“Winning isn’t everything, but it beats anything that comes second.”
Chairman and CEO of Stage Fund, Daniel Frydenlund, not only focuses on assisting in the turnaround of companies, but also assists on a consulting basis. This week Deals and Dealmakers have all eyes on VEER Group. VEER Group is Daniel Frydenlund’s crisis management and restructuring consulting firm that specializes in working with venture-funded companies around the world. VEER Group provides analytical and advisory services to equity owners and lenders of distressed borrowers. They provide crisis management and turnaround services to help their clients overcome complex business challenges.
A Deeper Look
In most cases, shareholders invest their money in various companies that over a certain amount of time, show a return on investment, come close to, or do not show enough value to continue investing. When shareholders do continue investing, however, these fortunate companies are considered to be in the Venture Capitalist’s “Winner’s Circle”. Veer Group is uniquely qualified to help the Shareholders and/or Venture Capitalists better determine which companies belong in the Winner’s Circle. In the same way that VEER Group deciphers whether a company belongs in the Winner’s Circle, before terminating any further investment, VEER Group can step in and help customers decide the value of their companies, cultivates a rescue mission, and provide customers with sound, potent advise; VEER Group takes on an unbiased approach in its review and analysis to ensure capacious success in a timely fashion.
During consultation process, the analysis and duration of crisis management is decided; level one, level two, or level three. Level one engagement lasts between one and two weeks, and there is a review of financial statements, payroll verifications, product service validation, forecasting strategy, and CFBE sustainability with current funding. Level two engagement lasts between three and six weeks and includes everything from level one, with additional services including management team review (current versus what is needed), equity investor support, and technology platforms review and requirement. Level three engagement lasts anywhere between six and eight weeks, being the most intensive of the three, and this engagement includes both level one and two offerings, with added on support consisting of intellectual property analysis, exit opportunities, contract review, customer review (quality and scalability), and liquidation scenarios.
The VEER Group has helped six companies get back on track. In one case study, “Company A” was once one of the largest online and mobile market places for chauffeured transportation, and had sales that exceeded $30M annually. To facilitate expansion and release new product line targeted to business travelers, the company took on significant amounts of debt as well as secured $15 million in total equity funding over several years. The problem with Company A, was waste and abuse that drove decline. Flush with cash, the executive team spent recklessly, made decisions based upon self-interests and lost focus on the changing marketplace dynamics. The rise of ride-sharing companies such as Uber and Lyft intensified competitive pressures and added to the drag on earnings and cash flow. Missing the financial forecasts became a pattern and was a cause for concern for the company’s investors. After multiple periods of declining revenues, mismanaged receivables, a magnitude of operational issues and missed loan payments, the investors lost confidence in the management team.
The VEER Group was brought on board to manage the business through the crisis with limited resources. VEER Group was tasked with quickly identifying the highest priority issues, determining short-term stabilizing solutions, and creating action plans that could be acted upon immediately. Cash flow was the most immediate of all the issues. VEER Group’s biggest challenge was to continue operations while satisfying the short-term debt and operational expenses. VEER Group managed cash flow by forecasting, restructuring obligations, and tightly managing accounts receivable, and the payables. VEER Group analyzed and identified high growth areas, profit improvement opportunities and end-game goal (sale of the company) along with target acquirers.
The VEER Group is actively looking for new clients in the Venture Capital space. Chairman and CEO Daniel Frydenlund of Stage Fund and VEER Group states, “Before defaulting to obtaining more capital, VEER Group formulates a recovery plan. Don’t let Mr. Wonderful say you’re dead. Let us analyze your situation to grow your Winner’s Circle.”