The TikTok Moment – lessons learned from the modern day Sputnik Moment of #DigitalTransformation

Free Stock Photo of Leadership Concept with Paper Airplane Created by Jack Moreh

This is a Guest blog post from Jet Lu, digital innovator and digital transformation leader who is Director of Digital DevOps for the City of Baltimore.

On October 4, 1957, the Soviet Union launched the world’s first artificial satellite, Sputnik 1, from the Baikonur Cosmodrome. It was perceived as a technological gap between the United States and Soviet Union, and caused public fear and anxiety. Days later, president Dwight Eisenhower addressed the nation with a subdued message: “So far as the satellite itself is concerned, that does not raise my apprehension-not one iota,”. However, it wasn’t long before Eisenhower declared the true crisis and threats the United States must confront. The true crisis and propaganda coup as the result of Sputnik was not truly suppressed until 10 years after, when we put the first and only humans on the surface of the moon. That is still standing true until this very day.

We got over the crisis and took lead in the competition by accepting the competing factors, and excelling ourselves to be the best at it. We have to give the same sense of urgency and priority to digital transformation.

In August 2020, executive orders were issued aimed to ban social media platforms TikTok and WeChat. These may not be familiar names to many prior to the political hype, but it does not change the fact that they have 500 million and 1 billion active users respectively. There’s a global competition over artificial intelligence, cyber security, digital connectivity, and digital influence. Unfortunately, we do not have a solid lead in the race anymore, and some analyst may say we are losing the lead position. If you haven’t come to the realization this is at the same scale, if not greater, than the historic Sputnik crisis, then you have positioned yourself behind the eight ball. 

We have hit a ‘TikTok moment’, and I want to coin this phrase. I want our children to remember this moment and what it means in history. Why? Because once again, we are in reactive and defensive mode. It is the crossroads of a modern day revolution, a digital revolution. We should use this as fuel for digital transformation to truly come out ahead of the race from this ‘TikTok’ crisis.

We have long been in the state of a developed country. However, have we achieved being the first digitally developed country? The digital equity issues across the States screams “digital crisis.” The digital world is borderless, and it invites your competitors to your front steps. It can be a healthy competition though, or even a healthy collaboration if handled right. It is not all necessarily negative. We must take the right steps as we confront the challenges and threats it presents, and take aggressive and transformative steps forward. I’m not a politician. I’m a transformation leader, and in today’s world, the focus is digital transformation. Banning TikTok or WeChat is an attempt to avoid the risk, but there are more effective steps we should take in order to mitigate the risks & threats in a more transformative way.

Lesson #1: Honor the duct tape solutions, and take them seriously

Digital innovation has been disruptive for quite some time, from the dotcom era (from 1995 to the dotcom bubble burst in 2000), to physical to cyber, and now cyber to physical. Much of how we are adapting to the digital solutions are seen as duct tape approaches, such as injecting social media usage to existing sales & marketing outreach, as well as employee engagement.

Two reasons to take these duct tape approaches seriously: First, businesses use the new digital capabilities creatively. The business value we could extract from a particular technology is only limited by the appetite of an organization to try new things, and take on calculated risks. Just as there’s not only one right use for duct tape. Second, it is a misconception that these digital duct tape solutions are temporary. As technology disrupts the status quo, we can expect to strategize using these digital equivalents of duct tape as a long term approach. We should come to the realization that how we used to run our businesses is becoming the band-aid we should rip off quickly to minimize the pain.

The China-based messaging app, WeChat, served as the most popular duct tape solution testbed for personal and business use in China. Just as Mark Zuckerberg once said that “private messaging, ephemeral stories, and small groups are by far the fastest growing areas of online communication”, and messaging is at the core of Facebook’s future. WeChat is taking a similar approach. Today, WeChat is the go-to app for personal messaging, group messaging, information sharing, ride hailing, making payments, receive payments, and digital wallet. These are just a few of the digital duct tape equivalents that have proved their effectiveness.

Lesson #2: Don’t be afraid to challenge established ecosystems

This is exactly how technology such as TikTok, WeChat, and many others are disrupting the digital maturity we proudly exhibit. For example, our banking industry is an established ecosystem with very mature endpoint capabilities. Businesses are able to equip themselves to accept different means of payment, and Point of Sale (POS) support is very common. In many parts of the world, affordability to join this ecosystem continued to be a major challenge. Square disrupted this space by lowering the cost of entry and improving the end user experience. Furthermore, platforms like WeChat and Alipay disrupted the space again by providing a contactless and zero-cost endpoint support alternative, the pay by QR code option. This is by far the most impactful digital duct tape equivalent in 3rd world and developing countries. Today, WeChat and Alipay QR code payment is the default method of payment for over 1 billion users globally. This digital duct tape has earned a permanent seat at the high table.

Lesson #3: Digital Transformation has a leading role in responding to today’s business challenges

One thing we have to be very clear about is that digital transformation equals business transformation in the current landscape. What digital transformation is NOT, is to simply make changes on how your IT supports your business. Technology is an enabler, but how you apply and mobilize it to transform your business is the key. Because it takes enterprise level leadership to take the charge in shifting the culture, transform operating processes, bridge knowledge gaps, and repurpose resources. There are deliberate implications to all areas of an organization, such as procurement, legal, product development, sales & marketing, business administration, manufacturing, and etc. 

The low hanging fruits of digitization in a mature business environment are digital workers, digital influence, and turning data into action. 

Digital Workers

The concept of digital workers, via Robotic Process Automation, is a widely adopted and practical way to apply to operational challenges that are time consuming and repetitive. Robotic Process Automation solutions are not meant to replace human workers, but to enable workers to do more while eliminating human errors. The human worker still owns the business intelligence to support the delivery of the business value. Robotic Process Automation is perfect for business processes that contain tedious tasks such as data processing, user notification, task hand-off, document routing, calculations, calling APIs and etc.

Digital Influence

In today’s world, influencers do not have to spread their ideas in person. With the help of digital technology, mass outreach is immediate, targeted, and traced. Most importantly, audience feedback works the same way. This is being used heavily today, not only in businesses’ sales & marketing campaigns, but also political campaigns. 

The effectiveness is beyond the traditional media. Today’s technology enables influencer campaigners to predict personality traits, consumption habits, as well as political orientation of their target audiences. Then through a series of effort to put information in front of their audience, while the messages may be directly or indirectly related to the objective, to shape or shift the audiences’ decisions. The decisions are often perceived as your own without even realizing the influencing factors. A study of the infamous case of how Cambridge Analytica turned data from Facebook that was publicly available into political campaign tools, makes me ponder just how powerful and destructive it can be for data to be in the wrong hands. Especially for those who have possession of your private data.

While that may be a bit extreme, but a simple digital outreach to get information to your audience, and automate the feedback loop from your audience, is definitely a low hanging fruit.

Turning data into action

Many organizations today are looking for innovative ideas with different motives. Some are trying to align solutions to their digital transformation strategy, some are for making the headlines, and some are trying to improve existing Key Performance Indicators (KPI). However, a common misconception is that it has to be a new product or solution. There are so many existing products and solutions that were put in place and never executed to its full potential. In most cases, leveraging data from existing solutions is a low hanging fruit to upgrade these solutions to realize additional business value.

In a panel discussion earlier this year, I talked about exactly how this applies to the Internet of Things (IoT) solutions, and how we can turn existing Operational Technology (OT) into IoT solutions by the convergence of Information Technology (IT) and Operational Technology (OT). If we look at all IoT solutions in stages of maturity, I would have to agree with John Rossman. The four levels of IoT are

  • Level 1: tracking capabilities – this is where a single device collects data, but the value it provides is limited, and it is only available to the owner of the data.
  • Level 2: insights and adjustments – this level of IoT devices comes with sensor based analytics, and data is captured in the cloud. There may also be simple analytics and machine learning algorithms applied to the data. However, there’s no real-time adjustment, and there’s no network value where it connects & interacts with other devices.
  • Level 3: optimizations – this is where a network of devices are in play, and based on the data generated, they are making real-time and automated adjustments.
  • Level 4: network coordination – this is the ultimate goal and the most powerful state of IoT solutions. At this level, insights and actions are improved with not just one type of devices in the network, but variety of devices. In addition, the network is capable of handling entry and exit of devices to the network.

Many IoT solutions that were put in place by businesses and local government are of Level 1. As a matter of fact, many legacy operational technology solutions that are in use today can be considered as Level 1 IoT solutions. What they all have in common is the opportunity to level up to Level 2 or Level 3 by simply putting the data to work.

Lesson #4: Regulatory effort needs a sense of urgency

Digital transformation is not just about tech solutions, it should be include the full package of solutioning and operationalizing the solution with the support of necessary laws, regulations, and policies.

Today, mobile devices are tethered to users worldwide running a variety of applications, and they are generating an immense amount of data. The number of devices and data streaming agents per capita is growing by the day. The challenge is no longer who can obtain the data, but how we regulate a level playing field to embrace it, exploit the opportunities, control the risks, and stay ahead of it. When mobile phones were first widely adopted, getting information from an individual isn’t a secret weapon anymore. This also means minimal cost of entry to leverage real-time point-to-point communication. Such technology was once only accessible and affordable by businesses and military use. Technological advancement caused a shift in the society and put the power in the hands of individuals. To that extent, smart mobile devices ignited disruption in many areas. Some were not so obvious at the time, such as ride hailing services. There are risks and threats from every piece of technology, but there are also opportunities. Risk and threat mitigation is not as simple as disallowing the use of new tech. We are still dealing with phone scammers today, but we have legal and regulatory support. Most importantly, we have innovated beyond that and gained new grounds and new competitive advantages.

Conclusion

The overarching lesson to be learned is that we must get serious about digital transformation. We have to do it now, and we have to do it right. The impact on our economy and our quality of life will be substantial, and the impact is in all industries.

A stroll through Chinatown anywhere in the world will give you a taste of the Chinese culture. A few good ones will even make you feel like you are visiting China. Authentic food, sounds of the native tongue, and structures and signs resembles the culture to a tee. But it does not stop there. Paying for food and services just as they do in China is widely adopted as well. That’s right, it’s part of the culture to have a QR code in front of every cash register of every business. Customers open their WeChat app and scan the QR code to transfer funds from their WeChat wallet to the vendor’s WeChat wallet. The Chinese Yuan moved from one account to another in China, and never set foot in a foreign market, with zero recorded impact on the GDP of where the products and services were provided – and zero taxes collected!

That’s just one example of a problem created by not being in the front of digital innovation. With enough of these kinds of problems, we will find ourselves in a crisis. However, looking at it from a different angle, these are good problems to have. It means that someone is trying to do something right, a ripple effect is created. There are opportunities in every crisis. We should not panic, but instead exploit the heck out of those opportunities so that we can come out ahead of the TikTok crisis.

Jet Lu is a digital innovator, speaker and digital transformation leader. He is Director of Digital DevOps for the City of Baltimore and can be reached at jet.lu@outlook.com.

How to Use CRM to Add Value to Your Sales Team

This is a Guest Blog Post by Chris Tully.

Your customer relationship management (CRM) software system is filled with details about the people and companies most important to your business. But are you using CRM to add value to your sales team?

If you haven’t set up a CRM system to actively monitor and effectively track the steps your sales team takes with business opportunities, then you’re both walking around with your eyes closed. You can’t see what the sales team is doing – and neither can they.

If It’s Not in CRM It Didn’t Happen

About one-third of small to mid-sized businesses I encounter don’t have a CRM system. They are still managing the business on email and spreadsheets. About half of the remaining businesses have purchased CRM software but haven’t fully implemented it. Still others use their CRM for marketing or customer service, but not sales – missing the value of integrating the functions.

In my opinion, if sales activities are not visible in CRM they didn’t actually happen. I’d go so far as to say that if your sales team closed a deal that was not in CRM, hold back the commission. That may sound draconian, but I believe you’d only have to do that once to make the point.

Sales CRM is highly effective for the money. You and your team have the ability to see leads as they are captured, follow the progression of contact and communication through your sales stages, and easily record results. This allows the sales leader to be a more effective coach, gives immediate visibility to results, and provides some insurance if one of your salespeople leaves.

In the bigger picture, capturing all stages of the sales cycle allows you and the team to analyze what works best and recreate the most successful steps – continually refining and improving your sales effectiveness and growing your business.

CRM Guides the Sales Path

Clearly defining sales stages is valuable for your team. For example, Salesforce CRM software allows you to customize the objectives of each stage, enabling a sort of “guided path” to follow. Within the software, there are a series of questions that have to be answered positively before someone can progress. Seeing the hurdles that have to be cleared to reach those objectives can only help your sales force improve.

A good CRM helps the team better quantify sales leads. They can build a qualification score to see how strong each lead is (or becomes) by assigning points as the deal progresses. For example, is a compelling event driving the customer’s decision on the deal? Is an economic ROI stated or implied? Has the decision maker gotten involved in the evaluation of your proposal? All of this allows you as a leader to monitor progress and assess effectiveness.

The more disciplined your sales team is in following an effective, repeatable process and quantifying deals against the rubric you set up, the better they will be as salespeople and the more you’ll increase your company’s sales.

CRM Engagement Is Key to Adding Value

In order for your sales team to embrace CRM, the system has to:

  • Be easy to use
  • Add value by supporting and guiding the sales process
  • Be the “ground truth” of all sales reporting to and by company leadership

Promote engagement by taking two giant steps to successful CRM implementation: get used to asking questions of your sales team that can only be answered by referring back to the CRM, and make your CRM the source for all sales reporting in the company.

You’ll be able to quickly customize reports to illustrate specific sales performance indicators, and visually represent the team’s up-to-the-moment performance in the key metrics you choose to display on your dashboard.

Choosing a CRM System

There are at least 10 good cloud-based CRM systems out there that can meet the needs of most sales teams. There are also sites to help you decide which system to choose. Final choice will be your personal preference, but from my perspective you can’t go wrong with SalesforceHubSpot, or Pipedrive.

Selection and implementation are important. However, engagement is what will make or break CRM effectiveness. The single most important quality of a CRM system is that it adds value to your sales team – it should make their work easier, and help them be more successful.

Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”

Impact of new Lease Standards on Tech and Life Sciences Companies

This is a Guest blog post from Ling Zhang., CPA.

With many companies struggling to fully implement the last ...

 

When the Financial Accounting Standards Board (FASB) met on May 20, 2020 to address the impacts of the COVID-19 pandemic, they voted on a one-year effective date deferral of Accounting Standards Codification (ASC) Topic 842, Leases, which will result in a modified effective date for private companies and certain private not-for-profit entities for fiscal years beginning after Dec. 15, 2021, and interim periods with fiscal years beginning after Dec. 15, 2022, once the final standard is issued (expected June 2020). Private companies in technology and life sciences, particularly with significant operating lease activity under current lease accounting guidance, can take advantage of the delayed ASC 842 effective date to prepare for implementation.  

FASB originally issued Accounting Standards Update (ASU) 2016-02 in February 2016. Accounting Standards Codification (ASC) Topic 842, Leases, along with several subsequently issued related ASUs, which amended the accounting guidance for leases.

GENERAL ASC 842 REQUIREMENTS

Under ASC 842, a company is required to recognize leases with terms greater than 12 months on its balance sheet. Specifically, lessees are required to recognize the following at lease commencement:

ASC 842 represents a change for operating leases that were historically considered “off balance sheet” obligations. FASB believes a balance sheet presentation of leases will provide a clearer view of a company’s future commitments with operating leases recognized on the balance sheet.

Under ASC 842, leases recorded on the balance sheet will be classified as either finance leases or operating leases, which will determine the presentation of the related expense in the income statement. Finance lease arrangements will result in depreciation and interest expense recorded each reporting period similar in manner to existing capital leases under legacy guidance. Operating lease ROU assets and liabilities will be amortized and accreted, respectively, to develop a straight-line rent expense presented as lease expense in the income statement.

SPECIFIC CONSIDERATIONS FOR TECHNOLOGY AND LIFE SCIENCES COMPANIES

The delayed ASC 842 effective date provides additional time for technology and life sciences companies to prepare for implementation. Specific considerations prior to implementation include:

1. Impact to Balance Sheet and Financial Ratios

Technology and life sciences companies should expect increases in balance sheet amounts (e.g., long-term assets and both current and long-term liabilities) for operating leases. Companies with significant existing operating leases may be surprised by the impact on reported balance sheet amounts. These financial statement changes may impact certain financial ratios, including current ratio, leverage ratio and debt service coverage ratios.

Example: How ASC 842 Can Affect Key Metrics

As many technology and life science companies use cash flow-based lending, the example below provides the potential effects on the balance sheet and the associated debt service coverage ratio. Some do not consider operating lease liabilities as ‘debt’ for purposes of calculating debt-based ratios and you can expect that there may be diversity in practice. Technology and life science companies should confirm with their lenders in advance their view of the treatment of ASC 842 operating lease liabilities with regard to covenant calculations.  Understanding the impact on key metrics early is advised. The following is an example showing the impact on certain ratios when operating lease liabilities are considered debt.

Balance Sheet Impact

Notice how the reporting of ROU assets and lease liabilities increases the total amount of assets and liabilities on the balance sheet after adopting the new standard.1

Balance Sheet
Prior to adopting ASC 842 After adopting ASC 842
Cash  $                    500,000  $                  500,000
Accounts receivable                        750,000                      750,000
Inventory                     2,000,000                   2,000,000
Total current assets                     3,250,000                   3,250,000
PPE                        500,000                      500,000
Capitalized software                     1,500,000                   1,500,000
Operating lease ROU asset                                 –                      900,000
Total non-current assets                     2,000,000                   2,900,000
Total assets                     5,250,000                   6,150,000
Deferred revenue  $                 2,100,000  $               2,100,000
Accounts payable and accruals                        550,000                      550,000
Long-term debt, current                        100,000                      100,000
Operating lease liability, current                                 –                      250,000
Total current liabilities                     2,750,000                   3,000,000
Long-term debt, net of current portion                        400,000                      400,000
Operating lease liability, net of current portion                                 –                      650,000
Total non-current liabilities                        400,000                   1,050,000
Total liabilities                     3,150,000                   4,050,000
Equity                     2,100,000                   2,100,000
Total liabilities and equity  $                 5,250,000  $               6,150,000

1) In this example, it is assumed that the lease liability in an operating lease. However, if the lease liability was classified as a finance lease, the ROU asset could be included within PPE.

Debt Service Coverage Ratio Impact

Debt service ratio coverage is a common financial covenant found in debt agreements. As illustrated below, the ratio may significantly change with the adoption of the Standard.

Debt Service Coverage Ratio
Prior to adopting ASC 842 After adopting ASC 842
Net income                                  500,000                                500,000
Depreciation expense                                    50,000                                  50,000
Interest expense                                    20,000                                  20,000
                                 570,000                                570,000
Interest expense                                    20,000                                  20,000
Current portion debt
and capitalized leases
                                 100,000                                350,000
                                 120,000                                370,000
Debt service coverage ratio                                        4.75                                       1.54

 

Many technology and life sciences companies may find that certain metrics and loan covenants are impacted due to the changes in the balance sheet as a result of adoption. Companies should give priority to their financial statement and disclosure changes for the purpose of maintaining compliance with their loan covenants. As previously discussed, companies should also engage in early communication with their lenders regarding the potential impact on financial covenants and whether the lenders will take these changes into consideration when analyzing the company’s performance.

2. Lease Population Completeness Considerations

During the ASC 842 transition, all leases should be identified. While many leases may seem straightforward, such as leases for real estate or equipment, others may be embedded within other service contracts. For example, a router that is utilized as part of an internet service arrangement may be considered a leased asset. By electing the package of three transition practical expedients, companies are allowed to not reassess the following:

  • whether any expired or existing contracts are or contain leases;
  • lease classification for any expired or existing leases; and
  • indirect direct costs for any existing leases.

 

Embedded leases are commonly found in the following arrangements:

A lease exists if a contract conveys to a company the right to obtain substantially all of the economic benefits from use of the identified asset and the company directs the use of the identified asset. An identified asset must be physically distinct and specified in the contract. The existence of substitution rights may indicate a specific asset has not been identified. Under Topic 842, substantive substitution rights exist when a supplier has the practical ability to substitute alternative assets throughout the period of use, and the supplier would benefit economically from the exercise of its right to substitute the asset. When evaluating the existence of a lease, companies also need to assess if the use of the identified asset is significant. If another party’s use of the identified asset is more than insignificant, the contract does not convey control of the identified asset, therefore, the contract does not contain a lease.

 

The following are some examples where judgement and further analysis may be required to determine the presence of a lease component.

 

REVENUE CONTRACT WITH CUSTOMER – SUBSTITUTION RIGHT

A: SaaS contract with hosting arrangement – identified asset without substantive substitution rights

Facts: A software company enters into contracts with its customers to host software on the software company’s servers, each of which is designated to a specific customer. The contracts do not allow the software company to substitute the server for another one without consent of its customers.

 

Analysis: An embedded lease may exist (even without an explicit lease agreement) considering that the server is dedicated to a specific customer, and the software company does not have “substantive substitution” rights for the server.

 

B:  SaaS contract with use of equipment – identified asset with substantive substitution rights

Facts: A company enters into a contract with a customer that includes SaaS services and the use of a designated computer medical cart through the term of the SaaS services. The company has the option to swap the medical cart with another one at any time.

 

Analysis: The Company can swap the medical cart with another one at any time during the term of the contract. Therefore, the “substantive substitution” rights criteria has been met, and the use of the computer medial cart is not considered a lease.

 

MEDICAL SUPPLIES PURCHASE CONTRACT – IDENTIFIED ASSET WITHOUT SUBSTANTIVE SUBSTITUTION RIGHTS

Facts: A bio-tech company enters into a medical supplies contract, which requires the purchase of consumables and test kits for research and development purposes exclusively from this supplier for the term of five years. As part of the arrangement, the supplier also provides the equipment for testing at no charge. The equipment is installed and customized for the bio-tech company, and the contract does not allow the supplier to substitute another equipment without the approval of the bio-tech company.

 

Analysis: A lease may exist since the equipment is specified in the contract and designated to the bio-tech company; At the inception of the contract, the supplier does not have substantive substitution rights to the equipment and it is not feasible that the equipment can be easily substituted by the supplier.

 

INFORMATION TECHNOLOGY (IT) SERVICE CONTRACT – IDENTIFIED ASSET WITHOUT SUBSTANTIVE SUBSTITUTION RIGHTS

Facts: A technology company enters into a network services and security agreement with an electronic data storage provider. The services are provided through a centralized data center and use a specified server (Server No. 9). The supplier maintains many identical servers in a single accessible location and determines, at inception of the contract, that it is permitted to and can easily substitute another server without the customer’s consent throughout the period of use.

 

Analysis: Based on the facts above, the vendor can interchange the underlying asset without the customer’s consent. As the asset is interchangeable in nature and service and is not dependent upon the specific asset, there is no lease based upon the “substantive substitution” rights criteria.

 

ADVERTISING CONTRACT – SIGNIFICANCE OF USE

Facts: A company enters into a marketing services agreement which encompasses a variety of marketing and advertising vehicles, one of which includes electronic billboards.

 

Analysis: Although this contract could be written as a marketing services agreement, the right to use one or more billboards may result in a lease if the billboard is specifically identifiable and dedicated to the company, and the company obtains significant use of the billboards throughout the term of the contract. Understanding if other parties have the right to advertise on the billboards and the significance of those other arrangements will be important to determining if a lease exists.

 

Considerable judgement is involved for each example when reviewing a contract for embedded leases. A slight alteration in facts and circumstances may result in a different conclusion. Keep in mind that if there is a specifically identified asset dedicated to a party, it is likely to contain a lease. Further, predominance and significance of the activity will impact lease related decisions and conclusions.

 

3. Negotiation of Future Arrangements

The impact of ASC 842 may be an important factor in evaluating whether to structure the acquisition of assets as lease arrangements or purchase arrangements going forward. Further, Topic 842 may have implications on other accounting standards such as revenue recognition. The consideration of future arrangements will be particularly important for companies with significant lease activities as many such lease arrangements may move on to the balance sheet under the ASC 842. Technology and life sciences companies should identify and perform an inventory of all existing leases, including embedded leases, in conjunction with forecasting needs for future assets. The company can then evaluate and plan for these future needs with a clear understanding of the trade-offs between lease and purchase arrangements.

 

4. Tax Impact

ASC 842 will have a noticeable impact on financial reporting for lessees, but the effect on taxes may not be obvious. The new lease standard does not change lease accounting for federal income tax purposes. Therefore, without a corresponding change in tax basis, deferred tax accounting may be impacted. Implementation of ASC 842 could result in new deferred tax assets, liabilities or additional book to tax differences in a company’s income tax provision. Under ASC 842, lease assets are subject to impairment, which is often reversed for tax purposes. Technology and life sciences companies should understand and plan for the potential tax impact.

 

5. Assurance Perspective

Technology and life sciences companies audited by an independent public accounting firm should maintain relevant documentation of the ASC 842 implementation process, as the independent auditor may require the documentation in order to complete the audit. Such documentation should include evaluation of lease classification as finance or operating, selection and application of the transition method, discussion of any practical expedients applied, basis for significant assumptions such as discount rate and the company’s lease identification completeness procedures, including evaluation of embedded leases.

 

6. Future Operations, Processes and Related Controls

To comply with ASC 842, companies will likely need to implement changes to their current control environments and business processes. Companies should establish policies and procedures to address ongoing considerations such as initial assessments of new contracts, appropriate interest rates and lease modifications, as well as develop methods to appropriately capture financial disclosure information. Significant judgement will be required to assess lease terms through an ASC 842 lens, specifically related to lease term, allocation of lease payments to lease and non-lease components, and remeasurement events.

 

CONCLUSION

By delaying the effective date for non-public business entities, FASB has created an opportunity for technology and life sciences companies to fully consider the impact of ASC 842 and prepare for the upcoming transition.

 

As a Senior Manager in the DHG Technology practice, Ling Zhang, CPA, works closely with client management and C-suite executives to provide audit, financial accounting advisory, and risk advisory services to multi-national publicly-traded corporations and private companies with revenues ranging from $10 million to $50 billion. She advises clients on SEC filings, complex debt and equity transactions, merger and acquisition, new accounting guidance implementation, internal control system design and implementation, and financial statements reporting and disclosures. She can be reached at ling.zhang@dhg.com.

How Innovation Companies Find Liquidity in the COVID-19 Economy

This is a Guest blog post from Ling Zhang, Senior Manager at Dixon Hughes Goodman LLP. She covers a lot information which is extremely valuable for small businesses. 

CASH IS KING | Armstrong Economics

“Cash is King” for businesses, especially when they are drifting in the rough currents due to COVID-19. What can technology, services, and life science companies do to survive the challenges and thrive through oppotunities in the current economic conditions? Here are a few considerations for innovative companies to manage cash flow since the pandemic’s inception.

 

Small businesses start to see relief through Paycheck Protection ...

Utilizing the CARES Act and New Laws and Legislation

Businesses have been following new legislation closely and, when possible, taking advantage of cash flow assistance from the federal government to increase liquidity. The following is a list of programs created by the CARES Act that support small businesses:

Lender letter for PPP application documentation - SynergySynergy

1. Paycheck Protection Program

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress had appropriated $349 billion for the Paycheck Protection Program (PPP), providing loans of up to $10 million to certain qualified small businesses, and also offering forgiveness for
all or a portion of the loan. As the first round of PPP funding has been utilized, a new funding package has been approved for the PPP for $480 billion, which appropriated an additional $320 billion for the PPP.

The new funding package, passed on April 24, 2020, also includes $60 billion for the Disaster Loans Program and Emergency EIDL Grants.

 
2. Small Business Debt Relief Program

This program will provide non-disaster Small Business Administration (SBA) loans, specifically 7(a), 504 and microloans not made under the PPP. Under this program, all payments on these SBA loans, including principal, interest and fees, are covered by SBA for six months.

 
3. Economic Injury Disaster Loans & Emergency Economic Injury Grants

The program provides loans up to $2 million and emergency advances up to $10,000 that are not required to be repaid.

The CARES Act also has the following tax provisions available:

1. Employee Retention Credit

A refundable payroll tax credit for up to 50 percent of wages paid to certain employees is available to eligible employers during the COVID-19 crisis through Dec. 31, 2020. This credit is not available to employers receiving

 

2. Delay Payment of Payroll Taxes

Taxpayers can defer paying the employer portion of certain payroll taxes during the period beginning on the Act’s date of enactment and ending on Dec. 31, 2020. Half of the deferred amount is due on Dec. 31, 2021, and the other half is due on Dec. 31, 2022. For PPP loan recipients, the Internal Revenue Service (IRS) FAQs1 clarify that taxpayers may defer the employer portion of Social Security on wages paid between March 27, 2020, and the date which the lender issues a confirmation of loan forgiveness for the recipients’ PPP loan.

 

3. Other Tax Provisions to Accelerate Cash

Other tax provisions include correction of Qualified Improvement Property depreciation; use of excess business loss and Net Operating Losses; and use of Corporate AMT Credits. Consulting with a tax professional may help increase cash flows through maximizing tax refunds and tax planning for the business. Please reach out to your tax advisor to evaluate possible solutions as these may be complex decisions.

 

4. Main Street Lending Program to Provide Liquidity to Small and Mid-Size Businesses

These four-year term loans are for companies that have less than 15,000 employees and $5 billion in revenue and have a minimum loan size of $1 million. The loans are generally available even if you have received a PPP loan and there is currently no indication of “affiliation” rules that disallowed many private equity portfolio companies from eligibility for the PPP loans. The loan size is generally based on a multiple of 2019 earnings before interest, taxes, depreciation and amortization (EBITDA), which can be adjusted as permitted by lending institutions, and includes existing debt.

The Families First Coronavirus Response Act (FFCRA) also provides refundable tax credit as follows:

Eligible employers are entitled to refundable tax credits for qualified leave wages that are paid, during the period beginning April 1, 2020 and ending Dec. 31, 2020, for specified reasons related to COVID-19 under the FFCRA.

Federal and state governments are continuing to evaluate
additional assistance to businesses.

China's New Development Stage: Challenges and Opportunities ...

Turning Challenges into Opportunities

Many leaders of technology, life sciences and service companies, including technology giants and small businesses, have pivoted during the pandemic in different ways by identifying opportunities, and taking immediate action to generate cash to secure a future for their employees while contributing, in their own unique way, to find a vaccine.

Examples include life sciences and medical device companies developing and selling antibody or COVID-19 testing kits; tech manufacturers making ventilators; SaaS software companies offering free HR applications to help manage the health and safety of employees; cyber security information technology services companies developing tracing technologies and providing services to help mitigate cyber security and privacy risks of work-from-home arrangements; services firms providing assistance on the interpretation of new legislation; and more.

 

70% of SMEs try to manage Cash flow themselves | EFM
Managing Cash Flows

Tech and life sciences companies should also assess key performance indicators (KPI), monitor budget versus actual analyses more closely and frequently, and deploy a plan to manage cash flows through the pandemic and beyond. Companies can consider the following areas to manage internal cash flows in response to the current environment:

1. Accelerate accounts receivable collections through active collection efforts and/or evaluating new technologies to allow customers new payment methodologies;

2. Manage vendors by initiating dialogue and negotiations with extended or delayed payment terms;

3. Classify expenses by variable versus fixed, and consider plans to cut spending on variable expenses where possible. Seek concessions on fixed expenses such as rent abatements, delay in payments, or extended payment terms;

4. Evaluate plans to reduce salary expenses including furloughs, salary reductions, and/or a reduction in force;

5. Seek additional financing opportunities through loans or use of availability on lines of credit;

6. Revise and develop new cash flow forecasts from operations for various scenarios – three-to-six months or even longer if necessary.

 

As a Senior Manager in the DHG Technology practice, Ling Zhang works closely with client management and C-suite executives to provide audit, financial accounting advisory, and risk advisory services to multi-national publicly-traded corporations and private companies with revenues ranging from $10 million to $50 billion. She advises clients on SEC filings, complex debt and equity transactions, merger and acquisition, new accounting guidance implementation, internal control system design and implementation, and financial statements reporting and disclosures. She can be reached at ling.zhang@dhg.com.

Internet Legend Doug Humphrey and Sid Banerjee, CEO of Clarabridge Featured at Big Idea CONNECTpreneur Fall, 2014 Forum

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The next Big Idea CONNECTpreneur FORUM is coming up this Thursday, September 11, 2014 in Tysons Corner, Virginia.
 
Doug Humphrey, CEO of JETCO Research and Founder of DIGEX and Cidera, will moderate the Panel of Venture Capitalists and Angel Investors.
 
Sid Banerjee, Founder and CEO of Clarabridge, will talk about his company’s story, growth, and bright prospects for the future.
 
The Big Idea CONNECTpreneur Forums are quarterly gatherings of 300+ of the DC Region’s TOP Entrepreneurs, Business Leaders, CXOs, Angels, and VCs.
 

The event is regarded by many as “The Best Networking Event in DC.” InTheCapital calls CONNECTpreneur a “NETWORKING JACKPOT” of the DC Region’s TOP Entrepreneurs, Business Leaders, CXOs, Angels, and VCs.

CONNECTpreneur events are “essentially the be-all-end-all of networking events in the city” 

The “premier networking event in DC tech and investing”, CONNECTpreneur is “networking on steroids”

The Big Idea CONNECTpreneur Forum is a “Networking Jackpot.”

Presented by appnetic, Tech 2000 and LORE Systems, this UNIQUE EVENT is like NONE OTHER in our region, because of the high quality of its attendees, speakers and presenters.

And YES, the networking is unprecedented!

 
 
Program Highlights:
 
  • We expect 300 business leaders, includng 175+ CEOs & Founders, as well as 60+ angels & VCs
  • Conversation with Sid Banerjee, Co-Founder and CEO of CLARABRIDGE
  • All-Star Panel of INVESTORS
  • SHOWCASE of Emerging tech companies
  • Heavy NETWORKING before, during, and after the event
 
The venue is the Tysons Corner Marriott in Tyson’s Corner, Virginia.  A plated breakfast is included.  CONNECTpreneur is a quarterly networking mashup, which has been attended by over 2500 business leaders in the past 3 years. We expect another SELL OUT crowd, so there will be no on-site registration.
 
All attendees MUST BE pre-registered.  Register now!
 
 
And visit our Website.
 
 
DATE:  SEPTEMBER 11, 2014
 
AGENDA
 
7:00–8:15 am – REGISTRATION / NETWORKING
 
8:15 – 8:20 am – WELCOME
 
8:25 – 9:15 am – FIRESIDE CHAT with SID BANERJEE,Co-Founder and CEO of Clarabridge
 
9:15 – 10:15 am  –  COMPANY SHOWCASE
 

10:15 – 11:15 am –  ALL STAR INVESTOR PANEL:  LATEST TRENDS IN VENTURE CAPITAL AND EARLY STAGE FINANCING

 
Introductions: JEFF REID, Founding Director, Georgetown Entrepreneurship Initiative
 
Moderator:  DOUG HUMPHREY, Serial Entrepreneur, Angel Investor, Internet Pioneer, President of JETCO Research; Founder and CEO of DIGEX and CIDERA.
 
JOHN BURKE, General Partner, True Ventures
JIM PASTORIZA, Managing Partner, TDF Ventures
 
11:15 am – NETWORKING
 
 
EXPECTED INVESTOR PARTICIPANTS (partial list):
 
We expect 65+ angel and VC investors including Core Capital, Grotech, Novak Biddle, New Atlantic Ventures, Revolution Ventures, True Ventures, Edison Ventures, Amplifier Venture Partners, SWaN & Legend Venture Partners, RLMcCall Capital Partners, Multiplier Capital, Updata, Saratoga Investment Corp., DFW Capital Partners, Farragut Capital, NextGen Angels, CIT GAP Funds, New Markets Venture Partners, BluVenture Investors, Leeds Novamark, Maryland Venture Fund, TEDCO, 1776 / K Street Capital, Fortify Ventures, Acceleprise, US Boston, VentureCross Partners, Berman Enterprises, Dingman Center Angels, Neuberger & Co. Ventures, McLean Capital, Angel Venture Forum, Exhilirator, National Capital Companies, Enhanced Capital, MTECH Ventures, Mosaic Capital, Opus8, Starise Ventures, Blue Heron Capital, Duncaster Investments, Private Capital Network, Next-Stage Development Group, Lancaster Angel Network, Harrell Partners, Stanford Venture Advisors, MD Center for Entrepreneurship, Conscious Venture Labs, Great Falls Capital, Hafezi Capital, and Keiretsu Forum.
 
 
EVENT PARTNERS:
 
 
 
 

Seth Goldman of Honest Tea headlines CONNECTpreneur Fall Forum

Seth Goldman, Co-Founder and TeaEO of Honest Tea

The Big Idea CONNECTpreneur FALL FORUM will be held on September 10, 2013 at the Tysons Corner Marriott in Tysons Corner, Virginia.

Seth Goldman, TeaEO of Honest Tea will do a fireside chat to discuss his new book, Mission in a Bottle: The Honest Guide to Doing Business Differently – and Succeeding.

The Big Idea CONNECTpreneur Forums are quarterly gatherings of 250+ of the DC Region’s TOP Entrepreneurs, Business Leaders, CXOs, Angels, and VCs.

InTheCapital says CONNECTpreneur events are “essentially the be-all-end-all of networking events in the city”

Presented by LORE Systems and Tech 2000, Inc., this UNIQUE EVENT is like NONE OTHER in our region, because of the high quality of our attendees, speakers and presenters.

Program Highlights:
  • We expect 250 business leaders, includng 150+ CEOs & Founders, as well as 60+ angels & VCs
  • Conversation and BOOK SIGNING with SETH GOLDMAN, Co-Founder and TeaEO of HONEST TEA
  • Attendees will receive a COMPLIMENTARY copy of Seth’s brand new book,Mission in a Bottle
  • All-Star Panel of INVESTORS
  • SHOWCASE of Emerging tech companies
  • Heavy NETWORKING before, during, and after the event
The venue is the Tysons Corner Marriott in Tyson’s Corner, Virginia.
A plated breakfast is included.
CONNECTpreneur is a quarterly networking mashup, which has been attended by over 1200 business leaders in the past 18 months.  This event promises to be our best one yet!
DATE:  SEPTEMBER 10, 2013
 
AGENDA
7:00–8:15 am – ARRIVAL / NETWORKING
8:15 – 8:20 am – WELCOME
S. TIEN WONG, CEO of Tech 2000, Inc. and Chairman of Lore Systems, Inc.
8:20 – 9:05 am – ALL STAR INVESTOR PANEL – “State of the Capital Markets”
 
MODERATOR:  JOHN BACKUS – Founder & Managing Partner, New Atlantic Ventures
 
EVAN BURFIELD – Managing Partner, K Street Capital; Co-Founder, 1776and Chairman, Startup DC
 
JOE BURKHART – Managing DIrector, Saratoga Investment Corp.
 
DOUG GILBERT – General Partner, DFW Capital Partners
9:05 – 10:15 am  –  COMPANY SHOWCASE
APPNETIC
CONSCIOUS VENTURE LAB
10:15 – 11:05 am – FIRESIDE CHAT with SETH GOLDMAN, Co-Founder and “TeaEO” of HONEST TEA;  Co-Author, MISSION IN A BOTTLE, The Honest Guide to Doing Business Differently – and Succeeding
11:05 – SETH GOLDMAN BOOK SIGNING and NETWORKING
Attendees will receive a complimentary copy of MISSION IN A BOTTLE
 
EXPECTED INVESTOR PARTICIPANTS (partial list):
We expect 60+ angel and VC investors including Grotech, Novak Biddle, Core Capital, New Atlantic Ventures, Edison Ventures, Updata, Saratoga Investment Corp., DFW Capital Partners, Farragut Capital, Revolution Ventures, CIT, New Markets Venture Partners, Leeds Novamark, Maryland Venture Fund, TEDCO, DFW Capital, BluVenture Investors, 1776 / K Street Capital, Acceleprise, US Boston, VentureCross Partners, Berman Enterprises, Dingman Center Angels, Neuberger & Co. Ventures, Saratoga Investment Corp., Multiplier Capital, McLean Capital, Angel Venture Forum, Endeavor DC, National Capital Companies, Enhanced Capital, MTECH Ventures, Mosaic Capital, Opus8, Starise Ventures, Blue Heron Capital, Duncaster Investments, Private Capital Network, Next-Stage Development Group, Lancaster Angel Network, Harrell Partners, Stanford Venture Advisors, MD Center for Entrepreneurship, Great Falls Capital, Hafezi Capital, and Keiretsu Forum.
EVENT PARTNERS:  
 

DC “Networking Jackpot” – Big Idea CONNECTpreneur Fall Forum, September 13, Tysons Corner

LORE SYSTEMS is pleased to host our quarterly Big Idea CONNECTpreneur Forum, one of the most exciting angel and entrepreneurship networking forums in the DC Region on September 13, 2012 at the Tysons Corner Marriott.

InTheCapital called our June Forum “The Best Networking Event in DC.”

We also appreciate InTheCapital’s latest article on our upcoming Fall Forum: “Three Reasons Why You Should Attend the Big Idea CONNECTpreneur Forum.”

Please come out!  CLICK HERE to Register via the Eventbrite link.

The Big Idea CONNECTpreneur FALL Forum is a “NETWORKING MASHUP” of 210+ of the DC Region’s TOP Entrepreneurs, Business Leaders, CXOs, Angels, and VCs.  Most of the attendees are “INVITATION ONLY,” and we are limiting service provider participation in order to maximize the experience for our Attendees and Sponsors.

Presented by LORE Systems, this UNIQUE EVENT is like NONE OTHER in our region, due to the high quality of our attendees and participants, as well as our program and unprecedented networking.

Come see what happens when you put a group of “A List” business leaders and entrepreneurs in one room for a few hours!

Program Highlights:
  • Over 210 attendees, includng 120+ CEOs/Presidents and 40 angels/VCs
  • Conversation with CEO, VC Advisor, & Angel Investor Christopher M. Schroeder
  • Discussion with UBER Tech Entrepreneur David A. Steinberg
  • SHOWCASE of Emerging tech companies
  • NETWORKING sessions before, during, and after the event
The venue is the Tysons Corner MARRIOTT.  A plated breakfast and unlimited coffee are included.

FINAL AGENDA
7:00–8:00 am – ARRIVAL / NETWORKING
 
8:00 – 8:10 am – WELCOME
 
8:10 – 8:45 am – Conversation with Christopher Schroeder,
Renaissance Man, Entrepreneur, CEO, Advisor, Angel Investor, and Author
Author, Arab Inc(ubate)
Co-Founder and CEO, HealthCentral, formerly DrKoop.com (an InterActiveCorp company)
CEO, Washingtonpost.Newsweek Interactive
CEO, LEGI-SLATE
 
8:50 – 9:25 am  –  Conversation with David A. Steinberg,
UBER Tech and Marketing Entrepreneur
Chairman & CEO, CAIVIS Acquisition Corp.
Founder, Chairman & CEO, InPhonic / Simplexity (NASDAQ:INPC)
9:30 – 9:45 am – NETWORKING BREAK
9:50 – 11:15 am – COMPANY SHOWCASE
11:30 am – NETWORKING
CONFIRMED PARTICIPANTS (partial list):
Over 120 CEOs/Presidents, plus 40+ angel and VC investors including New Enterprise Associates, Novak Biddle, Core Capital, CIT, Blu Venture Investors, Blue Water Capital, Dingman Center Angels, Neuberger & Co. Ventures, Saratoga Investment Corp., Washington DC Archangels, Angel Venture Forum, Fortify.vc, Endeavor DC, Maryland Venture Fund, National Capital Companies, Enhanced Capital, White Hall Capital,  MTECH Ventures, Mosaic Capital, Opus8, VentureCross Partners, McLean Capital, Starise Ventures, Blue Heron Capital, Duncaster Investments, Private Capital Network, Next-Stage Development Group, Berman Enterprises, Grindstone Partners, Next Stage Development Group, Atlantic Capital Group, Lancaster Angel Network, Harrell Partners, Stanford Venture Advisors, MD Center for Entrepreneurship, Skada Capital, Great Falls Capital, Bayberry Capital, Hafezi Capital, Keiretsu Forum, and CADRE.
EVENT SPONSORS:  
 
LORE Systems
BDO
Wilson Sonsini
Deloitte.
Cooley LLP
Meltzer Group
AH&T Insurance
McBride Real Estate
Ryan & Wetmore
Washington, DC Archangels
Dingman Center for Entrepreneurship
Angel Venture Forum
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InvestMaryland Wins Big, Raises $84 million for VC program

Last week, the State of Maryland became the first state in the USA to use an online auction to raise funds for a venture capital program.  The auction yielded $84 million, a whopping 20% more than the original forecasted goal of $70 million.  On September 24, 2011, I wrote a brief summary of the InvestMaryland program.

InvestMaryland will invest in the State’s promising start-up and early stage companies, as early as this summer.  The $84 million raised was generated through an online auction of premium tax credits to 11 insurance companies (including Hartford Insurance, New York Life, Chubb, GEICO, and Met Life) with operations in Maryland.  The inaugural round of investments will be made in innovative companies this summer through several private venture capital firms and the State’s successful Maryland Venture Fund (MVF),

Said Governor Martin O’Malley, “Our State is well-positioned to be a leader in the new economy as a global hub of innovation – a leader in science, security, health, discovery and information technology. That’s why last year, together with business leaders from across the State and the General Assembly, we chose to invest in our diverse and highly-educated workforce and the skills and talents of our people for the jobs and opportunity of tomorrow.”  

The InvestMaryland program is being implemented through the Maryland Venture Fund Authority, on which I am very proud to serve, as well as the Maryland Department of Business and Economic Development (DBED).

Earlier this year, the Authority selected Grant Street Group to prepare for and run the tax credit auction and also recently selected Altius Associates, a London-based firm, to oversee the selection of three to four private venture firms to invest the InvestMaryland funds. The private venture firms will be responsible for investing two-thirds of the funds, which will return 100 percent of the principal and 80 percent of the profits to the State’s general fund. The remaining 33 percent will be invested by 17-year-old Maryland Venture Fund (MVF).  The Maryland Small Business Development Financing Authority (MSBDFA) will also receive a portion of funds for investment. Returns on the funds invested through the MVF will be reinvested in the program.

InvestMaryland has the potential to create thousands of jobs in Innovation Economy sectors – life sciences and biotechnology, cyber security/IT and clean/green tech and attract billions of follow on capital.

Maryland has an outstanding infrastructure to support an Innovation Economy. The Milken Institute ranks Maryland #2 in the nation for technology and science assets. According to study results, while Maryland received high rankings in human capital investment, research and development inputs, technology and science workforce, and technology concentration and dynamism, it lagged behind other states in risk capital and entrepreneurial infrastructure, demonstrating the need for InvestMaryland and other programs.

How will Altius select the Venture Capital firms?  Altius will be evaluating venture capital funds based on management experience, firm experience, investment performance and criteria defined in the legislation.

When will the firms be selected?  Venture capital firms will be selected starting June/July 2012 for a projected18-month period and make first round of investments in summer 2012.

What is the investment return to the State? The selected venture firms will return 100 percent of the principal investment by the State before taking any distribution of profits and will then pay 80 percent of the profits to the State.  Any returns on investments made through the Maryland Venture Fund go back into the fund for an evergreen program.

What is the projected average investment with venture capital companies? Investment will likely range from as low as $250,000 upwards to $10M.

Is there investment funding available from MVF?   Maryland Venture Fund will continue to invest in early stage companies (tech, biotech, clean energy) from $50,000 to $500,000 as initial investments.

Maryland Venture Fund Authority (MVFA) will perform a monitoring role to ensure that  investments and reporting meet the legislative guidelines.

In summary, as a member of the MVFA, and as a resident and business owner in Maryland, I am very excited to see this InvestMaryland program being implemented:

  • This program brings great benefit for taxpayers.  It helps create the jobs and companies of tomorrow and builds an economic climate where the most promising ideas and innovations have a chance to mature.
  • This is a win-win for all constituencies within the State of Maryland. Through this initiative, we can:
    • Infuse much needed capital into our seed and early stage companies
    • Recapitalize the State’s successful Maryland Venture Fund
    • Ensure no up-front cost to taxpayers
    • Provide a tax benefit to insurance companies who bid today, who can begin claiming credits in 2015.

Thanks for reading.  I’d appreciate any Comments or feedback you may have on InvestMaryland.

Featured image courtesy of Anosmia via Creative Commons.

Big Idea CONNECTpreneur Spring Forum, March 7, Tysons Corner, VA

LORE SYSTEMS is pleased to host one of the most exciting angel and entrepreneurship networking forums in the DC Region on March 7, 2011 at the Tower Club in Tysons Corner, VA.

Please come out!  Here’s the Eventbrite link:  http://connectpreneur1.eventbrite.com

The Big Idea CONNECTpreneur Spring Forum is a 1/2 day “NETWORKING MASHUP” of the DC Region’s TOP Entrepreneurs, Business Leaders, CXOs, Angels, and VCs.

Come see what happens when you put a group of “A List” business leaders and entrepreneurs in one room for a few hours!

This UNIQUE EVENT is like NONE OTHER in our region, due to the high quality of our attendees and participants, as well as our programming and unprecedented networking.

The Big Idea CONNECTpreneur Forum is an exclusive “mashup” of 170+ of the DC Region’s top entrepreneurs, business leaders, CXOs, angels and VCs.
Most of the attendees are “INVITATION ONLY,” and we are limiting service provider participation in order to maximize the experience for our Attendees and Sponsors.
Program Highlights:
  • “Hypergrowth – Zero to $500 million in 8 years” discussion
  • “Entrepreneurs with a Higher Purpose” panel
  • 8 Emerging companies seeking funding will briefly tell their stories
  • “Disruption, Disintermediation, and Destruction” luncheon discussion
  • Networking sessions before, during, and after the event
The venue is the Tower Club in Tyson’s Corner, Northern Virginia’s premier private business club.  A plated brealkfast and plated lunch are included.
AGENDA7:00–8:00 am – ARRIVAL / BREAKFAST / NETWORKING

8:00 – 8:05 am – WELCOME

8:05 – 8:45 am –  “HYPERGROWTH – ZERO TO $500 MILLION IN 8 YEARS!” – a conversation with Tony Jimenez, Founder and CEO of MicroTech
8:45 – 9:30 am  –  “ENTREPRENEURSHIP WITH A HIGHER PURPOSE”
Jim Cheng, Secretary of Commerce, Commonwealth of VA; Founder and CEO, Computer Hi-Tech Mgt, “Entrepreneur Turned Public Servant”
Dr. John Holaday, CEO, QRx Pharma, an ex-Army officer, Professor, and serial entrepreneur who has founded and taken 3 companies public, “Entrepreneur Seeking a Cure for Cancer”
Seth Goldman, Founder and TeaEO, Honest Tea, beverage industry innovator, “Entrepreneur  leading the Green Movement”
9:30 – 9:45 am – NETWORKING BREAK
9:45 – 11:30 am – COMPANY PRESENTATIONS
Fresh Tax
Pixspan
11:30 – 11:45 am – NETWORKING BREAK
11:45 – 1:15 pm – LUNCHEON DISCUSSION – “DISRUPTION, DISINTERMEDIATION, AND DESTRUCTION”
Duke Chung, Founder of Parature, CRM industry pioneer
Mark Walsh, Founder and CEO, GeniusRocket;  Chairman, DIngman Center for Entrepreneurship;  Chairman of the Board of Trustees, Union College;  Founder and CEO, VerticalNet
John Backus, Managing Partner of New Atlantic Ventures, Founder of Draper Atlantic Venture Fund, former CEO, InteliData
1:15 pm – MORE NETWORKING AND DEALMAKING
CONFIRMED PARTICIPANTS (partial list):
Over 110 Entrepreneurs and CXOs, plus another 40+ angels and VCs including Core Capital, Novak Biddle, New Atlantic Ventures, CIT, Capital Source, NEA, Maryland Venture Fund, MAVA, MTECH Ventures, Maryland DBED, Ruxton Ventures, Opus8, VentureCross Partners, McLean Capital, National Capital, Starise Ventures, Dingman Center Angels, Blu Venture Partners, Blue Heron, Washingon DC Archangels, Fortify.vc, Endeavor DC, Private Capital Network, APPTEL, Stanford Venture Advisors, MD Center for Entrepreneurship, SunWalker Group, Skada Capital, Keiretsu Forum, CADRE.
EVENT SPONSORS:  


InvestMaryland, Winning by Fueling Innovation + Creating Jobs

The State of Maryland is creating a $70 million investment fund to deploy into venture capital funds to stimulate innovation, spur economic growth, and create jobs.

This initiative is called “InvestMaryland,” and I am proud to have been appointed by Governor Martin O’Malley as a Member of the Maryland Venture Fund Authority, which will provide guidance to and oversight of the program.

This is a groundbreaking effort by the State of Maryland, and I applaud all of the various business and political constituencies who made this happen.

The State plans to raise at least $70 million by auctioning off tax credits to insurance companies.  About 2/3 of these proceeds will be invested into private venture capital funds, and 1/3 will be given to the Maryland Venture Fund, which will in turn invest in emerging companies in industried such as information technology, clean energy, and life sciences, among others.

Maryland is not the first state to employ this idea.  Eleven other states already have programs similar to InvestMaryland.  The expected benefit from InvestMaryland, according to some, is the creation of 2000+ new jobs while supporting at least 200 businesses.

Here is the the link to Gazette.net’s article in February, 2011 which covers the announcement of the program.

I am encouraged by these kinds of initiatives and would love to see more states embrace these kinds of public-private efforts to stimulate capital formation, and help create jobs and nurture new technologies and emerging companies.

Thank you for reading.  Let me know your thoughts about the InvestMaryland program or other ways in which technologies and small businesses can be supported.  And please sign up for my Blog!

Featured image courtesy of sidewalk flying licensed via creative commons.