On this week's Industrial Talk we're talking to Brentan Alexander, President of New Energy Risk about “Project Finance as a deployment tool for companies in the new energy space”.  Get the answers to your “Project Finance” questions along with Brentan's unique insight on the “How” on this Industrial Talk interview!

Finally, get your exclusive free access to the Industrial Academy and a series on “Why You Need To Podcast” for Greater Success in 2022. All links designed for keeping you current in this rapidly changing Industrial Market. Learn! Grow! Enjoy!

BRENTAN ALEXANDER'S CONTACT INFORMATION:

Personal LinkedIn: https://www.linkedin.com/in/brentan/

Company LinkedIn: https://www.linkedin.com/company/new-energy-risk/

Company Website: https://newenergyrisk.com/

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PODCAST TRANSCRIPT:

00:04

Welcome to the industrial talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots, and let's go.

00:22

Hello, and welcome to industrial talk. The number one industrial real related podcast in the universe said features industry heroes all around the world because you are bold, you're brave, you dare greatly you innovate. You're solving problems. You're making my life better. Yeah, you are. You're making communities better. Yes. And you're changing the world each and every day. Thank you very much for what you do. All right. We're going to be talking about on this podcast, project finance, you need money, you know the fulfill that dreams however, you're going to finance it you need. You need individuals like Brenton Alexander, new energy risk is the president of that organization. And we're going to be talking about project financing, but not the way you might think. So let's get cracking. All right. We're also brought to you by AI dash, AI dash. What's great about AI dash O, let me tell you what's great about AI dash. I'm a utility guy, former utility guy transmission lineman, right. And one of the biggest challenges we always had each day, and I'm not getting each day is vegetation management. Here's a solution. And then combined satellites with AI technology to be able to manage that vegetation from a utility perspective, looking from above, looking down, and then deploying that capital in a way that is meaningful to your service territory, and the quality of power that we just take for granted. That's AI dash go out to Ai dash.com Find out more great company, great people, the other sponsor is Armis. Now, that for me, we talk a lot about digital transformation, that whole connecting of your assets. And every time you connect, you know, that's great, we're pulling data, we're trying to make tactical decisions from those devices, you need to know that they exist out there and that they are secure. Armus has the platform to do that. And quite honestly makes it pretty painless. So go out to armas.com Find out more. All right, a couple of things. Again, if you know me, I'm pretty impatient. I want information fast, I want to see it in in bullets, I don't want to read about it, which is sort of bad about it about me. But however i i want to see it in bullets I want I want solutions delivered in little chunks, right. And there's a lot going on in industry, a lot happening, a lot of innovation, a lot of leadership stuff going on a lot of events, talking about new new things. And there's a there's a velocity that exists out there that you need to keep, you know, keep track of you need to be a part of it. And so in an industrial talk, we have that platform, we are dedicated to education, industrial education, featuring companies featuring leaders that are truly pushing the envelope with innovative thinking, that's one educate, you got to educate, you got to collaborate, because I know for me, I don't have all the answers. You don't have all the answers, but you need to collaborate with trusted people. So industrial talk once again, as a platform that says hey, these guys, or this person, this company knows what they're doing. It's sort of a vetting process, for lack of a better term, but you need trusted collaborators in your journey going forward to create that business of true resilience and success. And then finally, you need to innovate. And that's the world we live in. Everybody's talking about it everybody is trying to deploy some sort of level of innovation to deal with, let's say workforce management, whatever, whatever it might be. You name it, the you know, they're looking for solutions to be able to stay in business and survive and definitely prosper in the future. So there's an innovation component. So with that said,

04:20

podcasts are great. Podcasts are great, because we can sit there and banter back and forth. It's a it's sort of a no frills, you know, no, no formal, but we can't do certain things in podcasts. I can't just sort of share, share a presentation and say, What do you mean by that? What is that? So that just begs the question for, I hate to say it, but webinars and there's a value with webinars, but I'm going to sort of take it a little step differently here on industrial talk, micro webinars, small because I am impatient, my attention spans not the best and I just want the unfiltered truth to solving problems, right? And, and so we're going down the road of creating these on demand micro webinars. They're small hour, maybe a little more than an hour. But what we can do is we can definitely provide whatever the paper, whatever that document whatever the presentation and be able to do it a little bit more in depth, it gets a little bit more deeper than what we can do on the podcast, what we do on the podcast, is we elevate the attention, then we bring it down into a little bit more nuts and bolts with these micro webinars, we're going to be starting one with utility maintenance, that's something I'm very passionate about, I see the need for utilities, because again, just think about it, we take it for granted that the power is going to be there, we just do. And until the power is not there, then we realize how important the power is. So utilities are constantly looking at ways of being able to manage their asset base in a way that delivers the solutions and services to the end user. And that's us. So that's an interesting, and they're going through a lot of changes to the other one is of course, manufacturing and that, that that's a big broad category, but we're, we're venturing into that. And again, it's that connected, you're looking at RMS, you're connecting your assets, you're looking at it, you're seeing what's going on, how do you make that, that manufacturer more efficient, we're doing oil and gas, we're gonna be doing logistics supply chain, because that's the topic that is on everybody's mind. So there's a lot of things that are coming out. But the thing for me, for me is that it's there going to be created for on demand, you go out to industrial talk, find the find the webinar, micro webinar, and then be able to download the documents to help you be better, right. But it's on demand, if you're, it's eight o'clock at night, and you feel like you need to learn a little bit more about utility maintenance, ready to go. So that's, it's, it's the Netflix approach to industrial education, right? Just go there, download, do what you need to do watch it. And fast forward if you want to. But the reality is, is that we want to put more information in your hands so that you can succeed because the reality is, again, you need to succeed, you need to prosper, we need to specially now more than ever need to be in that whole education, you know, collaboration, and definitely innovation mindset. You can join, join industrial talk, that's a great ecosystem for people who truly want to make that happen. Now about education. So I'm looking at this and this is an interesting, you know, we talk about connected assets and being able to pull I got an article out there by Trend Micro in depth look at I CS vulnerabilities, this is part one of three, and ICS, if you don't know is industrial control systems, and, and whether whether we like it or not, we have to have that conversation wrapped around cybersecurity, how do we protect, right? How do we prevent, you know, attacks, because once again, you need to be successful, we need to make sure that you're you're not vulnerable. So there's an article out there go out to industrial talk, it's going to be a featured article out there. And I think that it's got a grass, get good pictures. They do a good job. And they know what exactly what they're talking about. All right on to the interview.

08:31

Here is something his name is Brenton Alexander, right. And if anybody's ever been through project financing, the traditional project financing, there's a lot of justification to stacks and stacks and stacks of paper. But that's the way we normally have to finance we don't have the balance sheet to be able to say on out EMI, let's go down here. So many fall into that category that they've got. Definitely a project finance where they're going. This is an important conversation. That if you are looking for capital, I just he's, you know, new energy risk is is they're just an open book. And they've got some real creative ways of being able to help you succeed at what you're trying to do have that conversation all the contact information will be out there. And it was a great conversation, so enjoy it. Brenton Welcome to industrial talk. Thank you very much for finding time in your busy schedule to talk to the best listeners in the universe. How are you doing?

09:31

I'm doing well. Oh gee, Scott.

09:33

Well, I can't complain because you're talking about a topic listeners that you might think is not sexy, but boy do I think it's sexy. And it's it's funny. How do we take this incredible innovation, the energy out there in this energy transition, right energy transition space, and be able to mitigate, manage, and financially bring a lot of this innovation to the mark Get. And that's what Brenton with new energy risk brings to the table. All right. Let's get a crack. And for the listeners, let's, let's sort of lay the foundation on who Brenton is, give us a little 411. on who you are.

10:15

Yeah, sure. So Brian Alexander president, your energy risk, technical background. So mechanical engineer by training went through, you know, multiple degrees can decide what to do with my life. So stayed and did a PhD. In electrochemistry, thermo chemistry and got really into the energy transition space, went out into the world, tried a number of startups and quickly realized, you know, good tech is necessary, but insufficient piece to actually get infrastructure built in this world stealing to the ground. So, you know, you mentioned not very sexy topics, I ended up ending up in insurance, which is a good topic to kill a conversation at a dinner party. So you

10:56

don't say insurance. Right.

10:59

But, you know, our goal here is to utilize insurance Capital to help solve all these risks that exists in new energy projects and enable them to get to market faster by accessing low cost of capital financing that they otherwise we'd be unable to access due to, you know, tech risk on the project or contractual risks from some of the counterparties that lending institutions are just unable to take. So we're really trying to use a capital efficient insurance capital to enable these projects to move forward in a way they'd be unable to do otherwise.

11:31

Because yeah, you're absolutely right. I mean, a part of my history has been to try to finance projects, and it is it's, it all gets down to the capital that you can deploy to be able to bring that that solution that innovation to the market. And then that requires a team that requires a team of financial people who are in your corner to be able to do what is necessary to make that happen. So it's interesting, given your background, and how you sort of ventured into Hi, I want to do that you just sort of saw the need out there and say, I got this innovation, we got to wrap it some way, shape or form.

12:16

Yeah, that's right. So that, you know, the company was founded by a combination of insurance folks and tech folks. And the idea was, you know, these projects are being held up at the finish line, because, you know, new tech developers in the energy space feel like you wrap your project in green credentials, you know, it's energy transition, it's ESG. It's good for the environment. You go to the lender, the lender has an ESG mandate, they want to do these projects. And then you run into the credit committee, and they say, Well, so what you don't have a bankable technology, you know, bankable offtake, you don't have a bankable feedstock agreement. We can't put money behind that. And then you stop. So our view was, Well, is there a way we can use insurance capital here to actually solve this problem, take these risks off the table and let the lender move in and make the project go. And that was the genesis for the company, the genesis for our founding. And that's what we've been doing for about 10 years now.

13:06

So take us through an example. Let's say, I know you rattled off feedstock offtake, you've there might be technology risks that is unique. How do you take that risk? off the table? Wrap it, and everybody makes money, right? I'm a bank, or I'm a bank, and I say, oh, all the risk is over here in that area. How do you how do you sort of approach it that way? I don't see how you make money. Because that's, you're, you're accepting the biggest risk of everything. I mean, that's what it is.

13:41

Yeah, I suppose. But I mean, it's, it's, it's, you know, it's like any other insurance you buy, you're gonna have a few failures, but you've you've spread that risk across everybody paying premium, and then you socialize the risk. And so instead of nobody getting done, you get everybody done, and how, you know, some people are going to fail. But you're all socializing the cost of those failures across all those projects, and everything moves forward.

14:03

See, and I do like that. And so if I'm a new tech, so what would be the first step if I came to you knocked on your door? And I said, Yep, I've got this green transition manager gamma, and I want to I want to get financing, find out, how do we go? Will you take us through that scenario,

14:23

or so so we want to talk to everybody in anybody at every stage of development. And so people come in our door, some people, it's, you know, they have an idea and it's, it's, it's one person in a garage, and other folks are, you know, established companies with 100 employees, and they're what they think is weeks away from a financial close, we get everybody in between. And you know, we will come in, we'll take a look at at your proposed structure or your proposed economics, the technology, and, you know, we'll give feedback on areas we think we can support and help and areas we obviously can't, and we'll give guidance on what you think what we think you need to do to kind of get to the finish line. So, you know, for our projects, it's not uncommon for us to have from first contact financial close to three, four years. Because these, these projects are long to just stay, there's a lot of pieces that have to come together. And as you're putting the pieces together the facts on the ground change, so you got to get them back together. And, you know, the shape of the world is moving as you're trying to get it all back work and, and, you know, if the stars of Saturn and everything else align, and, you know, it's the third, third Thursday, or whatever special month, it all comes together and you reach financial close. And

15:31

and it's so funny, because you bring up a good point, and we were having this conversation offline. And that is, it's like a house of cards, and you just had to keep nurturing it, you gotta keep sort of making sure that, you know, this side is a little weak, I know, you nurture. And you're just your, your journey is all about that project. Do you find that your Do you provide some like consulting, relationship type stuff and saying, hey, you need to do sort of think this way, let's, let's help NERT. Let's, let's frame it this way, whatever, to help with the banking component to it.

16:06

Yeah, so I mean, we're not a consulting shop, where we're paid at the end of the day when deals closed. So we're motivated to get deals closed, because that's how we how we pay the bills. And so as much as we can help clients, we work with advance, give them feedback on what we've seen from others in the marketplace that, you know, they may or may not be doing well, to give them sort of a sense of where they need to head, you know, introductions we may be able to make with capital providers, or EPCs, or others we've worked with in the past to sort of help them move down the chain, we'll do that because it's valuable to us, both from a, you know, ESG standpoint, we're all here because we want to drive the energy transition. So we want to see the projects get built just to impact the world. And we all want to, you know, get our bills paid to. So we want to see the projects close. So we get we get the cash in the door to keep the lights on. So, you know, we don't consult directly as a consulting agency. Instead, we provide feedback and help for projects and promise to help them move to the finish line.

17:02

But again, if no projects too big or small for you guys to actually have a conversation.

17:09

That's right. Sorry to hear it's a small projects, generally, it's small, you know, the first small project leads to 10 small projects, these don't 100 small projects, like they everything grows and scales together. And we want to help folks down that scaling journey.

17:25

I'm having a hard time finding a real issue with any of this because I living through that hole, how do I capitalize a project and then having the conversations with the bank and then addressing their concerns? And then it would seem to me like this would be a good relationship to have. And and the reality is, these projects don't come, you know, without risk. They don't come with massive balance sheets, they don't come with the traditional stuff that banks like to lend against.

18:01

Yeah, that's right. And I mean, I don't want to make ourselves out to be a magic bullet that solves all the problems. You know, at the end of the day, we'll protect a debt lender coming into projects, we generally won't protect a layer of the equity, because we want to make sure there's alignment that someone has skin in the game. So it's not a heads, they win tails, we lose type scenarios. So it's still hard even with insurance, you got to find, you got to find equity dollars that are willing to take the risks, you got to find all the various contractual parties who will put the structures in place that need to be put in place, it's still hard. But you know, our goal is to make it a little bit easier to help, you know, a couple more projects get over that finish line more than

18:39

the what what goes into my mind start ticking tick, tick, tick, tick, is like you have to create these models. These are new things, right? You've got the traditional lending institutions over here, they look at this and everything sort of procedure alized, right, then you start talking about very unique vision and view of whatever that risk might be project by project by, you might be able to say, Oh, I've used that over here. Let's just pray. You might be able to but these are. I can only imagine the modeling.

19:18

Yeah, well, you know, that's that's part of the magic here is we have scientists, engineers on staff to do a lot of that technical underwriting. We have former investment bankers who are on our bizdev staff so they can understand the way these projects come together. We have actuaries on staff who take all that knowledge and put it through their magic machine and it gives out an answer that looks like something the insurance industry is used to seeing. And that enables the insurance capital to stand behind these things. So it's really taking all that all those pieces and putting them together in a way that insurance capital understands. And then structuring that into a definitive insurance document that the lending finance community can understand and feel like their risk is mitigated. Yeah,

20:00

and then it has to happen, I can appreciate it. Because many of these projects that you address you talk about, they need that service, they need that solution to be able to come to market. And and if we're really interested in the this transition to other forms of energy, it has to be that collaborative approach that financial approach, because it's it's just heavy lifting. It is just without a doubt, it's heavy lifting. Yeah,

20:31

I mean, if you're going to succeed in this space, you need to find capital that's going to come in at single digit cost to capital infrastructure funds, traditional capital sources, and they're used to doing, you know, gas peaker plants, or bridges, or roads, or airports, and you give them anything that stuff that that looks weird, they're going to ask for the three reference facilities that have at least three years of operation under them. So you have a total chicken and egg problem. How do you how do you get that done? Yeah, yeah, you're gonna, you're gonna avoid those guys, and just do all equity. You could be paying 15 20% cost of capital, it's super expensive. So how do you? How do you bridge the middle there? That's really the goal.

21:08

Well said well said. Okay, so that's all good. You've sold me on the solution here. What are the roadblocks? What do you have? What problems exist out there? Outside of the obvious what? Me as a small business owner, what, what what risks? I mean, I don't want to do it, you know, go to market, whatever. What is that? Yeah, I

21:29

mean, honestly, there's a few areas that that that, that our clients run into problems. And the first is I don't want to blame our clients, because you have to be of a certain mindset to do project development, you have to be an optimist, you have to see the glass half full all the time. And that's just not the way the lending community looks at the world, right, they're looking at the risks and what their downside is, and they will look for the weakest link in the project,

21:52

quite frankly, I don't like going to have a beer with them, because they are a downer.

21:56

That's right. And so you know, you have eight, eight amazing attributes of your project. And the ninth is kind of weak, and that's the one they're going to focus on and base. And, you know, that kills our developers, but a lot of folks coming through, they really, you know, I don't want to say believe their own hype too much. But you have to be able to think like a banker and pick your own project apart. And if you're unable to do that, you're gonna, you're gonna come to market with something that's not ready for primetime. So we see a lot of folks who don't want to say cut corners, but they have pieces of their projects that look really great, you know, they have a product that's highly valuable in a specialty market. And they're looking at that and say, Wow, that gives me a competitive edge. And then they feel like other parts of the project, they can probably let be a little bit worse, because they have this one piece. That's so great. And the truth of the situation is, it doesn't work that way. Every single attribute has to be bankable, you can't have one great attribute offset another, they all have to be good. So that's a key piece as we see people just miss that, that that area of of but

22:57

that, but you brought up the sort of the personal characteristics of a project developers, I'm optimistic, I don't want to go to that bad negative stuff that that room makes me feel uncomfortable. I walked over here, this is cool stuff.

23:09

Right? Totally. Yeah, you got to tell the story. Absolutely. But you got to you got to know what your own dirt is, too. And then, you know, another key area we see problems is and this was, this was me coming out of grad school is a belief that the good tech, the good, innovative, new, you know widget that's going to change the world is enough to get it done. If you build it they will come and the answer. The answer is no. You know, good technology, new technology, novel technology, even while proven is it's necessary, but insufficient to get your project done. There's a lot of other pieces that have to come in place, getting those pieces in place takes time. And that takes money. You know, project development can be if you're lucky, two years, could be three years could be four years, could be millions of dollars spent in terms of consultants, and permit applications and engineering work. And that's all to get to a point where you can then get a project funded with equity and debt. And we see a lot of people, insufficiently capitalized their startup or their project development shop. And they don't have the funds necessary to do everything they need to do to get the project project ready for an fit for a final investment decision. So we see a lot of people come to us because they see insurance as sort of a magic bullet to skip the step of project development, and try to do all that stuff later. And it just doesn't work. You got to do your basic engineering, you got to do you know, site control, you got to get your permitting done. You gotta negotiate the contracts, all that stuff costs money, it takes time. And if you don't do it, you're not gonna have a project that's gonna be investment, investment,

24:39

right? And if that doesn't, if that's not salt on the wound, when you invested all this time, energy, effort, passion, money, whatever it is, and you get it to that point, and it's not bankable. That's a real buttkicker. Big time. To say the least. Yeah, well put it I gotta tell you, kudos to the people who want to live in that world. And I mean, that's, that's a heck, that's a heck of a calling.

25:07

It's a tough world. I mean, it's a binary risk world, it's high risk, high reward. And, you know, there's no, there's no half built project, you're either get it you don't.

25:16

So what I get out of all this is that you need to find a team of trusted individuals to help you in this journey, whether you like it or not. And that includes companies like New Energy risk, and others to be able to have that conversation sooner than later. But again, you have no issues with approaching companies wherever they are in that whole process. But I just see the necessity to be able to bring on people that you trust to help you in this journey. And if the journey is not going to happen, know that sooner than later, right. You know, okay, I'm only out a million dollars as opposed to oh, my gosh, it's far greater than that. So

25:59

short of loading correctly and in abandon the abandon the ways that aren't going to work before you put too much money. Yeah,

26:05

yeah. And have people that are not afraid of, you know, giving you or telling you the real story. All right. So listeners out there saying, Oh, my gosh, I want to know more. How do I get a hold of you?

26:20

Yeah, well, the easiest way is to you know, you can find us on our website, your energy risk.com our email addresses contact at New Energy risk.com That sounds like it's one of those black hole email addresses. But

26:31

in fact, I was getting ready to say, Oh, come on. Yeah.

26:37

Go straight to our had a biz demonstrate to me as well. And we follow up on those within a couple of days. You know, it's it's reach out, we we get multiple, multiple inbounds a day, we work with a number of folks, and we're happy to pick up the phone or answer the email and get moving.

26:56

One last question. How do you really want if somebody uses that contact email? And you do the follow up and say, yes, no, maybe let's have a conversation, that type of thing on all of those

27:11

will always have a conversation. Absolutely good. Always have a conversation. If there's a there there, we'll get an NDA in place. And then we'll, we'll go from there.

27:20

Yeah, like that. Seems painless. Well, relative pain is relative. Let's just sort of make sure that everybody understands that. Well, I enjoyed this conversation, we could go on forever. But I think that listeners you need to reach out to Team New Energy risk. I think if you're in the world, this has always been I've lived through project financing. And and at a at a minimum, it took up a room of paperwork. That stick and project financing.

27:55

Yeah, it's it's that is a gauntlet gauntlet, maybe we'll do live to see the you know, the light at the end of that tunnel. So so

28:03

if you do come across those people tag them, because they're rare. They are very rare. All right. Brenton. Thank you very much. All right, listeners. We're going to wrap it up on the other side. If you're not we're going to have all that contact information that Brenton provided, everything that you need to reach out to this. This incredible company I really enjoy. Thank you, Brian, for being on the podcast.

28:27

Scott. Appreciate the time. Appreciate the opportunity.

28:29

All right, listeners. Stay tuned, we will be right back.

28:33

You're listening to the industrial talk Podcast Network.

28:42

All right, a hearty thank you to Brenton Alexander sharing his insights into project financing. You need money. You need money, you need to reach out to Brent and all the contact information for Brenton will be at industrial talk, find his interview, find his conversation, boom. There's his contact information. All right, we're creating an ecosystem here at industrial talk. It is featuring companies and individuals that are trusted in their specific profession. You need that innovation, right? So we need to educate, we need to collaborate, we need to innovate and you need to do that with trusted individuals. If you want to contribute. Go to industrial talk, send me a quick little buzz saying hey, we want to contribute we've already got people that are committed to leadership committed to manufacturing committed to the IoT committed to asset reliability, everything in between. And we're just expanding because we need to solve problems that we need to do it with trusted individuals. All right. People will be brave dare greatly hanging out with Brenton you're gonna change the world. That's for doggone Sure. All right, we're gonna have another great conversation shortly. So do not go away. We'll be right back.

The post Brentan Alexander with New Energy Risk appeared first on Industrial Talk.

On this week's Industrial Talk we're talking to Paul Holland, Managing Director, Corporate Investing Practice with Mach 49 about “The Speed, Velocity and Scaling Innovation”.  Get the answers to your “Venture Capital” questions along with Paul's unique insight on the “How” on this Industrial Talk interview!

Finally, get your exclusive free access to the Industrial Academy and a series on “Why You Need To Podcast” for Greater Success in 2022. All links designed for keeping you current in this rapidly changing Industrial Market. Learn! Grow! Enjoy!

PAUL HOLLAND'S CONTACT INFORMATION:

Personal LinkedIn: https://www.linkedin.com/in/paul-holland-15359469/

Company LinkedIn: https://www.linkedin.com/company/mach49/

Company Website: https://www.mach49.com/

PODCAST VIDEO:

THE STRATEGIC REASON “WHY YOU NEED TO PODCAST”:

OTHER GREAT INDUSTRIAL RESOURCES:

NEOM:  https://www.neom.com/en-us

Hitachi Vantara: https://www.hitachivantara.com/en-us/home.html

Industrial Marketing Solutions:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

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PODCAST TRANSCRIPT:

SUMMARY KEYWORDS

people, entrepreneur, business, funded, mach, company, market, industry, called, happen, venture, conversation, technology, world, paul, point, NEOM, big, reed hastings, talk

00:03

Welcome to the industrial talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hard hat, grab your work boots,

00:21

and let's go. As always, welcome to industrial talk, the number one industry related podcast in the universe that celebrates you. It is a platform that celebrates industrial heroes such as yourself, because you're bold, you're brave, you're daring greatly. you innovate, you're solve problems. You're making my life and you're making the world a better place to live. Thank you very much. You are an industrial elite athlete. Alright, in the hot seat, we've got a great conversation. I mean, a great conversation. I was really geeking out on this one. His name is Paul Holland, Managing Director, the firm is Mach 49. We're going to be talking about just BC, venture capital and all things in between. So let's get cracking with this conversation. All right. Yeah, I like this. I'm a finance guy, not to his level, heck no. We were talking a lot of I mean, I'm always fascinated by constraints, and constraints that exist within this sort of that financial side of a business. You have this desire, maybe you have this great innovation. Yep. Great innovation. But how do you scale it? What do you do? Who do you connect with? Who do you trust? Those are all incredible questions that you have to ask if you're in that, if you're if you're an entrepreneur, I'm always struggling with that I'm always looking for answers. And And again, there are a lot of people out there. But you really have to do your homework to find out the ones that you want to really work with that can really not only bring solutions to the table for your company, but also just that wise counsel that is needed for every doggone business. Alright. So I was very fortunate to be able to meet Paul at a wonderful event that they sponsored for NEOM. Now I'm going to, again, encourage you, encourage you in a big way to go out to neil.com they're doing they're putting their mouth to practice, they are creating the community of the future. They are living a bold, brave and Daring Greatly vision for what they are doing. It's it's exciting. That's Neil calm, and Paul Mach 49. And Team Mach 49. Definitely are all involved helping to achieve what they are doing out at Neil, big, big time. It's exciting. And I think I mentioned it in in our conversation, that it's it's sort of James Bond ish, but it's it's a it's a phenomenal and it's it's taken all the stuff that we talk on here at industrial talk to the industry for Dido that's sort of like the upper level, but it's it's it's smart cities, it's 5g, it's it's cloud, it's it's quantum computing, it's everything in between, and then some right, it is truly a brave vision. It is it's very exciting. Got to neoma.com. All right onto the interview. Now, there were a couple of things that popped out of my head. When I was talking to Paul, I like the three things that they look at one market, yeah, you have to look at the market, they look at the market, you need to look at that market. Does the market really sort of support what you are doing? Is it there? That's important, right? It's important, the tech the business model, right? Is it in line? Does it work in that particular market? Does the tech even really, you know, satisfy a problem that exists in the market? Does it make it easier for them to get whatever they need to get? Does it whatever that problem might be? Does it solve it? And then of course, the the area that is really dynamic, of course, are the people so we have the market tech business model, as well as people, they look at every business in that type of light. And I think that you too have to because if you're running a business, you're an entrepreneur, you gotta check the market, find some, what is it, you know, get the right counsel for that. Your tech, does it satisfy? Are you talking about the market? Or are you listening to the market and that consumer? And then finally, do you have the right people in place? Yep. It's it's, it seems like a simple equation, but quite frankly, companies struggle with that all the time. All right. Paul, Holland Mach 49 is in the hot seat. Enjoy the conversation. Paul, welcome to industrial talk. Thank you very much for finding time in your busy schedule. Love the backdrop. Excellent. You just made me. I mean, I'm ashamed. I'm ashamed. How're you doing today?

05:09

I'm doing great. I'm doing great. I'm speaking to you from the technically speaking the greenest house in America. So that's why you see the backdrop as it is. It's their lead point house.

05:21

And I'm living proof. And I have to back, you know, back up on that one because it was an excellent event. But more than just don't don't take this any wrong way here, Paul. But I surely walked around your nice place. totaled around, no doubt about it. All right. For the listeners out there. Let's get cracking on who you are. Paul, just give us a little background for one, one.

05:45

There you go. So grew up, back in back east Southern Virginia, followed a girl out here to California 37 years ago, married her 32 years ago, and I spent my operating career helping to start two software companies. One of those was a company called pure software with Reed Hastings and a bunch of folks who got famous later doing some really cool stuff at Netflix and others. And we took pure software public was acquired by IBM for about $2 billion. And I then went back to the venture capitalists who funded pure that was Andy Rackleff. By then he started a new firm called Benchmark Capital. And he asked me to go to a new investment. They're called conic communications with Mark Gagne. And Michael Horvath guys better known today as Strava. I joined Kana, after the series B by benchmark, which was done at about a $13 million valuation. 27 months later, we hit 9 billion. I was number 10.

06:44

Whoa, whoa, whoa, whoa, don't gloss over that. What did you just say? You said 13. To watch?

06:50

Yeah, well, it was also 1997 to 1999. And so that that helped a lot. But yeah, I got brought in to run the global go to market. So built out a team and we we took sales from $10,000 to 132 million in four years. And so it was a ride. It was ag of a ride. And then, as Connor ran its course I got recruited over to foundation capital. We've spent the last 20 years their general partner over for 18 of those years in six different funds. Foundations very good firm. We've invested about 4 billion of investor capital, it's currently worth about 600 billion today. Netflix is half of that, but 30 Other IPOs including some of my companies like mobile, iron and shag and, and many others, and then join mk 49. It's actually starting to help Mark 49 when it was founded about eight years ago, and then I joined full time two years ago.

07:44

Okay, so Mach 49. What does that mean?

07:48

Yes, so Mach 49 is founded by Linda Gates is a phenomenological entrepreneur. She grew up here in the valley with all the folks who started the venture business. She ended up in strategy consulting ended up at 32 years old co founder and CEO of a company called stratigos with Gary Hamel and CK Prahalad later went on the board of Sybase took it from $3 to $65. And then about eight years ago, decided that the global 1000 needed their own kind of equivalent of Y Combinator. So Mach 49 Mach 37 is the speed to exit the Earth's atmosphere. And really we use a lot of metaphors around you know, kind of escaping the gravity, gravitational pole, the mothership and exploring new lands and things like that. And, but that was taken, so she went with 49, because it's the it's the number to escape the gravitational pull of the sun, but also a bigger number than 37 and also evokes memories of coming to California to mined for gold in 1849. She's a fourth generation, California entrepreneur. And so this was a important kind of thing for her and probably worth noting. She's the girl that I followed out here 37 years ago. That's the that's kind of squirt.

09:06

Well done. Well done. Thank you. So here's the deal. Industry for Dotto within just that whole topic, industry, for Dotto, it encapsulates innovation technology. How does it how do we do that? It's edge. It's it's cloud. It's, it's, you know, digital twin, it's all of this stuff that's just popping around one of the areas that I think needs to be explored a little bit more is what is the process of that you start, you know, going down that road, somebody has this great idea. How do we begin that VC conversation that process?

09:45

Well, meaningful perspective of a an entrepreneur? Start?

09:50

Yeah, yeah, because there's a ton out there. If I had a nickel for every time I spoke to somebody saying that I'm a I'm an AI expert, you know,

10:00

then sure, yeah, it'd

10:01

be pretty rich.

10:02

Unfortunately, there are more and more than now, but yeah, for entrepreneurs, it's, you know, the the first kind of, I mean, for me, I worked at, at two really successful startups, but both of them had been bootstrapped by their founders. And so that's, uh, to me, that's kind of I'm sort of old school, I, I feel like that's kind of the way to get started. These days, it's, you know, we often see folks that will go and do a business plan competition, and they'll, you know, they'll get, they'll get a nice placement and that, and then they'll turn around a week later and go out and raise money. And, you know, and that that works. Also, I mean, there are some businesses now particularly in places like crypto that need to scale so quickly that they that they'll, you know, they'll they'll raise money within a month of actually formulating the idea. But for me, particularly in enterprise companies, and in consumer companies, I always viewed it as I saw a lot of value in people bootstrapping, and putting some of their own capital work and their own time and so forth at work. But at that point, then if you've got a strong enough idea, then you've got many different ways to approach the venture community, whether it be through, you know, things like venture competitions, or through, you know, just kind of getting oriented around people that are doing seed investing, you know, often the best way to get involved with a good venture firm is to have a good seed investor who's got relationships in that firm. So these are, you know, these are just some of the things that folks will get started on. And as you as you get started on your entrepreneurial career, you'll gradually get oriented toward learning more and more about sort of the funding mechanisms and, and you'll get to know folks that are in the in the venture industry, but, you know, work, work on the idea and creating something amazing and the money will follow. See,

11:55

the concern that I have, and I've heard is that there's this there's, there's velocity, we've talked about my 49, there's this velocity, and somebody might have a great idea. And I hear you're talking about bootstrapping. That's fine. That's good. But bootstrap means time. And in this world, there just seems to be this blistering velocity that exists within and you're gonna miss the boat. If, if, if I'm an AI guy, and I have this great idea, but I just I'm bootstrapping a time goes by somebody that's going to come in some sort of fun is going to happen. Does that exist?

12:29

Sure. It does. Yeah, absolutely. And like I said, and in some places that exists more strongly than others. And so I think those are those are, it's, it's the paradox around, you know, the concept of going out and raising money is that that ideally, you're going to be really prepared, you're going to have a lot of experience. That's why I like the bootstrap concept. And you're going to have gone out and skinned your knee a bunch of times and perfected your offering, or whatever it is that you're offering out into the marketplace. But you're right, especially in very high velocity markets, like we're seeing now, you know, for the last say, two or three years, then it puts more of a premium on people, formulating the idea, quietly, getting the team together, and then going and finding a funding source. Now, oftentimes, those people are people who already have relationships and venture. And so they're, you know, I mean, I'll not mention any names, but you know, the some of the folks that we funded or people that we are considered to be bankable from that perspective. And so when they say, Hey, we're working on your project, here's the new project. And then we start to get to know the project, we start to try to add our points of view and perspective and insights. And then if we're really excited about it, we'll fast track it through our organization and and fund it quite quickly,

13:46

as a funding source. So I go down the road, I'm bankable, you like me, I've got some skin in the game. It makes all sense. I agree with you. 100%. I mean, if I was investor, I would want that to I'm not it's it's tough to, you know, just do it, because I'm good looking. And and then you proceed forward. How much involvement Do you in just typical VC gets involved with the scaling of that business, the marketing of that business, the, you know, growth of that business?

14:22

Yeah, I think venture will will have will go in and out of very heavy activity with a company, very heavy, getting the initial funding in place. And then if it's an idea, where, you know, the entrepreneur really just needs, the time and the money to go off and develop the solution, whatever that turns out to be, then then you may be more like a weekly meeting kind of Cadence from that perspective. And so it's not quite as much for me, my area of strength was around go to market. And so I would often look for companies like Mobile Iron, like, response software like Chegg that were in a position where the next thing they need to do is scale. And so that's where I could bring in my expertise and my network of people who've been in funding sales and marketing and these enterprise companies and so forth. So for me, then I get very actively involved in helping to recruit the team getting people on board. But then once you know, once the organization is quote, unquote, scaling, you know, if you're making plan and you're out there, then you're you know, you're introducing the customers, you're working on all these other different things where you can try to help. But it's not quite the same time incentives intensity of of these sort of Nexus points that occur along the way, during different points of funding. And then, of course, at the point of exit, you know, I had a company sky care where I was the kind of the board member on point working once we had an indication of interest from a public company to be acquired. And then once you're involved in that, then that becomes sort of like, all encompassing until until a deal is either had or not had.

15:59

So you bring up a good point where, what is that? You're headed down the road? You've identified these quote, Nexus points, you're saying, Yeah, yep, you achieve certain hurdles probably is like, Yep, okay, good. Let's go. Let's go and you keep on going. Is there a point? And whatever that decision is made a point where you sort of rip that injector seat and saying, it's not going to happen? Do you just sort of take the lumps? And you go, or what? What normally happens in that particular case?

16:30

Yeah, that's a very good question, Scott. And I divided for simple sale divided into two buckets are two paths. One path is the path that certainly I prefer, which is that you're in dialogue with an entrepreneur, you've tried a number of experiments, you've gone to market, you've, you've gotten feedback. And, and basically, it's just not working, it seems like it should be working, it's logical, you're seeing other companies that have similar positioning, they're getting funded, they seem to be getting traction, and it's just not working. And you have hopefully just kind of a rational conversation of look, you know, this isn't worth your life energy level. I mean, yeah, it's not worth my time, but my time is minor compared to the time of the entrepreneur. And so you just simply have a dialog that says, Look, you're too good to spend time on something that you've you've tried and tried, and you can't hit any resonant frequency in the marketplace. And then, and then there's the other side, which is your work with an entrepreneur. And, and they just, they've got so many kind of self locking biases, that have kicked in around confirmation bias, and all these other things. So that they're, they're just like, you know, I've been working on this for years, everybody tells me it should work, I think it's going to work, look, we just got another little tidbit of good news, it's an indication it's going to work. And that's where you end up in a lot of conflict. Because, you know, you've you've, you've gotten involved as an investor, you're an advisor, you're often friends, I mean, most of the time you end up as friends with the people that you've worked with. And then you're in a dialog just saying, Look, this just doesn't, it's either not working for you, or it's not working because of you. And then so that's, that's a, that's a much more tense dialogue. It's like, look, we got to try something else. And either we shut it down, or we we hand this over to somebody else to run and see if they can come up with some things that we haven't thought of yet. But that's a that's a tough place to go. And the the odds of pulling out of that and having a be successful, it's not impossible, and all the ones that are make the newspaper or make the make the news. But most of the time things aren't working, and you just need to move on.

18:36

Ideally, you want to be able to have that conversation sooner than later. Right. You don't want to continue to belabor a challenging business. It's not achieving the objectives as as you had hoped, right?

18:48

Yeah. It's it's a tough dynamic that's got this where I mean, I mean, the third way is if you look at, you know, back when, when I began to work with Reed Hastings on on what was a company that was called sho software at the time, sh, O, with a long O's Japanese symbol for purification, and then later read changed the name to pure software, because we had a product called purify that cleaned up code and was just an amazing 100x improvement of what was going on in the market. And, and what I learned from him working with him over, you know, often on over a year and a half period before the company was even incorporated, is just the concept of perseverance. So so this is the paradox, entrepreneur. And it's the paradox of being a venture capitalists working with entrepreneurs is that the number one characteristics of successful entrepreneurs that I've seen having seen it in person with Reed Hastings, having seen it in person with Mark gagne, and Michael Horvath is perseverance is just the ability to get knocked down, get up, do it over again, knock down, get up, do it over again. A rational person would have quit 50 times before read had actually gotten to the point where we sold the first copy of purify and then by then, you know, it was like a house of fire. It was just, it was just an amazing, amazing experience scaling business,

20:04

ci boy, I'm telling you, I love that I love that perseverance, I, there's, there's one side of me that always in it, maybe it's a frustration on my mind is that many within industry, you know, I'm a product of industry, don't get me wrong, and I love the people of industry. But there's this conventional thinking in industry. And it is a sort of a big piece of luggage that is brought to these conversations. And it's almost, especially today, jump in, if you disagree. But I think today, you have to sort of put that conventional thinking, there's this desire to sort of be a little bit more disruptive. Think about that. And think about how you can approach the market in a way that is unconventional, you have to really sort and that's hard work, especially in industry. Like, yeah, you know, they don't want to do.

20:58

Yeah, yeah, it's, it's tough. It's a tremendous amount of raw emotion that goes along with starting a company working with advisors, whether they're your venture advisors or board advisors, where it might happen to be, and just this constant balance between encouraging and cajoling and trying to be a realistic counselor, to people and their folks in venture to take a completely different approach to this. They just, you know, every every entrepreneur is a nail, and they're a hammer, which is, you know, just go go go go give, give it to your last breath kind of thing. And, like, yeah, sometimes that's right, but actually, sometimes that's wrong. And it's and it's just not fair to people. One of my partners, Steve Solow, counseled a young entrepreneur out of a business that just wasn't a very good business. And the entrepreneur ended up following a passion and participate in a political campaign ended up in the Obama White House, had an amazing life experience doing that, you know, so. So I think it's, I think there's a balance from that perspective. And it's, it's one of the reasons why entrepreneurs get rewarded so much is that if you can work your way through that gauntlet of things and deal with the emotion and deal with the sleepless nights and deal with everything else, and then once once the bit turns, and you know, I watched this with my 49, I mean, with, you know, with COVID, and everything at that before COVID. Mark 49 was a very physical business where we had clients fly to California and incubate new businesses here. And watching what Linda had to do and what the team had to do to pivot to a virtual business. And now the business is literally six times bigger than it was in February and March of 20. So it's exciting when you see these things turn, it's, I call it the halcyon days. So

22:43

see, it's interesting to talk about or hear your story about how nimble Mach 49 is, because I find again, I think, there's good and bad, there's good or bad with the with the, with a pandemic. You know, we got the bad we understand the bad, the challenges with the bad. But the good side, from my perspective, I think there was a vulnerability that existed within industry saying I need help. I don't know what to do. This is way above my paygrade. Right, I have no clue. And, and I, I cherish that, as much as it's painful. As much as created, you know, sleepless nights, it has made companies that were willing to be nimble, willing to sort of be vulnerable, boom, sort of shine and excel in this particular environment.

23:36

Yeah, I think that's a really good observation, I think, you know, what we've experienced that with mk 49 is seeing large companies and seeing people at large companies that had been kind of sort of try try again, on their innovation efforts, their their, their efforts to try to create new businesses to compete with the startups that are disrupting them. And there was the sort of the classic inertia and antibodies and things like that before COVID. And then once COVID, hit picked, kicked in. And there's this blinding flash of the obvious that if you didn't get to digital and virtual in your businesses, then you were Kodak. And and and you weren't going to be in business anymore. And, and so that that became kind of the big flip that then had everybody realizing exactly like you said, Hey, we're vulnerable, like we need help, we need to kind of band together and sort of like, kind of fight back here because startups aren't going away. And, and, and, and we have to get better about being more nimble, and getting out of our own way to be able to accomplish these things.

24:40

That's a tough one for industry. Because typically industry is is, is like, yeah, I've got my idea. I'm right here and I'm holding it close to my vest here, and this is why we're so great. And then all of a sudden, all of this effort here doesn't mean anything. It's like you either survive and you help collaborate with other people who are just having a problem, they might you might have a slice of the solution. But somebody might come in and say, how about this? Hey, that's a, you know, one of those aha moments, I just, I like it. I'm, you know, being the type of guy that I am I like I like speed and velocity and moving fast. And, you know, and making mistakes fast. And, you know, moving on. Let me let me touch upon a point that that happens all the time with many of the companies that I work with, as well as interview whatever it might be. They get approached by venture frequently. And one of the areas that they always say, Yeah, been there. I've talked to them. I'm not sure if I trust them. How do you how do you approach trust within the the VC community? Because some, maybe I'm not talking about mock, I'm just in generally saying there is a attitude about that. What do you what do we do about that?

26:03

And when you say trust, in what form trust between who and whom

26:08

the company and the venture firm reaching out to them and saying, Hey, we can fill in the blank. If we work with Yeah, fill in the blank. And, you know, you will be the next whatever, fill in the blank. Right?

26:22

Yeah. Well, yeah, I think I think it's, I think it's tough, because I think the problem is that whenever there's the perception or the violation of trust, it's so visceral, and it's so meaningful to people that they that it gets repeated, it's the classic negative customer service experience, it gets repeated 100 times, you know, that type of thing. I mean, we had, you know, we were founded by founders at foundation capital, and, and so we, we try to pride ourselves on trying to be really straightforward with people, one of the things that we try to pride ourselves on is telling people No, there's a, there's a phenomenon, Adventurer, and there are some very, very successful venture capitalists that are just like that, you're, you're being a fool, just effectively tell everybody Wow, gee, that's really exciting, come back and see me in six months. And, and you know, and then they just say that over and over and over again, and then it's six months later, the company all of a sudden turns out to be Google, then then they're in great shape, and they can kind of log on or clung on to it. The trust aspect for us is also just having people being willing to listen to things that aren't what they want to hear, and to absorb that information. And either they can follow it, or they don't want to follow it. Right, they can talk to us, and then they can go down the street and talk to Venmo or Mayfield and other folks and, and find somebody who, who gets what they're saying better than maybe what we do from that perspective. So, but the trust aspect of it, you know, once you enter the relationship, and you're, you know, like, if I think about it, I'll use a real life example, I funded a company called response software with with Mike Armour as the CEO. Now, I had the advantage of Mike and I've been together since 1992, when we when I recruited him to pure software. And we've done several businesses together over the over the years. And but you know, in terms of like working with Mike and working with this team, there's just very high fidelity conversations, like there's never any question, are we getting all the information we need? Are they asking for the help? Were they needed? Are we you know, being transparent? Are we working hard to try to help the company? So that would have been one if respond hadn't work? We were to just simply said, look, it just, it wasn't a good enough idea, right? We, you know, everybody did what they're supposed to do, we had this trust based relationship where everybody would show up. And, you know, there's just never any question. And when you're in, when you're in a trust based relationship, then the politics also go way down. So that's also like a nice side benefit. But then ultimately, in the case of respond, you know, they ended up having a really, you know, they got they got bought by FireEye, and had a really, really nice financial exit that ended up out of that. So that was kind of about all's well, that ends well, but it was kind of all's well, all the way through, for the most part in terms of dealing with the people. I've had other relationships, which I won't name, and entrepreneurs that I've worked with, who will look me like right in the eye. And tell me for example, oh, when the time's right, I will definitely step aside. You know. And I've literally I've had situations where I've had the entrepreneur tell me that I've had situations with the where the board member that the entrepreneur had recruited into the kind of the seed stage tells me the same thing. And then we're like six months down the road, we haven't we've made 10% of our plan. And a second, guys, it's time let's gotta move to Plan B, let's kick the CEO up into the chairman and let's go out let's get a search done and go do this stuff. And they're like, oh, no, no, no, no, no, that's not where we met. Like, we still don't think we're ready. We're like we're ready is ready when we turn the lights out, because I don't think you know, it's gonna be kind of hard to recruit somebody in here. And it's, it's this is what I mean like the The human factors become huge. And you sit there, and you're just incredibly frustrated. And in one particular case, I resigned from the board, because I just said, I said, Look, I can't have an impact here, you guys aren't doing what you said you were gonna do, you need to take a different direction, and it needs to be without me.

30:19

See, I, I can, I can respect that honesty. And I can respect that truth. And that is important. In in these cases, where you have to sort of pull the Objective C, and I don't want a big long dissertation on it, because I know it can be really like a rabbit hole, can you sort of distill it down to why projects fail?

30:44

So there are three aspects of what we're looking for at foundation in in a really good startup company. And so I describe it as kind of this inverted pyramid, you know, this kind of upside down triangle? Yeah. So at the top of that triangle are these you know, in our case, through 4000 companies a year seeking funding at the bottom of it, or 10, that we fund that at a at a significant level? So what are the three layers within that triangle? And the first one is market? You know, are you addressing something that has a large enough market opportunity to create a venture style return? The second one are the strength of either that's kind of technology, we used to say the strength of technology, then we funded Netflix, and we said technology or the business model? And then finally the people. And then there's this question of like, well, why are the people last and so well, that people are not last? But the it's in that order? Because that's the order in which we can change things? Like we can't change the market? Like we're not no, no venture firm can really change the market. And then, you know, we can kind of change the technology with some pain, and kind of change the business model. But the thing that we know we can change is that if if we think the markets, right, and the business models, right, we can we can upgrade people, we can bring new people and we can do these other things. So if I use Netflix as an example, when my partner Mike Chu funded Netflix in December 1998. At that time, you would you would argue, wait a minute, why did you guys funded it violated your market kind of Axiom, right, because there wasn't a big enough market DVDs had about 2% penetration into American households at that point. And they were they were renting DVDs. But the studies indicated that that market was going to get to 20 or 30% of households as well, as now we know with history behind us that got to 98% of households. And then that allowed Netflix to go through stage one and then ultimately, stage two what they're trying to do. But but these are the it's market technology people. And and the biggest form of failure for us is what we call a small market problem. We funded something I thought it was going to be huge. And then it just turns out not to be and then there's technology failures. And then there's people there's

32:58

very, very good now I have to venture into NEOM. I know that Mark 49 is a heavily involved in NEOM and the business there. Why is that important for Mark 49 and Neil?

33:14

Yeah, so So NEOM is, of course, this this New Year planned to be kind of semi autonomous territory building being built out of an area in northwestern Saudi Arabia, about the size of New Hampshire, just to give you kind

33:28

of James Bondish, FYI. Yeah. All right.

33:31

Yeah. So it's on the Red Sea. You know, and, and the idea is that the that the the funders of NEOM are, basically want to build the quintessential kind of city of the future and society of the future. So think of a new Singapore, new Dubai, whatever it happened to be, but you know, sort of on steroids. So 14 different sectors of activity and energy, hospitality, consumer technology, food, and agriculture, all these different places. And so what naomh is about is it is, you know, at the moment, I think it's probably the largest project in the world, it's about a $1 trillion investment project in the world. And so what we see in the film is an opportunity to offer new forms of opportunity for people in Saudi Arabia. And also just to kind of more broadly, in the Middle East, we see it as a way to advance the cause of clean energy. Women entrepreneurs, and Saudi, all these other different things that we think are good for the planet and good for, you know, sort of the growth of Saudi Arabia as a as a country. And at the end of it, you know, we are a essentially technology service provider, and this is the largest technology project in the world. So it's a it's a, it's a phenomenal opportunity for us to go in and help grow these sectors and help grow their approach to creating new ventures and how they manage venture activity including some of the funding to get them to a place where these sectors can be successful. Awesome. So it's not show,

35:02

I gotta tell you, man, it's a bold vision. And what I like about it is that they're addressing problems that they didn't know they had, right? They have to solve significant problems because they're building a community, they have, you don't even know the amount of problems. But what's interesting about it is that they're willing to do whatever is necessary to solve those problems to make this this happen. But I look at it from a world perspective, too, is that whatever flips out of that, whatever solutions take place, it has great benefits for many. And that to me is really pretty cool. But you have to have that bold, persistent drive to make it happen. Because I guarantee you, when, when I was speaking with some of the people that Neil is like, it, you know, why not give up now? I mean, that it's like, Oh, right. There's another problem. I'm done with the problems? No, they just keep pushing on. They keep expanding. And you're absolutely right, it is the largest project, I have to say, in the world.

36:10

Yeah, yeah. So So assuming it works, we're gonna see new forms of transportation, we're gonna see new forms of the way people, you know, what we now think of as going to a hotel, think of going to a, you know, 100% robotic hotel that has these amazing experiences for you, in terms of energy, you know, they're there, they're 100% focused on a clean energy future for NEOM. And it's obviously strategic for Saudi, because they're conscious of the fact that they've got a wasting asset, ultimately, in terms of carbon based energy forms. And, and so, you know, as we look at these things over time, you know, we think that they could be, you know, very, very exciting, and they could have broad applicability and broad benefit for humanity.

36:56

Yeah, and I see, I, one of the things that sort of creates a little tension inside of me is that I see this velocity, I see what you're doing, I see what NEOMs doing. And I see the speed at which all of this, I'll just say, industry for Dotto is happening. And I get concerned about other parts of the world who just don't have access to it, right? They don't I mean, it's going so fast, that there's no way in God's green earth, that they're gonna keep up. They're just not. And that to me is a, it's a point of friction for me. How can we make it for everybody?

37:29

Right? Yeah, well, we have to hope. I mean, I mean, I've been very fortunate London, I've been to 74 countries over the course of our lives. And, you know, I have this sort of, you know, pollyannish belief, and I've seen it in person, every single country has the same potential in human capital, I mean, some of the places, sort of better universities and have better educational systems and things like that. But, you know, I've literally met and spent time with entrepreneurs in Zimbabwe, and Zambia, in Nepal, in Mauritius, in, you know, in, in, all over the world, and, and, you know, it's the same kind of drive and human spirit, there's something almost like at a DNA level, for people who want to do better for themselves and do better for their families, we have to get to a place where, in many places around the world, the governments are so corrupt, or they're so ineffective, that they're, they stand in the way of the human capital, their their people's ability to be able to prosper. And then we have to do like, significant remediation, around enabling, you know, Wi Fi all around the world, and enabling education around the world. I do think that is one of the side benefits of COVID is that, you know, it's really, if I look at, you know, one of my companies check. And if I look at many of the other companies, digital education, you know, they've advanced tremendously So, notionally, if you think about it, you know, if we get to a place, you've got Starlink, and you've got other things that are providing Wi Fi all over the world, then there's no inherent reason why somebody in Angola, you know, as a six year old, Angola can't have access to the same educational experience as a six year old in Menlo Park, or it might happen to be now that there's going to be differences of resources and teachers and role models and all sorts of other things that are there. But over time, I'm optimistic that we can actually make this better, not worse.

39:23

See, I agree with you. I'm pretty excited about it. Right? I do i the thought of being able to have access to unlimited information, unlimited insights, and I think is exciting. And I believe countries are transformed as a result of that. And I believe that through technology and through these capable capabilities, that corrupt governments will have their unfortunate role, but I think you're able to sort of use that technology to help better better the lives and the communities and definitely the world as a whole. I do. I'm not afraid, frightened of the technology, even though I'm old.

40:09

Like, there's a there's a concept and you're probably familiar with this. But yeah, this has been popularized by people in the crypto community. But that is a book called The Sovereign individual that describes a future enabled by the end of the information age, where you basically kind of circumvent the inefficiencies. And they end the corruption associated with many governments around the world. And you enable individuals through information technology to achieve their goals, in one form or another. Now that concept takes on controversial elements, when when you apply that to, you know, billionaires, for lack of a better way to describe it. But But nonetheless, the it's, it's sort of an inexorable concept. You know, we went through the hunter gatherer age, we went through the Agricultural Age went to the industrial age. And we're clearly now in the information age and, and as part of the information age, or all of the things that we took with us from the last sets of things, you know, the governmental structures, the way we approach these kind of controls and things like that, are all those really the most appropriate ways to think about that, as you move further into the information age? And and I think it's going to require evolution across the board.

41:24

I think it's doable. I think the future is bright. I think that yeah, there's gonna be pain just like anything else. But I think that, once again, back to the pandemic, maybe that was the spark. That was, I think that we were bringing our B, maybe maybe our CB game, pre pandemic, now we got to bring our a game, we've got to, we got to get past all the fluff and all the politics and just get to solutions, and solving problems. And I think that that's where we're at, Bob, we're gonna have to wrap it up, I can keep on going for days, you wouldn't want to go for days, that's for dog, people, how would somebody get a hold of Paul Mach 49? If they have any questions, comments, on how to enter?

42:02

Yeah, so I mean, we, you know, if you just simply go to the Mk 49, website, www.ma, CH four nine.com. kind of scroll through, look at the things that are there, if you see things there that could be interesting for your, you know, typically work with large companies and help them create growth, as we call it to restaurant disrupting inside out, disrupting outside in, and then keep on the lookout for the next big strategy book coming out from Hartford press is the unicorn within. That's vinelandii eights are founder and CEO that's coming out next year.

42:36

Oh, I happen to have a library and I better get a copy of that book. There you go. Well, thank you very much, Paul. Excellent, excellent conversation listeners. Don't worry, we're gonna wrap it up on the other side, you know, you're going to be able to get a hold of Paul and everything else associated with Mark 49. So fear not. We'll be right back. Thank you, Scott.

42:56

You're listening to the industrial talk Podcast Network.

43:06

All right. I don't even know how to unpack that conversation. There is so many gems, so many points of wisdom. In that conversation, I highly recommend that you go back, reach out to Paul, of course, you got to go to Mach 49. Of course. Now he has a great stack card out there. Paul Holland. Put a little comment in there, boom, Mach 49. You will find him up close and personal grade stack card chock full of information. Alright. Neil, you've got to go out. You've got to be you've just got to at least begin to educate yourself about them and what they are doing and see how they can impact you in a positive way. But at least they're in the game money where their mouth is. That's what they are doing. Alright. Again, we're gonna always have a great conversation right around the corner. However, you need to be bold, brave, daring greatly. You need to be persistent. You need to have skin in the game and you need to do everything you can to be a success, because we depend on you. Thank you very much for joining. We are going to be right back

The post Paul Holland with Mach 49 appeared first on Industrial Talk.

On this week's Industrial Talk we're talking to Michelle Katics, Co-Founder and CEO of Bankers LAB about “Powerful Financial Simulations with Real Insights”.  Get the answers to “Financial Simulations” questions along with Michelle's unique insight on the “How” on this Industrial Talk interview!

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PODCAST TRANSCRIPT:

SUMMARY KEYWORDS

lending, work, big, bank, customer, bankers, industry, financing, equipment, finance, manufacturer, product, rusty nail, manufacturing, solution, simulation, piece, democratized, create, innovation

00:00

All right industrial Talk is brought to you by endeavor Business Media. Now I'm telling you man, they put on a great show I was at the one that they put together called the manufacturing and technology show in Cleveland, Ohio. You got to put that one on your bucket list for next year. Great venue, great event, and put on by a great company with great people that's endeavor Business Media, go out to endeavor business media.com Find out more, you will not be disappointed enjoy the interview.

00:35

Welcome to the industrial talk podcast with Scott Mackenzie. Scott is a passionate industry professional dedicated to transferring cutting edge industry focused innovations and trends while highlighting the men and women who keep the world moving. So put on your hardhat, grab your work boots, and let's get

00:52

right once again, welcome to industrial talk the number one industrial related podcast in the universe. And I'm not overselling that at all. And we celebrate industry heroes such as yourself, because you are bold, you are brave, you dare greatly solve problems, you are changing lives and you are changing the world each and every day. And that's why this platform is dedicated to you. That's why we celebrate you. Here we are broadcasting from the manufacturing and technology show here in Cleveland, Ohio. And I want to give a big shout out to all the manufacturers that have great I mean, it's full of solutions, right here solutions, you got a problem. They've got a solution. That's what the manufacturing and technology shows all about in a hot seat. Most shell kennix Did I get that right? I got I nailed the kennix part. And she is co founder of bankers lab. And you say to yourself, Scott, I don't know you will know about bankers lab after this conversation. Michelle, how're you doing?

01:51

I'm doing really well.

01:53

That's good. I've been stalking you for the past couple of days, which is pretty creepy. However, I when you lose, I found you. And you're on the podcast because your story needs to be told who was the other founder.

02:05

The other founder is Kurt Gingher, who's our CTO and he designed our simulation algorithms which have been used in industry for over 10 years.

02:15

You've been around that long we have. It's pretty cool. By the way. It's cool that you have the URL bankers lab. Oh, yeah. But unless somebody says bankers slab, yes, they do that too, huh? Of course, it would be me. Because reading is not a strong suit for me. So for the listeners out there, give us a little background for one one on who you are. Sure,

02:41

I am a recovering banker. And I'm sorry to hear that. And I'm a banker who was trying to solve our own problem. So I worked in a big global bank that had 57 countries. And we were supposed to teach everybody in 57 countries how to manage complex lending portfolios. Okay, not easy. No, spoiler alert. Even bankers aren't really sure how to do that. And what I realized is that when we just put them into a simulation, kind of like, you know, if you want to learn to drive a motorcycle, you can do those fun Moto GP. Right? Right. Games. Right, right. Learning by doing so we created this numerical simulation to just let people do what if and what if I did this? What if I did that? And it worked.

03:26

So it's not it's an Excel spreadsheet right now? A little bit more. So

03:31

it's slightly more Yes, it's a web application that is hosted on AWS and Azure from Microsoft. So Kitty, it's a we've used it in over 30 countries. And initially by you know, obviously a big customer base of ours, our banks and financial institutions. But now, it's spreading across the world.

03:54

So here's the deal. So, so you come up with this platform, this algorithm, this solution that can give you the ability to do what ifs, which is what the financial institution should be doing each and every day, right? And now they're using your product.

04:10

Correct. And furthermore, we're saying wait a minute, the manufacturers can actually beat the banks at their own game, because the manufacturers understand their customers that they're selling their goods to they understand the right they can create a sticky so if you're a big manufacturer, and you're trying to sell big piece of equipment, if you tell the guy, good luck, go to the bank, when you get back and got your loan, then I'll sell it to you. Instead, you can say, you know, what, what's your issue? We'll create a financing option, which many manufacturing companies do, but now it's democratized because of cloud computing. So even a relatively small manufacturer can be their own GE Capital.

04:52

Okay, you're gonna have to run me through that. Sure. Because here's, here's my thinking, my thought process. I recognize it Because I love finance. I've created the models, unfortunately, all through Excel. But I became very good at it. Anyway. How does how does one? How does one do that I, here's my typical understanding, I've got a need, I need capital, I go to the bank, then they look at my whatever they look at financially, then they say yea or nay? Or we will do it if this and this is it. That's sort of the traditional, how does that differ?

05:32

Oh, well, first of all, our partner, turnkey lender has the automated platform, and they use API's to pull in data from here and there and everywhere. So they can automate it, you know, set up some models in there, give those risk indicators. And also, you know, you don't necessarily need AI and all this data, for example, you know, let's say, their first time customer, start out with a, you know, a rent to lease, and then the minute they start paying on time for three or six months, step them up to the lease to own and then expand your product set. So you can do your product design as the financer to, you know, encourage that product step up with the customer. So sometimes it could just be role based. Other times you can pull in AI for other stuff. And, you know, we we help banks and any lender design those products, and then you play around with the sim

06:25

see, to see that that's where the real from my perspective, because I would always like to dabble and do what ifs and you simulate all day long. But you through that activity through that simulation, I believe you learn more you understand more, you're saying, Oh, I see how I did this, it impacted that I understand all of that. It makes me an owner, probably more are knowledgeable about the financial implications of whatever the decision I need to make. Do you ever get to a point where somebody is playing around with that simulation, seeing it ride and work in it? And decide? No, I just can't I just I can't justify it. I just can't get the numbers, or do they come to you and say I'm trying to get here? What do I do?

07:18

What typically, I mean, there's no one right answer. So it's really being dynamic to the situation. So even in an economic downturn, saying, Gosh, it's downturn, should we just shut up? No. Figure out how to adjust your parameters, adjust the strategy for the current situation, situations change? So yeah, maybe you need to cut back your exposure amounts or, you know, be a little more conservative in those lending decisions during the downturn. But but the point is, the world is not a place where you can just say yes or no and shut shop, it's a matter of being dynamic, and being able to gain things out. In any economic scenario.

08:00

Can I take your solution, your tool, and look at it from a more holistic point of view from my business and say, Here's, this is my business. And this is how it's sort of, and be able to put in those parameters to saying, Okay, I've got a picture of it. And then I can come back and say, however, I want to look at this line, and then I'm thinking about adding some assets to it. What does that look like? Does that does the product a solution helps stimulate those like, Okay, you're going to increase productivity by, you know, 10%, that means bottom line is, whatever in a manufacturer, you do able to do that?

08:41

At the moment, our focus in simulation is on the lending piece or financing piece. So we don't currently have an off the shelf that would simulate the manufacturing productivity per se. Right, right. We focus on the lending part, any type of financing, etc. But certainly, maybe you should be talking to our CTO about that.

09:01

Yeah. Because Because if I'm gonna, if I'm going to take a line, and I'm, and I'm more tactical in this particular approach, if I take a line, and I say, what if I deploy 50,000 In this capital on this line, to increase it by 10%? What is my, you know, benefit, financial benefit? What is it even worth it?

09:22

Right? This sounds like what we call a business simulation. Right? Right. So they're a little bit different. Meaning, you know, what we're doing is numerical simulation, because it's a set of algorithms right? database, you could have 100,000 loans in there. Whereas what you're describing, we call business sim, because you're doing business strategy, and that's something we have partners who do that, certainly lots of solutions like that out there.

09:47

But then again, it all comes back. If I want to, if I want to deploy some assets, and I need to go find some lending. I'm gonna have to just I have to justify the fact that if I do that it's gonna it's going to reap the benefits as I believe it should, and therefore my lending should reflect that too. Yes, that's right. On my resume,

10:11

I'm just gonna say if this podcast thing doesn't work out for you, and you can run a spreadsheet,

10:15

oh, boy, can I do that? I tell No, I will not do that again, all I do is add and subtract now and in my do some percentages, I've got rid of to all be doing V lookups. No, no macros and, and everything else. So why? If you're in banking, why is this so interesting to you? Especially from a manufacturing perspective, why

10:44

the purpose and mission of bankers that from the beginning was to use finance to make the world a better place, whether it's ensuring that banks lend safely by having them on simulations and saying, Hey, guys, if you do this, it's not going to turn out great. So we've always tried to educate the financial sector. So lending can be done to help the economy. Right? properly, right in the menu factoring sector for us, the excitement is that there's a lot of friction in and I guess, inefficiency in the finance piece.

11:21

I think your soft pedaling it, it's more like a, a rusty nail in your eye.

11:29

I think I would not disagree with that. And so let me paint you a picture of the dream, a picture of the dream looks like, you know, I'm a manufacturing company, and I have these clients, and I'm not gonna ship them off to the bank anymore. They want I have a really innovative piece of equipment. So I can create really creative financing options to help them do their beta tests, so they can try new technologies. I know that customer, I can step them up through my product set, I can, you know, I know so much more about that customer than the bank does. So why don't I leverage that to deepen the relationship with my customer to and by the way, I get to make money coming and going now, because I've made money on my equipment margin, and I also made my interest income on the whole amount that I went for. So I get to make my money twice. Now.

12:22

How great is that? I'm having a hard time following that, that that analogy? Are you saying me use me as a manufacturer? And you're saying if I work with my customer, my customer base? Hey, customer, I'm thinking of putting in this piece of equipment so that I can deliver this particular solution to you right? Now, is it upon the customer side saying, Hey, that sounds like a great idea. Then what?

12:52

Yeah, so let's say we're, we manufacture big, let's do 3d printing machines. Right? Right, right across from us

12:59

there. It's like watching paint dry, quite frankly, Washington, it's like, great, it's still zipping around doing whatever it needs to do.

13:11

It it's like the the additive sector, right, where they have all this new technology, new machinery, new equipment. And, you know, I go out to my small businesses who are using my additive machinery, like, Hey, we got new stuff coming out that you guys can create this new process for nanotech or whatever. And the production company is like, but we don't have the cash outlay for that guys, no way. We have a financing option for you, where you can do your beta tests with the equipment, equipment as a service, so that they can try out the equipment, whatever financing product is suitable to help you sell that equipment to the factories who are going to use it.

13:53

See, that's interesting because we were being fed, especially in manufacturing and industry as a general about this industry for Dotto, and all of the Mad technology and innovation has going on there. And and for me, it's it's cool. Don't get me wrong. I'm all giddy about it sometimes. But the reality is, is I want to test drive. I can never get past the option of saying, I hear what you're saying about that data, that IoT device, but can I test drive that thing? And be able to do it? Because Because if it proves to be a successful test, then then there's some greater there's greater possibility for financing. Like yes, if you've removed some of the the risk, right of that decision. That's right. So yeah, like that. That's, that makes sense to me.

14:48

And I think they're whether you're a larger or smaller manufacturer, just you know, now that we've democratized access to these type of lending tools

15:00

gotta back up. How do you define democratized?

15:02

Well think about it this way in the past GE Capital, they, they figured out right away how we make money twice if we finance the product itself, right. But at that time, they need a big on premises mainframes and all this stuff, they needed a big team of people and data scientists, all this right to create that finance function. These days with cloud computing, software service subscription model. Yeah, the parameters, you know, in the turnkey lender software, you know, you have drop down menus, you just pick what you want as your parameters. You know, we go in there with the simulation to help you pick which option you want in the drop down menu, but it's just like anything else, you know, accounting software has been democratized, you don't need these big huge systems, it's very easy to plug and play this software service world, which is one of the solutions here at the conference, for any type of thing people need, whether it's an HR system or safety monitoring system, okay. Whereas before you needed to, you know, you do this big software development project and have a mainframe and blah, blah, blah,

16:08

again, a rusty nail in your eye. Proposition. And I think we go down that road.

16:16

Well, no, and I think my, the painful part of the rusty nail is that it's holding back innovation. And that's what this conference is about. It's about what northeastern Ohio is about is how do we drive innovation. And if you can't take the friction out of the financing piece, we will never get there.

16:34

See. And I love that I love the fact that I was just having a conversation with and we mentioned friction. I said, if you make it make it too hard, then then I'm not progressing. I do not have the habit within me to do that. But if you make it away, that is it that is simple. stressless to a certain extent, but being able to realize the results that you're shooting for, or good, bad or ugly, it doesn't matter. But but you're able to get to it relatively easy. I think you got a good button business model there in a big way. One last question. Why is it important? And there's no political angle here? Why is it important that I believe women need to be more engaged with manufacturing?

17:23

Why believe that any good business is successful because they understand their customers. And half of our population is women. Yeah, God. And I think the other thing is that any great product comes from a collaboration of diverse viewpoints, diverse backgrounds, and everything just gets better. So those diverse viewpoints, hearing different points of view different ways of thinking about stuff, and also the ability to to understand half your customer base. With that diversity. It just, it just makes everything better.

18:03

How do we add that? Sorry, I said the last one was going to be the last question. But this is the last question. I guess, maybe I'm going to keep it up and open. Is how do we how do we begin to encourage greater participation? Yeah, there's I agree with you 100%.

18:21

But how do you get there?

18:22

How do you get there? I agree with you, 100%. And granted, I've been in the room a bunch of guys, and we come up with an answer. And and sometimes it doesn't work. I don't want that.

18:33

I think it's there a couple simple things. Number one is always have bought a girlfriend. Like, by the way turnkey lender. Yeah, we, that's our partner company. And I originally know them because their CEO was was pitching and I was for mentor. Oh, no kidding. She probably knew more than me at the time,

18:52

at the time. Now, doesn't matter.

18:55

Because, you know, we joined forces, and we're stronger by working together. And, you know, I've been mentored by men and women, and I wouldn't be what I'm doing without that. And whether it's through, you know, working with the, you know, student interns or universities or just other companies, just that mentoring piece and just trying to have each other's back and be mindful about it, I think can get you a long way.

19:22

I think it has to be a focus. I think it just like anything else we all talk about, how do we how do we upskill how do we rescale How do we do with it find people to it's it's never ending, quite frankly. But we're going to have to figure it out. And I think it's strategic and very important to our country as a whole. Not looking at it from a macro perspective. We can't play around in this too long. We got to figure out the results. How do people get ahold of you?

19:48

Michelle at Bankers lab.com Am I ch e ll e at Bankers lab.com

19:55

I do not do what I did where it says banker slap don't do that. Don't do that. Don't do that. Bankers. lab.

20:02

You can find us on Twitter and LinkedIn and we're all

20:05

alright. Hey, you were absolutely wonderful. Excellent. I like it. And I can geek out. Yeah, I didn't even go down that rabbit hole. I was going to you're going to, but I didn't know I saw. Yeah, that's right.

20:16

That's right. Anybody wants to geek out on finance? Give us a cup. Yeah.

20:20

It's the right thing to do. All right. All right. Once again, we're broadcasting from the manufacturing and technology show here in Cleveland, Ohio, by the way, I love Cleveland. It's awesome, isn't it? Oh, well, it's me. I love it. All right, we're gonna wrap it up on the other side. So don't come to me and say, I can't get a hold of the show, because we will have all the contact information. So stay tuned.

20:44

Thank you. You're listening to the industrial talk Podcast Network.

20:55

All right, great conversation with Michelle, thank you very much for being on industrial talking, man. Definitely delivering the goods. At the manufacturing and technology show. We were once again, there in Cleveland, Ohio, doing a real time baby, doing it real time and delivering value at that particular time and celebrating industry heroes such as yourself, go out to her LinkedIn stat card out there. That's a shell TEDx, aka tics reach out, create a friendship with her. That'd be great. Because I think what they're doing is absolutely spectacular. Again, we're all about education. We're all about collaboration, and definitely about innovation. And we feature all of those individuals that bring that to the table. You are bold, you are brave. You dare greatly. That's why we do it. And you're changing lives and you're changing the world. Thank you very much for what you do. We're gonna have another great interview right around the corner. So do not go away. We'll be right back.

The post Michelle Katics with Bankers Lab appeared first on Industrial Talk.

The post Ms. Nicola Fraser with Nextkey Service talks about aligning Risk Management with Operational Goals. appeared first on Industrial Talk.

On this week's Industrial Talk Podcast we're talking to Dr. Josh Luke, Founder of Spend Less on Heathcare.org, about How to Eliminate Wasteful Healthcare Spending.

During this Podcast episode, Dr. Luke talks about the 5-key points that support the need design for safety and reliability:

1. Healthcare is bankrupting American businesses and families.
2. Become and EHC – An engaged healthcare consumer.
3. Adapt the Ten Free Tips to Spend less on Healthcare.
4. Have a Plan based on Peronalized and Preventative Medicine.
5. How employees using Personal Spending Reduction Tool can save them each $5 k in less than a year, and the employer even more.

Learn more about Dr. Luke and how to reduce your healthcare costs by the links below and on this podcast:

Company Website: https://spendlessonhealthcare.org/

Personal LinkedIn: https://www.linkedin.com/in/drjoshluke/

Company LinkedIn: https://www.facebook.com/HealthWealthDrLuke/

Company Facebook: https://www.facebook.com/HealthWealthDrLuke/

Instagram: @drjoshluke

Twitter: @JoshLuke4Health

PODCAST VIDEO:

THE STRATEGIC REASON “WHY YOU NEED TO PODCAST”:

OTHER GREAT INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing Solutions:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

Safety With Purpose Podcast: https://safetywithpurpose.com/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

LifterLMS: Get One Month Free for $1 – https://lifterlms.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

Industrial Academy (One Month Free Access And One Free Licence For Future Industrial Leader):

Business Beatitude the Book

Do you desire a more joy-filled, deeply-enduring sense of accomplishment and success? Live your business the way you want to live with the BUSINESS BEATITUDES…The Bridge connecting sacrifice to success. YOU NEED THE BUSINESS BEATITUDES!

TAP INTO YOUR INDUSTRIAL SOUL, RESERVE YOUR COPY NOW! BE BOLD. BE BRAVE. DARE GREATLY AND CHANGE THE WORLD. GET THE BUSINESS BEATITUDES!

Reserve My Copy and My 25% Discount

The post Dr. Josh Luke Talks about simple tactics for business leaders and employees to eliminate wasteful healthcare spending appeared first on Industrial Talk.

In this week's Industrial Talk Podcast we're talking to Domenic Rinaldi, Managing Partner at Sun Acquisitions about 4-M&A Steps to Ensure Proper Preparation and Financial Success. So you're interested in expanding your Industrial “footprint”. Well, you can grow organically over time or you can entertain industrial expansion strategies that include Mergers and Acquisitions of businesses that meet your expansion objectives. In both all cases you need a skilled M&A team focused on your success. Learn more about Domenic and his wonderful team at Sun Acquisitions on how to leverage their valuable insights into creating solid solutions for your M&A strategies. Find out more by the links below:

Company Website: https://sunacquisitions.com/

Company Facebook: https://www.facebook.com/sunacquisitions/

Company LinkedIn: https://www.linkedin.com/company/sun-acquisitions-llc/

Personal LinkedIn:  https://www.linkedin.com/in/domenicrinaldi/

Company Instagram: https://www.instagram.com/maunplugged/

Twitter: twitter.com/MAUnplugged

PODCAST VIDEO:

OTHER GREAT INDUSTRIAL LEARNING SOLUTIONS:

Infor's Educational Alliance Program:  https://www.infor.com/services/education-alliance-program

Infor's GenOne Program: https://go.infor.com/genone/

Festo Didactic: Blazing the trail in hands-on Industry 4.0 training: https://www.festo-didactic.com/us-en/

OTHER GREAT INDUSTRIAL RESOURCES:

InforEAM:  https://www.infor.com/products/eam

Safeopedia: https://www.safeopedia.com/

Industrial Marketing Solutions:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

Safety With Purpose Podcast: https://safetywithpurpose.com/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

LifterLMS: Get One Month Free for $1 – https://lifterlms.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

Business Beatitude the Book

Do you desire a more joy-filled, deeply-enduring sense of accomplishment and success? Live your business the way you want to live with the BUSINESS BEATITUDES…The Bridge connecting sacrifice to success. YOU NEED THE BUSINESS BEATITUDES!

TAP INTO YOUR INDUSTRIAL SOUL, RESERVE YOUR COPY NOW! BE BOLD. BE BRAVE. DARE GREATLY AND CHANGE THE WORLD. GET THE BUSINESS BEATITUDES!

Reserve My Copy and My 25% Discount

The post Domenic Rinaldi with Sun Acquisitions is talking Industrial M&A Strategies for Success appeared first on Industrial Talk.

BACKGROUND – What is Asset Based Lending or ABL?

An asset based loan (ABL) is a type of business financing that is secured by company assets. Most asset based loans are structured to work as revolving lines of credit. This structuring allows a company to borrow from assets on an ongoing basis to cover expenses or investments as needed.

Asset-based lending (ABL) is a great solution for businesses that have needs that are outside of what traditional banks can offer. Whether it’s greater leverage, softer covenants, or more flexibility, asset based structures can be customized to meet the needs of each individual company. Asset-based lending provides a line of credit based on your company’s eligible:

• Accounts receivable
• Inventory
• Machinery and equipment

Asset-based lending offers more flexibility than other methods of financing, and is a fast and cost-effective way to obtain working capital. Unlike certain types of structured financial products, with an asset-based lending relationship, you do not have to give up equity in your company. ABL gives your company the flexibility it needs to grow, recapitalize, take advantage of supplier discounts, buyout shareholders, or even to fund payroll. It can increase or decrease based on your current business size and needs, and you’ll have daily and weekly access to your line of credit when you request it.

How Asset Based Lending Works:

Businesses need to take out loans or obtain lines of credit to meet routine cash flow demands. For example, a business might obtain a line of credit to make sure it can cover its payroll expenses even if there's a brief delay in payments it expects to receive.

If the company seeking the loan cannot show enough cash flow or cash assets to cover a loan, the lender may offer to approve the loan with its physical assets as collateral. For example, a new restaurant might be able to obtain a loan only by using its equipment as collateral.

The terms and conditions of an asset-based loan depend on the type and value of the assets offered as security. Lenders prefer highly liquid collateral such as securities that can readily be converted to cash if the borrower defaults on the payments. Loans using physical assets are considered riskier, so the maximum loan will be considerably less than the book value of the assets.

For example, if a company seeks a $200,000 loan to expand its operations. If the company pledges the highly liquid marketable securities on its balance sheet as collateral, the lender may grant a loan equaling 85% of the face value of the securities. If the firm’s securities are valued at $200,000, the lender will be willing to loan $170,000. If the company chooses to pledge less liquid assets, such as real estate or equipment, it may only be offered 50% of its required financing, or $100,000.

In both cases, the discount represents the costs of converting the collateral to cash and its potential loss in market value.

Typically, Interest rates on asset-based loans are lower than rates on unsecured loans or lines of credit since the lender can recoup most or all of its losses in the event that the borrower defaults. However, the interest rates charged depend on the applicant's credit history, cash flow, and length of time doing business.

Key Takeaways:

• Asset-based lending is loaning of money using the borrower's assets as collateral.
• Asset-based lenders prefer highly liquid collateral such as securities to physical assets such as equipment.
• Asset-based lenders primarily serve small and mid-sized businesses that need to routinely cover short-term cash flow demands.

Business owners seeking immediate capital, leasing solutions to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

OTHER INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

Bliss Drive: https://www.blissdrive.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

OTHER RELEVANT PODCASTS:

Industrial Leasing Strategies and Benefits with Keith McAslan

Industrial Sales: Looking for Something Easy.

The post Secured or Asset Based Lending With Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Secured or Asset Based Lending With Keith McAslan appeared first on Industrial Talk.

BACKGROUND:

The key with leasing is understanding if someone wants a Capital or Operating Lease. An operating lease is treated like renting — payments are considered operational expenses and the asset being leased stays off the balance sheet. In contrast, a capital lease is more like a loan; the asset is treated as being owned by the lessee so it stays on the balance sheet.

The differences are significant and as follows:

CAPITAL LEASE (also known as – FINANCE LEASE or SALES LEASE):

A capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee. This results in the recordation of the asset as the lessee's property in its general ledger, as a fixed asset. The lessee can only record the interest portion of a capital lease payment as expense, as opposed to the amount of the entire lease payment in the case of the more common operating lease.

The criteria for a capital lease can be any one of the following four alternatives:

1. Ownership – The ownership of the asset is shifted from the lessor to the lessee by the end of the lease period; or
2. Bargain Price Option – The lessee can buy the asset from the lessor at the end of the lease term for a below-market price; or
3. Lease term – The period of the lease encompasses at least 75% of the useful life of the asset (and the lease is non-cancellable during that time); or
4. Present value – The present value of the minimum lease payments required under the lease is at least 90% of the fair value of the asset at the inception of the lease

If a lease agreement contains any one of the preceding four criteria, the lessee records it as a capital lease. Otherwise, the lease is recorded as an operating lease. The recordation of these two types of leases is as follows:

• Capital lease. The present value of all lease payments is considered to be the cost of the asset, which is recorded as a fixed asset, with an offsetting credit to a capital lease liability account. As each monthly lease payment is made to the lessor, the lessee records a combined reduction in the capital lease liability account and a charge to interest expense. The lessee also records a periodic depreciation charge to gradually reduce the carrying amount of the fixed asset in its accounting records.
• Operating lease. Record each lease payment as an expense and therefore reduces operating income and lessens the tax laibility. There is no other entry.

THE MIDAS ADVANTAGE:

MIDAS will work directly with your business to create a fixed rate leasing solution to acquire equipment from one or multiple manufacturers. The MIDAS team can quote competitive payments designed to fit into your budget. Simply select all of the equipment; then, we develop buyout (Fair Market Value, $1) and pricing (monthly, quarterly, annually) options for you to choose for your lease financing program.

Business owners seeking immediate capital, leasing solutions to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

OTHER INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

Bliss Drive: https://www.blissdrive.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

OTHER RELEVANT PODCASTS:

Unsecured Industrial Loans with Keith McAslan

Industrial Sales: Gigantic Industrial Position!

The post Industrial Leasing Strategies and Benefits with Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Industrial Leasing Strategies and Benefits with Keith McAslan appeared first on Industrial Talk.

Background: Now that we talked about the importance of good credit in a previous Industrial Talk podcast, now let’s focus on getting a business loan for working capital, expansion, inventory, receivables or perhaps payroll if cash is coming in slowly. One item of note is personal credit is not weighted as heavier as the viability of the business for business loans, however having a credit score above 600 is key.

Business Background:

Years in business: 2 years plus

Annual Revenue: $100k plus

Unsecured Business Loans (does not impact personal credit or require a personal guarantee):

Loan Amount ranging from: 50k-500k

Rate starts at 4.99%

Terms:  6 mo, 12mo, 18mo, and up to 5 years

Business Documentation Required:

1. Complete a lending application that includes information about your business
2. Last 2 years business tax returns (all pages must be included)
3. 6 Months of Business bank statements
4. Business Tax License and EIN (If applicable)
5. Articles of Organization,
6. 2 months of recent utilities bill for business
7. Driver License both sides (must be clear and show all corners of the driver’s license – usually a photo using your smartphone is best versus a scan)
8. Social Security Card both sides

Time to Process and Fund:

Typically, once all the information is submitted the application is reviewed and can be closed in 10 days. However, if any information is missing, incomplete or ineligible that will delay the processing and extent the approval time.

Business owners seeking immediate capital to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

OTHER INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

Bliss Drive: https://www.blissdrive.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

OTHER RELEVANT PODCASTS:

Industrial Credit Repair for Securing Capital With Keith McAslan

Industrial Marketing: Standing Out In The Crowd.

The post Unsecured Industrial Loans with Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Unsecured Industrial Loans with Keith McAslan appeared first on Industrial Talk.

Keith McAslan leverages his experience in building and selling businesses and offers his to Industrial business owners on this weeks Industrial Talk Podcast. In this podcast, Keith lays out the tangible steps for improving and maintaining your credit rating. This is the first step, in a 4 part series, to gaining access to capital for expansion and growing your industrial business.

Issue – Industrial business owners must rely on their own credit rating and personal guarantees to access capital from lenders

Problem – Many times the small business owner who has an immediate need for capital due to their circumstances does not have access to traditional money sources. The business owner either has negative credit or their Credit Utilization Ration (CUR) is too high.

What is CUR? – CUR consists of all revolving credit reported on an individual’s credit file. As an example if a credit card has $1000 limit and you have used $400, the CUR is 40% Many time lenders want to see CUR of 20% or less and unsecured lenders will require each individual credit card CUR is below 40%

Three Step Process to Capital we call the Midas Financial Continuum:

• Step 1 – Merchant Cash Advance (MCA) or Modified Merchant Cash Advance – These are simple interest loans with no pre-payment penalties where the small business owner only pays for what they use and time they have it. These loans typically are easy to obtain and can be in amounts up to $100,000
• Step 2 – If the small business owner has a CUR issue as discussed above they can use the funds provided in step 1 from the Merchant Cash Advance to pay down the various revolving credit facilities below the 40% benchmark level. However, if the owners issue is not CUR but negative credit, most lenders will not even look at a damaged credit file depending how many derogatory items there are. The timeframe typically is the past 1-2 years, as after 2 years the relevance is less important. Midas Financial can work with you and credit agencies to remove items typically in 40 banking days or less. Midas has perfected a process over many years in credit repair so their work takes about ten banking days, then the remainder of the time is a waiting game for the credit agencies to record and notify the business owner that the item(s) have been removed.
• Final Step is refinancing – The business owner now has credit restored and needs to refinance the higher priced loans from the MCA and obtain competitively priced growth capital. As we work with the small business owner through this process, Midas will have been working with several lenders and have collected all the necessary documents to provide the growth capital the business owner needs to grow.

Business owners seeking immediate capital to grow their respective businesses and either have no credit issues or have issues we have discussed today need to contact me immediately at keith@midas-financial.com or call me at 303-520-2493.

OTHER INDUSTRIAL RESOURCES:

Safeopedia: https://www.safeopedia.com/

Industrial Marketing:  https://industrialtalk.com/industrial-marketing/

Industrial Academy: https://industrialtalk.com/industrial-academy/

Industrial Dojo: https://industrialtalk.com/industrial_dojo/

YOUR INDUSTRIAL DIGITAL TOOLBOX:

Bliss Drive: https://www.blissdrive.com/

Active Campaign: Active Campaign Link

BombBomb: BombBomb Link

Social Jukebox: https://www.socialjukebox.com/

Other Relevant Podcasts:

EP 040: Interview with Mr. Keith McAslan

Industrial Strategy: That One Thing

The post Industrial Credit Repair for Securing Capital With Keith McAslan appeared first on The Industrial Talk Podcast with Scott MacKenzie.

The post Industrial Credit Repair for Securing Capital With Keith McAslan appeared first on Industrial Talk.