Exits and Entries

Sometimes, things happen all at once. In the 10-day period surrounding the writing of this article, I have had:

• Exit: from RnDGrp. We started this a few months ago to create a disabled veteran business to help get government grants. However, the government insists that no control be in place by anyone not a disabled veteran, or something to that effect, so I decided to step out. Formally, the exit just happened for $1 - an infinite multiple of my investment. I guess you cannot get any better than that...
• Entry: GJG Holdings - now a portfolio company, focuses on mergers and acquisitions. Money from wherever we can legally get it without giving up our own equity, acquisitions of companies synergistic to our mission.
• Entry: ELN - Enterprise Leadership Network, a conference company focused on cyber security and digital forensics (for now) that brings together leadership (CxO level for the most part) from entities of all sorts and sizes to discuss issues of mutual interest.
• Entry: Cognitive Defense, a company focused on countering influence operations through Human Risk Management, now approved for funding and growth.
• Entry: OTG, a company focused on industrial cyber-security for executives, in particular, operational technology, Internet of Things, and critical infrastructure cyber-security security governance.
• Entry: TrustWorthy, a development effort to form a company focused on addressing the real issues in trust architecture for enterprises. Zero trust cannot work, and unlimited trust does not work, so we need something in between. That is what trust architecture is about.

The paperwork

If you have ever started a company, you know how much paperwork there is - right? Multiply that by 6 and you have an idea of what I did for the week... or... probably you don't! I thought that might be of some interest.

How did we close all these deals in this little time?

We should start about 9 months ago... but rather than bore you with all the details, we opened the process on most of these more than 6 months ago. The actual new entry entities were started into the process about 3-4 months ago, and one of them came into focus within the last 2 months.

All of them went through our standard due diligence and pitch process, we generated GWiz™ metrics, did pricing analysis, cash flow analysis, market analysis, a detailed descriptive, got information into deal rooms, drafted and negotiated contracts, went back and forth on employment agreements, licensing agreements, projections, governance and management, intellectual property and special sauce, marketing and sales, and so forth.

That was the setup process, and it took a lot of effort by many folks over an extended period. But at some point you need to get over the action threshold and execute a deal, or not. So how do you do that?

Time for a party!

Yes, that's correct. The next step was a party - a 3-day party - day 1 and 2 at a high quality hotel overlooking the ocean in Monterey, and the next day at my house with meals, meetings, slides, non-alcoholic drinks, deserts, a walk, a song, song and dance, and near the end of the day after most folks were gone, signing of a few deals.

For many investors, meeting the people involved in person is the only way they will invest. I am not that way myself, but I certainly like to see the proof of what I am buying.

In this case, the party started on Monday morning with the ELN event in Monterey. I visited the vendor tables in the morning, met some of the staff, chatted with Chris (the boss), had a little breakfast, and greeted some of the other folks who came to town for the party. Then I went back to my place to prepare for the next 2 days, helped track the folks arriving in town, and generally kept out of the way.

Tuesday 0800 the meet and greet started, and as I tracked other folks coming to town, air delays, hotel stays, etc. I appeared on a panel, watched other folks on our team coming to the event on their panels, met new folks, watched and discussed the rest of the event, and made sure everything was going well across the board, which it was. That evening we did final preparations for day 3 - at my place.

Wed 0700 - out for a walk. 0800 finish setups for the party. 0900 The Cyber Show on the air, sent final reminders to all folks, made sure they could get in the gate, told them to listen to the show on the way in. 1000 - the party started.

• Meet and greet - only 17 day-3 folks - all arrived in a 30 minute window. They got coffee, snacks, and came into the office area. Got a quick tour of the place so they could go where needed for private chats, etc.
• Overview of the day and introduction to the team from the Philippines. Everything from where the bathrooms are to how to refill their coffee.
• 1.5 hours of round the room introductions and background, life history, and current situation for everyone. This is perhaps the most important part. Where we all learn about each other and come to be friends and build a working relationship.
• Lunch - then a walk to the ocean and along the shore. Along the way, one deal was finalized verbally, to be completed in paper by the end of the day.
• Presentations followed lunch with several companies doing demonstrations of technology and business cases. Small groups broke off from time to time to chat, folks went to get more coffee, and so forth.
• Departures promptly (give or take) around 4PM, except of course for a few folks where we had deals to close.
• Deal one - a deal required to finalize deal 2 - signed sealed and delivered by 7PM. Deal 1 DONE
• Deal two - signed sealed and delivered by 8PM. Deal 2 DONE
• Final negotiations on Deals 3 and 4 completed with paperwork to be finalized and approved by Friday.
• 9PM Everyone finally out the door.

Thursday - back to the normal 10 meetings per day... Details of deals reviewed during calls with companies and the advisory group notified of deals 1 and 2.

The next 4 days

Friday:

• Deal 5 - did the final paperwork for the exit, presented at an online government workshop with the other part to the deal on the call, we agreed to the final in the run-up to the workshop and the final paperwork was completed before the end of the workshop. Deal 5 DONE
• Deal 6 - got approval to proceed from the new pending CEO. Based on that, provided final details for starting the run-up process to the folks with the funding source, and got their preliminary approval pending final paperwork.
• The funding source went out to dinner with a key backer who has approval of investments by the fund. I shut down for a day.

Saturday: rest - sleep in - recover.

Sunday: Record presentations for Go To Angel, finalize the radio show for the following Wednesday, start the process of integrating the companies from Deals 1 and 2 into the portfolio, write monthly articles, and setup for the flurry on Monday...

Monday: delays due to illness of funding sources - lasted most of the week.

Wednesday: Authority to proceed from the funding source on Deal 6, awaiting funds transfer to actually proceed. Met (LOR) with the CEO-to-be to lock it all down.

A call to action

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In summary

The ceremony is the result of all the work that went into it. And you can have a lot of ceremonies in a short period of time. But getting there takes lots of time and effort. And you can still screw it up even at the very end.