Evan Vitale

Accounting Professional

Evan Vitale – What’s New In VC News?

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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?

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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

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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?

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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

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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 – The SBA and Venture Capital

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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

Evan Vitale – What’s New in VC News?

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By Evan Vitale

Good news is coming out of Washington, DC as venture capital deals have hit their highest point since 2001.

According to the Washington Post, a few large deals during the fourth quarter, helped 2015 become a big year for investors and startups. In all, 29 DC firms received over $550 million in venture capital last quarter, a 53% increase from 2014, according to a report released recently by Pricewaterhouse Coopers and the National Venture Capital Association.

During 2015, DC companies were able to secure 169 deals totaling $1.41 billion – up from 197 deals totaling $1.09 billion in 2014.

You can read the full Washington Post article here: bit.ly/1WqBC6B

* * *

Meanwhile, companies in Wisconsin raised $87.8 million of venture capital in 2015, according to a national report printed recently by the Milwaukee Wisconsin Journal Sentinel.

In all, 23 Wisconsin companies pulled in $87.8 million, which is only a fraction of the $58.8 billion in venture capital that went into high-potential companies across the United States.

While Wisconsin’s numbers were better last year than in 2014, the state’s share of the national venture capital continues to remain low.

Biotech and medical device companies raised a combine $56.8 million, or 64% of all the state’s venture funding in 2015.

You can read the story here: bit.ly/1ZJHo8V

* * *

According to The Seattle Times, the state of Washington – which generally ranks among the top five states in venture capital investments – dropped to No. 12 during the fourth quarter of 2015.

Startups in Washington raised $167.7 million with 25 deals during the quarter – a 57% drop from the same period a year ago, when $389.6 million was invested in 29 deals, according to the MoneyTree report released recently from PricewaterhouseCoopers and the National Venture Capital Association.

You can read the full article here: bit.ly/1U9csYQ

Evan Vitale – Utilizing Business Trends

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By Evan Vitale

While you don’t need to be on the cutting edge of every trend, your business can experience some short-term and long-term success by watching and following recent business trends.

Trend watching is especially important in making sure your business doesn’t suffer or go obsolete while your competitors move forward because they took full advantage of a trend.

Take for example, Blockbuster Video. Once a dominate player in video cassette tape rental, Blockbuster didn’t make the switch to DVDs in time and suffered a painful death. By the time Blockbuster jumped on the DVD trend, Netflix and other companies were already offering DVD rentals to your door.

When was the last time you observed at trends in your industry?

Again, you don’t have to be on top of every industry-based news story, but you should be aware of what’s going on in your industry and where and how things are moving. Some of the best ways to do this include:

  • Reading online industry news.
  • Subscribe to online industry newsletters and other publications.
  • Creating Google Alerts based on targeted keywords in your industry.
  • Attending and participating in annual industry conferences. Here, you should be meeting with and talking to vendors; sales reps; media and others in your industry. Be a sponge at conference.
  • Keep an eye on your competition and see how they are reacting to trends. Don’t copy them. Instead, develop your own ideas for services and products based on trends.
  • Become more active in social media and read the industry buzz.
  • What’s everyone talking about? Don’t watch from the sidelines.
  • Get involved in the social media conversation.

Many trends move quickly. Some catch on right away, while others take time. Start now by catching up on recent trends and try to generate some ideas to help grow your business based on recent trends.

Evan Vitale – 2016 Housing Market Forecast

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By Evan Vitale

Are you looking to buy or sell a home in 2016? If so, what will the market be like during the upcoming year? Will it be a buyer’s market with deals aplenty, or are the sellers in charge over the next 12 months?

As with any prediction story, there will always be two sides.

However, according to most housing experts:

Current homeowners should expect another good year of solid gains in housing prices. After the housing bust four years ago, prices have been moving steadily higher. Most are predicting another gain in the middle single digits, while there are some expectations that prices nationwide could be close to the all-time high reached a decade ago.

If you’re looking to sell your home, the market conditions should be good. Due to the historically low number of new and existing homes for sale, it will create more of a seller’s market this year.

While this might cause homeowner prices to rise, potential buyers are benefiting from an improving job market, continued low mortgage rates and easier credit. Note: fixed mortgage rates are probably not going to stay below 4% much longer in 2016, but they don’t appear to rise sharply either.

The Federal Housing Administration, which helps first-time buyers get mortgages, cut its fees last year and it may do so again soon as its finances continue to improve. This will allow more first-time home-buyers a better opportunity to get into a new home in 2016.

Where are the hot real estate markets in 2016?

According to Zillow.com, low unemployment, rising home appreciation and strong income growth, Denver will be the hottest residential real estate market in the United States this year.

Following Denver, according to Zillow, will be Seattle, Dallas-Fort Worth, Richmond, Virginia and Boise, Idaho.

Zillow predicts Denver homes will appreciate by 5% in 2016 and expects income to grow 1.1% along with an annual unemployment rate of 3.1%. Those three factors, says Zillow, make Denver the hottest real estate market this year.

Evan Vitale – Asking For A Raise

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By Evan Vitale

At times we all probably feel that we’re under-appreciated – and under-valued when it comes to working a part-time or full-time job. We put in the hours, do what we’re asked to do, arrive early, leave late and go the extra mile for the company.

However, a good performance review doesn’t necessarily mean you’ll be guaranteed the kind of raise in salary that you’re looking for (or hoping for) in 2016. At best, most only expect a cost of living raise. But can you ask for more?

The best way to get that well-deserved raise is to know how to properly ask for it. Here are some basic strategic steps you can take before you ask for a raise:

Do some research around the company as it pertains to pay raises. Refer to the company handbook or ask older employees their experiences when it comes to seeking a pay increase.

Keep track of your work accomplishments and job performance and have it handy when it comes time to asking for a raise. If necessary, create charts or graphs to help prove your case. If you can show that you’ve save the company time and/or helped the company improve sales, increase profits or cut expenses, then it will be easier for them to answer “yes” to your raise request.

Keep in mind what the local market will bear. If the cost of living is 3% and the current market value for someone of your job status is $50,000 per year, don’t expect  – or ask – for a $10,000 pay increase. Be reasonable.

Ask for a meeting with your boss and let them know ahead of time what the meeting entails. Be confident in your request and have your facts ready when it comes time to let your boss know why you’re an asset to the company and deserving of a raise.