The red phone is blinking at dispatch. A company is unresponsive, and its supporters are concerned. I get the details and my team hops into action. Much like an EMT, we get to our subject quickly and closely to triage. Is the company flatlining or just knocked out? Day one with a company is all about diagnosis. Without a thorough understanding of the situation, you can end up amputating a leg to treat a migraine.
Our patient is propped on the table; we must move swiftly and cautiously. Everything listed below happens simultaneously as our team of experts divide and conquer. Immediately, we need to understand who the players are; so, a careful review of the cap table begins. Most recent term sheets, voting trusts, warrants, subscriptions, convertible securities, and financing documents are all analyzed and taken to task. Carrying on with our assessment, we move to the patient itself.
Quickly we need to determine the status, physically and mentally. We get our hands on everything that speaks to our patient’s health. For the office space, we dig in on the lease and all assets. Then we get to work on the financial health, breaking down the balance sheet, accounts receivable, payroll reports, cash balances, and much more. While our finance experts perform a full-body scan on the economics, our legal gurus identify all pending litigation and open lines of communication with existing legal counsel. Concurrently, our in-house technology geniuses scrutinize the products and services, and our operational team inspects the sales, marketing, and operational strategies. The above speaks highly to the physical condition of our patient, but at Stage Fund we think of the team/employees as the heart and mind of the company.
As we analyze the health of our company, we understand that employees can get nervous about their future. Therefore, we ensure there is a strong human element to our work. Employees are not just line-items and need to be treated as such. On day one, we get a full list of all employees (current and recently laid-off) and contractors. Complete awareness of how all these pieces work together is critical to a solid strategy formulation and implementation.
The subject is still in critical condition, but after day one we have a clear picture of where the bleeding is and how to stop it. We prep the OR and prepare for the work ahead. Our day one is due diligence documentation gathering with the pace of an ER. What follows is hard work and sometimes gory, but my motivation is the health of the patient and its supporters.
Just as all patients deserve a fighting chance, so do all companies. If you have a company in need of resuscitation reach out today!
Daniel J. Frydenlund