To unlock growth in a company, you must first find the KPI that is core towards increasing company value. More effective knowledge of growth comes from a deeper understanding of the characteristics of a “perfect client,” the trends between user cohorts, and finding the tipping point that solidifies retention and engagement.Continue reading →
While growing investor enthusiasm has contributed to a historic $3 trillion of fundraising over the last five years, the PE industry faces increasing competition amongst firms, record-high multiples and other factors making it difficult to generate attractive returns. One aspect for consideration is succession planning, especially since CEO turnover at portfolio companies occurs at a rate of 73% and can increase hold times and decrease returns.
This article defines succession planning, and examines the best practices and mistakes to avoid in succession planning for PE portfolio companies. It also explores succession planning within private equity firms themselves, something PE firms have been uncharacteristically proactive about confronting recently.Continue reading →
The origins of family office investing date back, colorfully, to at least 15th century Florence, when the Medicis auspiciously gave the likes of Michelangelo and Da Vinci their start. Fast forward to present day, family offices have quietly continued to rival household VC names in the capital structures of the world’s largest tech companies (Uber, Facebook, and WeWork, for example).
Finance Expert Vidur Gupta presents a captivating introductory piece on the secretive but potent world of family office investing.Continue reading →
Technical debt, which relates to suboptimal technology infrastructure in an organization, can actually be a huge financial burden on a business. However, like traditional financial debt, there are steps and processes that can be taken to manage and mitigate the risk. In this article, we elaborate on how CFOs can tackle their technical debt burden.Continue reading →
Once crammed into stuffy showrooms with eager salespeople and a dizzying plethora of models, mattress purchases used to be notoriously complicated. However, a upstarts have recently revitalized the industry with innovations in marketing, delivery, and a direct-to-consumer model.
It’s true that the mattress industry is experiencing an upheaval, but rather than the typical narrative of newer operations completely displacing older ones, perhaps there’s room for both collaboration and innovation. There are lessons for investors, entrepreneurs, and corporate moguls alike.Continue reading →
Professional sports franchises continue to see record sale prices. But what drives a team like the Dallas Cowboys, who haven’t won a Super Bowl in over 20 years, to top the list of the most valuable sports franchises in the United States?
In this article, Toptal Finance Expert David Turney provides an overview of professional sports economics, unique valuation considerations, and a team valuation example.Continue reading →
In an era of subdued prices and with usage expected to plateau within the next 30 years, the focus for oil and gas companies must turn to cost control. Applying technological innovations such as blockchains, wearables, and advanced analytics to the supply chain can keep costs in check and maintain profitability.Continue reading →
Latin America boasts great investment opportunities with attractive risk levels, higher returns than home markets, and access to a large population base with growing income. However, Latin American acquisitions require special attention and include a number of difficulties unique to the region.
This article provides insights gleaned from Finance Expert Emilio Labrador’s 15 years of experience in Latin American oil and gas M&A. It provides practical tips for foreign acquirers considering investments in Latin America, on topics ranging from risk premiums in valuation, accounting due diligence, and legal considerations.Continue reading →
In December 2017, Congress’ tax reform bill, amongst many sweeping changes, reduced the marginal tax rate to 21% from 35% for corporations, and limited their use of interest expense as a tax shield.
This article explores the implications of these changes for traditional methods of valuation, including the discounted cash flow (DCF) method and the EBITDA multiple method for the corporate manager and finance professional.Continue reading →
Traditionally confined to the realms of insurance and pensions, actuaries are now branching out into the wider business world.
The long-termist and statistical approach of actuarial science makes it an invaluable tool for recurring income businesses. This article looks at how, showing examples of usage within customer lifetime value and human resources.Continue reading →
Grocery delivery startup Instacart has recently been valued at $4.2 billion. In this article, Finance Expert Patrick Gaffney works backwards and uses some basic assumptions to determine if the valuation is reasonable.
With companies opting to stay private for longer, analyzing private companies in this way can help us better understand industries typically shrouded in secrecy and provide clarity on the efficacy of certain business models.Continue reading →
The discipline of mergers and acquisitions is a complex and labyrinthine one, peppered with its share of false starts, thrilling chases, and heartbreaking shortfalls.
Toptal Finance Expert, Javier Enrile, explores the use and structuring of earnouts as one of the most effective tools for the M&A practitioner seeking to break negotiation deadlocks and mitigate risk.Continue reading →
Attention on the financial aspects of startups tends to focus on the external measure of fundraising. Yet before this, there are many aspects for an entrepreneur to consider regarding setting their business up for financial success.
In this article, we address eight vital considerations to take around the equity, budget, and valuation components of a startup.Continue reading →
Advisory boards are undoubtedly controversial. While many articles sing their praises, others condemn them as mere headshots in pitch decks. The truth is that advisory boards are usually not silver bullets. Still, they can be powerful tools and yield strong ROI—if executed properly.
This article includes an overview of advisory boards, their economics, when they can and should be used, and a step-by-step guide to building one.Continue reading →
In 2006, Ford Motor Company’s losses came in at a staggering $12.7 billion; but four years later, profits had rebounded to $6.6 billion. At around the same time, Carlos Brito’s “one firm, one culture” optimization policy delivered $2.3 billion in synergies, exceeding pre-merger projections for Anheuser-Busch’s combination with InBev by 50%.
Both Ford and AB InBev’s CEOs achieved these results by adeptly applying the principles of organizational optimization—concepts explored by Toptal Finance Restructuring Expert, Christopher Hearing, in this article.Continue reading →
2017 saw a number of issues arise in the VC industry and it may be approaching a watershed regarding its relevance.
This article looks into the root causes of the industry’s problems and why they have come to light. VCs can go through a pivot of their own to retain a seat at the table, with big data, exotic funds and platforms offering a path forward.Continue reading →
This year, Spotify will move its headquarters from Manhattan’s Chelsea neighborhood downtown to the Financial District. Beyond its physical presence, Spotify will also make its mark at NYSE when it goes public via direct listing, an unusual choice. What is expected to be the largest tech public debut of 2018 has set Wall Street and the music industry abuzz, with everyone eager to see how this unconventional approach will play out.
This article covers everything you need to know: a brief overview of the typical IPO process, how the direct listing will function, why Spotify chose to buck tradition, potential motivations behind the decision, and its potential implications.Continue reading →
Price elasticity theory was once the haunt of classical economists, with loose applications in the real world. Today, companies such as Uber, with its sheer volume of data and surge algorithms, are able to continuously triangulate price elasticities in real time to manipulate demand, moment-to-moment.
This article introduces the fundamentals of price elasticity of demand theory before taking us back into the real world, where theory will meet both big data and consumer psychology to create new possibilities.Continue reading →
Did you know that, in 2016, $60 billion was invested in art, which was comparable to the exit proceeds from venture capital investing?
This article sheds light on the opaque world of art investments and whether it’s a realistic choice for inclusion in portfolios. The article covers types of art as well as how investments are valued and return performance relative to other assets.Continue reading →
So, you’ve decided to get exposure to cryptocurrencies. In this newer space, a personal financial advisor may not be of great help. Neither will your banker, unless you are a customer of a limited number of progressive Swiss private banks, which facilitate crypto trading. What now?
This article provides practical information and resources around passive vs. active cryptocurrency investing, how to buy, sell, store, and monitor cryptocurrencies, as well as tax regulations in the space.Continue reading →
Millions of Americans depend on continuing care retirement communities (CCRCs) for care as they age. In addition to living accommodations and medical services, these facilities also offer complex embedded insurance products that are improperly underwritten and insufficiently regulated.
As a result, many CCRCs are actuarially insolvent, creating a systemic risk that could leave many ageing residents financially and medically exposed at the end of their lives. Finance Expert, Jack Barker, takes us through these sector challenges and shares a proprietary capitalization model that could potentially help alleviate the issues.Continue reading →