Great Advice for Board Candidates (and Boards) By: Mark Rogers -BoardProspects

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Sometimes we are not fortunate enough to realize great advice until it is too late.  Several months ago I met a seasoned board member (of public, private and non-profit boards) and we had a long discussion about board of directors’ qualifications.  He provided me with a piece of advice that I’m sure many corporate board members wish they had before joining their board.  The advice? “Never join a board of directors unless you would be willing to serve as chair of that board.”

Serving as chair of a board is not easy.  The title carries with it additional board member responsibilities that are often unrecognized by fellow board members.  So why would anyone be willing to ascend to this position?  For some it is the prestige of the title:  “she serves as Chair of the Board for XYZ Corporation.”  For those serving on non-profit board of directors, it is often a labor of love related to the mission.  In the public company space the title comes with additional compensation.  Whatever the reason may be, it is not a position for everyone who serves on a board of directors – which is why the advice from this esteemed board member seemed so odd to me.  He acknowledged that not everyone is meant to serve on a board of directors and not every board member is meant to serve as chair of the board.  But, when an individual agrees to serve on a board they should at least be willing to serve as chair of that board if they are ever asked.  Such willingness demonstrates both the individual’s commitment to the organization as well as their understanding of what may be expected of them.  It also ensures that the individual will ascend to the position of board member with the appropriate motivation to learn what would be necessary to eventually serve as chair.  The result is a board that is at all times working together to achieve the level of excellence which is expected of it by the organization and its stakeholders.

This advice is extremely useful for any organization as they engage in board member recruitment.  Although I do not believe the willingness to serve as chair of the board needs to be added to a list of board of directors’ responsibilities, it is a worthwhile question to pose to prospective candidates, providing tremendous insight into their commitment to the organization.  Whether the individual has the commensurate capabilities to serve as chair of the board can only be determined through their board service.

Source: Great Advice for Board Candidates (and Boards) By: Mark Rogers -BoardProspects

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Network Marketing Stats That May Surprise You!

A friend and business associate of mine, Eric (E.J.) Dalius has made a consistently successful career in network marketing or multi-level marketing as many know it as. You know, the ones that hold informational meetings at the Ramada Inn out by the interstate your buddy from school keeps dragging you to with promises that you can retire if you only worked at it part-time at home? Yeah, those deals! Yuck right?No thanks, you say as I always have.

Only the top people in those make any money, everybody knows that right?

Well that used to be the case but network marketing as it’s called now has grown up and you may want to take another look at it before you get that pink slip in your mail slot at work. According to Dr. Josephine Gross, Editor in Chief of Networking Times: 

Recent research from the U.S. Direct Selling Association reports unprecedented growth in network marketing, in terms of both retail sales and the number of people involved. This growth shows the vibrancy of the model as an unmatched opportunity for entrepreneurship. Customers gravitate towards the personal touch network marketing provides, Technological advancements have helped the channel to continuously evolve. This report presents some facts and reasons why network marketing has grown in a turbulent global economy and why the business model is poised for continued growth over the next several years.”

The number of people involved in the U.S. grew from 18 million to 20 million in 2015, an 11% increase from the previous year. While network marketing continues to attract predominantly women, the business model represents every generation and is generally reflective of America’s diverse population.

Network-Marketing-Facts

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A Bidding War For Advisory Board Company

abc-logoThe post below is an excerpt from the recent Ensemble Capital Quarterly Conference Call. You can read the full transcript here.

I’d like to provide a brief update on Advisory Board Company (NASDAQ:ABCO), whose stock has doubled since March of this year. As we described in our blog post about the company written at that time, Advisory Board provides software and consulting services to help hospitals reduce the cost of healthcare while improving patient outcomes.

The US healthcare system is fundamentally inefficient to a degree far out of step with the rest of the world. While Americans pay 50% more per capita for healthcare than the best-in-class healthcare system provided in Switzerland, the life expectancy here is as low as that seen in Chile and the Czech Republic, who spend 75% less per capita than we do. As you can see in the chart we published in our post on the company, healthcare systems around the world fall on a curve that neatly describes the relationship between per capita spending and life expectancy. The US is the only country where this relationship between spending and outcomes is fundamentally broken.

Earlier this year, market participants sold Advisory Board stock down to its cheapest valuation in history outside of the 2008-2009 financial crisis. Investors were concerned by the slowdown in Advisory Board’s revenue growth and worried that the company’s significant push into providing services to higher education institutions was a mistake, despite education suffering from similar issues around weak student outcomes in relation to runaway costs.

As with all of our assessments of a company’s fair value, we focus on cash generation. Both of Advisory Board’s businesses generate outstanding levels of distributable cash flow even while offering long-term growth potential.

Earlier this year, the activist investment firm Elliot Associates, run by famed hedge fund manager Paul Singer, recognized the disconnect between Advisory Board’s public market price and the actual intrinsic value of the business. After taking an 8% position in the company, Elliot Associates pushed the company to sell itself, likely splitting up the education and healthcare business to two separate buyers. The stock has been rapidly appreciating ever since, rallying over 10% in early July as Bloomberg reported that United Health was emerging as the leading bidder for healthcare while private equity firm Vista was the most likely bidder for the education business. With earlier reports suggesting over 20 bids had been submitted for the company, it seems clear that no matter what price the company ends up selling for, or even if a deal falls through, Advisory Board is a company with significant intrinsic value that the market has underappreciated.

Source: A Bidding War For Advisory Board Company

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Houzz raising $400 million at $4 billion valuation

 

Home improvement platform Houzz continues to grow and is in the process of raising another huge round of funding. The company confirms that it is raising $400 million in new financing, at a valuation that multiple reports peg at around $4 billion.

Founded in 2009, Houzz provides a platform to help users renovate and remodel their homes, as well as providing tools for finding furniture and fixtures they might want to purchase. The company has users all over the world, in markets that include the U.S., U.K., Australia, France, Germany, Russia, Japan, Italy, Spain, Sweden, and Denmark.

It makes money mostly through paid listings for local home professionals and service providers, but has been delving more deeply into direct commerce through the introduction of deep learning and AR products it’s added to its website and mobile apps.houzz

Last fall it introduced a deep learning tool that analyzes home photos added to the site and enables users to search for and purchase comparable products directly from the page. It also added an AR feature to its mobile app that enables users to preview what new pieces of furniture might look like in a certain place in their home.

The newest funding round, which Recode reported is being led by Iconiq, comes on top of more than $200 million that Houzz had raised from investors that include Sequoia, New Enterprise Associates, GGV Capital and others.

Source: Houzz raising $400 million at $4 billion valuation

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Cryptocurrency ICO Education – The Basics

Initial-Coin-Offering-ICO-600x400Over the past few months, there has been an increased focus on cryptocurrency ICOs. These initial coin offerings are a great way for investors to buy into a project at an affordable price. At the same time, the project developers try to raise as much money as possible to finish their creation as soon as possible. It is a well-balanced ecosystem, but a lot of people are still confused about certain ICO aspects. In this series, we will try to address some concerns people still have.

THE BASICS OF ANY CRYPTOCURRENCY ICO

As most people should be familiar with by now, buying into a cryptocurrency ICO is the same as backing a project on Kickstarter or IndieGala. Investors receive a reward for pledging money to the cause, even though not all of these projects may succeed in the end. Unlike traditional crowdfunding campaigns, cryptocurrency ICOs do not accept credit cards or other traditional payment methods. Most projects only accept investments in either Ether or Bitcoin, albeit some projects accept additional currencies and tokens as well.

There is another similarity to cryptocurrency ICOs and crowdfunding projects. It is always of the utmost importance to invest as early as possible. In the case of a cryptocurrency ICO, early investors often received a specific percentage of tokens on top of the regular amount. These bonuses can either be time-based or based on the amount of tokens sold already. As we have seen with a lot of recent ICOs, time to buy in is incredibly limited, though.

Even though these similarities between cryptocurrency ICOs and crowdfunding projects should not be overlooked, that is far as both concepts can be compared. With a crowdfunding project, backers can often get a refund of their money if the project fails to deliver. That is not necessarily the case with a cryptocurrency ICO, although most projects lock funds in a smart contract. By using this technology, it is a lot easier to refund investors if needed, albeit that happens very rarely these days.

Moreover, it is always a good idea to check how many tokens will be generated during a particular cryptocurrency ICO. A lot of projects issue a billion tokens or more, which theoretically makes it impossible for them to gain any major value. That is a common misconception, though, as cryptocurrency ICOs often increase their value a tenfold or more in the first few months. Most of these tokens are quickly listed on exchanges, which means there will be plenty of liquidity as well.

Speaking of the number of tokens being issued, there are two creation models projects can make use of. First of all, there is the static supply option with a predetermined value. This means a fixed number of tokens will be issued which will always be sold at the exact same price. This levels the playing field for both early and “late” investors alike. It is possible this method will be considered less attractive by speculators, since there is no option to buy cheaper coins. Then again, these tokens often see their value appreciate over time just as well as other projects.

Source: Cryptocurrency ICO Education – The Basics

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How does one mentor young people online?

Stephen G. Barr

Stephen G. Barr

Mentor, Advisor, Strategist, Angel Investor, Publisher, CEO

Author & Group Publisher SGB Media Group, Startup America Partnership Member, Microsoft BizSpark Graduate, Member Microsoft Partner Network, Startup Weekend Winning Team Member, Ignite Speaker, Syndicate Lead & Top 4% Ranking on AngelList (company), Accredited Investor Crowdfunder, Fellow Center For Progressive Leadership, Senior Advisor to CEO at Pingtank.com, Council Member Gerson Lehrman Group, Inc., Reputation Management Advisor Saivian International, Ltd., Venture Partner CrunchBase, Accredited Investor & Champion StartEngine (Funding Portal), Charter Member Crowdfunding Best Practices…

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