some notice from venture capital firms from Silicon Valley with many new programs getting some attention in Clearwater and St. Petersburg.

Check out the full article here: bit.ly/1PbBG8P

In Boston, Assemble.VC is looking to raise a $75 million initial fund, according to a recent SEC filing. Word has it the fund is more than halfway closed so far. More information and other Boston VC news can be found here: bit.ly/1Qrbvfj

iNovia Capital Inc., Montreal, says it has raised $175 million (Canadian dollars – US $120.2 million) for its latest venture-capital fund, overcoming the challenge of a sinking currency that puts Canadian firms investing in startups at a disadvantage to their United States counterparts.

Previously, iNovia attracted $110 million (Canadian) for each of its two previous funds.

The full Wall Street Journal article is here: on.wsj.com/1OGHyDn

Orange County continues to make venture capital headlines with startups landing $1 billion in venture capital in 2015, a first since the dot-com bust in 2000. Software and medical device firms made up most of the closed deals a year ago.

According to a MoneyTree report from Pricewaterhouse Coopers and the National Venture Capital Association, investors last year put their money into 88 deals in Orange County as compared to 148 deals (and $1.7 billion) in 2000. Two years ago, $683 million was invested in 89 deals.

In July 2015, Google Capital led a $100 million investment round in CrowdStrike, an Irvine-based cyber-security technology company, to expand its reach across the United States and internationally. This investment tied for the 10th-largest in the country since 1995.

According to PwC, venture capital in Irvine, California has increased 85% since 2010.

The full article is here: bit.ly/1lFovkt

Evan Vitale – Financial Advice If You Win The Lottery

by

By Evan Vitale

Oh, we’re probably all, at one time or another, dreamed about winning the lottery. Big money, big house, fancy cars and endless beach vacations are all nice visions.

However, before you start spending your lottery jackpot, consider that many winners who are unprepared for sudden wealth later find themselves broke after a few years because they didn’t properly manage their winnings. One such Indiana winner quit his job and purchased real estate and expensive automobiles for family members only to return a few years later to the job he left.

The National Endowment for Financial Education estimates that 70% of all lottery winners go through their winnings within a few years.

California, however, is trying to reverse that trend. The California Lottery has created a handbook containing information on how winners can better manage their lottery prizes. In addition, it has “Win Wisely” videos available on its YouTube channel.

“While the lottery doesn’t have the obligation to give any advice at all, we do want people to be prepared for how their life will change and make smart decisions,” says California Lottery spokesman Alex Traverso. “We want to give them the opportunity to start off on the right foot.

Some big money winners, for instance, control the urge to splurge and live comfortably off their interest earned from their lottery prize money.

One huge tip in the California Lottery handbook advises winners to assemble a team of advisers including an investment expert, an attorney and an accountant. Some suggest that you find advisers who have experience working with large sums of money.

The true jackpot in any lottery isn’t winning the prize. Instead, it’s about how you spend – or save – your money after collecting the check.

Evan Vitale – The SBA and Venture Capital

by

By Evan Vitale

The Small Business Administration has, among other informative web pages helping businesses on a variety of topics, an interesting section explaining venture capital.

The SBA’s “Venture Capital” page (https://www.sba.gov/content/venture-capital) features several sub-sections including:

  • About Venture Capital
  • Understanding Venture Capital
  • Angel Investors
  • Understanding Equity Capital
  • The Venture Capital Process

The primary “About Venture Capital” page fully defines venture capital and how it differs from other traditional financing. For example:

“Venture capital is a type of equity financing that addresses the funding needs of entrepreneurial companies that for reasons of size, assets, and stage of development cannot seek capital from more traditional sources, such as public markets and banks. Venture capital investments are generally made as cash in exchange for shares and an active role in the invested company.”

“The Venture Capital Process” section offers detailed information on submitting a business plan, conducting due diligence, investment, execution with VC support and exit.

The information, while accurate and short, doesn’t offer any opinions as to the positives and negative reasons why a startup would want to seek out (or avoid) venture capital.

The Venture Capital section is a sub-section of the “Finance Your Business” which also includes sub-sections on loans and grants – all of which is a chapter in the SBA’s “Starting a Business” category.

The Loans section references SBA Loans; a Business Loan Application Checklist; SBA Loan Application Checklist, and Acquiring Financing.

The Grants section offers a brief explanation about grants and notes that the federal government does not provide grants for starting or expanding a business. Some grants, however, are available through state and local programs.

Of note, the “Starting A Business” guide does include a section on “Filing and Paying Taxes” as well as sections covering “Business Law;” “Hiring Employees;” “Registering Your Business” and more.

You can see the full section here:

https://www.sba.gov/category/navigation-structure/starting-managing-business