Today I a great busy day. My day started at 5 AM and I was very focused on thoughts about the German strategy and some of the challenges. I focused on looking forward 3,4,5 years ahead trying to figure out how that is going to play. At 11:30AM I ran into the the office and I had my Chinese class, which was great.
At two o’clock I had a meeting with my team, and I debriefed everybody on the German trip, and we also went over the details of the the client, strategy, the various pieces are involved.
The was great deal of insolvent from the team, with lots of good questions and comments. The meeting ended with the us planning out the the the next three days, which is focused on looking at our cost base to get a project launched, project schedule, and scope of work. Mina is going to be coordinating all that work. However she is tapping into the whole team to get estimates, numbers, capabilities, and any risks or issues that we may be facing.
Afterwards and I had a call with with Marcus. While in Germany we established that the project sponsors, Markus, Thomas and myself, would have a weekly 10 minute huddle to touch base and make sure that we are connected. This was our first a session of keeping the weekly meetings, touching base and down making sure that everything’s moving forward in the right direction. We are both very excited about the project, and see all the possibilities, and I think both recognize the fact that the business terms, may not be ideal yet, but that does not mean that they are the ideal situation is not available, is just that we perhaps have not yet found the best solution for us both.
At 7 PM my friend R came over, and we spend a little bit of time looking at R’s life plan. Just like a business strategy, we analyzed the situation, and mapped out (in mind mapping software) the issues ahead of R. Whenever I am helping somebody, I learn as much out of that as they do – so this was a very great, rewarding experience. We are going to follow up on Friday and do more work.
At 9:30PM in the evening I met Casper, Casper is an ex-Goldman investment banker turned entrepreneur. He worked out of UK and Hong Kong, for about seven years. He was doing a lot of the really big deals (billion-dollar deals), so in that sense he was truly an investment banker in a way that people perceive investment bankers to be.
The reason I met Casper was to get a little bit of advice in terms of valuation, to get his perspective on the German deal, and to get perspective on how to bring people on board on equity level.
The bottom line was that the way it should be evaluating this is I need to start at looking at the valuation of the company, and then doing DCF on it, and from the DCF establishing the value that the person that will be coming on is brining against the marketplace value.
So the way this would actually work quite well. For example if I was picking up somebody that was worth 300,000K US a year, and they were say working without salary for next five years or some small salary. If the business is worth X, how much of that business now, should they be getting based on their salary. Using this logic, you could then risk adjust this and then quite easily determine the right ownership level based on an individual. Further we talked about the vesting period, the milestones to vesting and performance criteria to getting vested. Performance driven.
This also applies to brining investors onboard, since based on their contribution of capital, this will also allow me to much clearly understand the percentage of ownership that would have to be given away, for the a cash investment.
And this I think is the one of my struggles. How do you convert friendship value and support into numbers. Because now you are crossing the boundary between friendship and money and crossing that boundary is never an easy thing to do, and I think Casper really give me a very very excellent perspective on how to look at that in it in the fair way.
An additional thing I thing I realized was that I actually do know quite a lot about deals – and that I just need to look at it from the same perspective as I looked at it for my other deals.
I have asked Bert also for help with with helping understand how to bring somebody on board based on equity instead of salary, because I know that in his business they had done that a lot. Actually Bert and Bob are both in UK this this week, and it very kindly offered to give me call on Wednesday and give me advice and coaching in this area.
But my day ended quite late, around 4AM – still part due to jet lag.
In al of this, I managed to plan my week holiday with Alex for Easter – we are going to Thailand to a very kid friendly resort that has princess rooms, water slides and adventure actives. Really looking forward to it.