If you are an entrepreneur with a small technology based company looking to take it to the next level, this article should be of particular interest to you. Your natural inclination may be to seek venture capital or private equity to fund your growth. According to Jim Casparie, founder and CEO of the Venture Alliance, the odds of getting Venture funding remain below 3%. Given those odds, the six to nine month process, the heavy, often punishing valuations, the expense of the process, this might not be the best path for you to take. We have created a hybrid M&A model designed to bring the appropriate capital resources to you entrepreneurs. It allows the entrepreneur to bring in smart money and to maintain control. We have taken the experiences of several technology entrepreneurs and combined that with our traditional investment banker Merger and Acquisition approach and crafted a model that both large industry players and the high tech business owners are embracing.

Our experiences in the technology space led us to the conclusion that new product introductions were most efficiently and cost effectively the purview of the smaller, nimble, low overhead companies and not the technology giants. Most of the recent blockbuster products have been the result of an entrepreneurial effort from an early stage company bootstrapping its growth in a very cost conscious lean environment. The big companies, with all their seeming advantages experienced a high failure rate in new product introductions and the losses resulting from this art of capturing the next hot technology were substantial. Don’t get us wrong. There were hundreds of failures from the start-ups as well. However, the failure for the edgy little start-up resulted in losses in the $1 – $5 million range. The same result from an industry giant was often in the $100 million to $250 million range.

For every Google, Ebay, or Salesforce.com, there are literally hundreds of companies that either flame out or never reach a critical mass beyond a loyal early adapter market. It seems like the mentality of these smaller business owners is, using the example of the popular TV show, Deal or No Deal, to hold out for the $1 million briefcase. What about that logical contestant that objectively weighs the facts and the odds and cashes out for $280,000?

As we discussed the dynamics of this market, we were drawn to a merger and acquisition model commonly used by technology bell weather, Cisco Systems, that we felt could also be applied to a broad cross section of companies in the high tech niche. Cisco Systems is a serial acquirer of companies. They do a tremendous amount of R&D and organic product development. They recognize, however, that they cannot possibly capture all the new developments in this rapidly changing field through internal development alone.

Cisco seeks out investments in promising, small, technology companies and this approach has been a key element in their market dominance. They bring what we refer to as smart money to the high tech entrepreneur. They purchase a minority stake in the early stage company with a call option on acquiring the remainder at a later date with an agreed-upon valuation multiple. This structure is a brilliantly elegant method to dramatically enhance the risk reward profile of new product introduction. Here is why:

For the Entrepreneur: (Just substitute in your technology industry giant’s name that is in your category for Cisco below)

1. The involvement of Cisco – resources, market presence, brand, distribution capability is a self fulfilling prophecy to your product’s success.
2. For the same level of dilution that an entrepreneur would get from a VC, angel investor or private equity group, the entrepreneur gets the performance leverage of “smart money.” See #1.
3. The entrepreneur gets to grow his business with Cisco’s support at a far more rapid pace than he could alone. He is more likely to establish the critical mass needed for market leadership within his industry’s brief window of opportunity.
4. He gets an exit strategy with an established valuation metric while the buyer helps him make his exit much more lucrative.
5. As an old Wharton professor used to ask, “What would you rather have, all of a grape or part of a watermelon?” That sums it up pretty well. The involvement of Cisco gives the product a much better probability of growing significantly. The entrepreneur will own a meaningful portion of a far bigger asset.

For the Large Company Investor:

1. Create access to a large funnel of developing technology and products.
2. Creates a very nimble, market sensitive, product development or R&D arm.
3. Minor resource allocation to the autonomous operator during his “skunk works” market proving development stage.
4. Diversify their product development portfolio – because this approach provides for a relatively small investment in a greater number of opportunities fueled by the entrepreneurial spirit, they greatly improve the probability of creating a winner.
5. By investing early and getting an equity position in a small company and favorable valuation metrics on the call option, they pay a fraction of the market price to what they would have to pay if they acquired the company once the product had proven successful.

Let’s use two hypothetical companies to demonstrate this model, Big Green Technologies, and Mobile CRM Systems. Big Green Technologies utilized this model successfully with their investment in Mobile CRM Systems. Big Green Technologies acquired a 25% equity stake in Mobile CRM Systems in 1999 for $4 million. While allowing this entrepreneurial firm to operate autonomously, they backed them with leverage and a modest level of capital resources. Sales exploded and Big Green Technologies exercised their call option on the remaining 75% equity in Mobile CRM Systems in 2004 for $224 million. Sales for Mobile CRM Systems were projected to hit $420 million in 2005.

Given today’s valuation metrics for a company with Mobile CRM Systems’ growth rate and profitability, their market cap is about $1.26 Billion, or 3 times trailing 12 months revenue. Big Green Technologies invested $5 million initially, gave them access to their leverage, and exercised their call option for $224 million. Their effective acquisition price totaling $229 million represents an 82% discount to Mobile CRM Systems’ 2005 market cap.

Big Green Technologies is reaping additional benefits. This acquisition was the catalyst for several additional investments in the mobile computing and content end of the tech industry. These acquisitions have transformed Big Green Technologies from a low growth legacy provider into a Wall Street standout with a growing stable of high margin, high growth brands.

Big Green Technologies’ profits have tripled in four years and the stock price has doubled since 2000, far outpacing the tech industry average. This success has triggered the aggressive introduction of new products and new markets. Not bad for a $5 million bet on a new product in 1999. Wait, let’s not forget about our entrepreneur. His total proceeds of $229 million are a fantastic 5- year result for a little company with 1999 sales of under $20 million.

MidMarket Capital has borrowed this model combining the Cisco hybrid acquisition experience with our investment banking experience to offer this unique Investment Banking service. MMC can either represent the small entrepreneurial firm looking for the “smart money” investment with the appropriate growth partner or the large industry player looking to enhance their new product strategy with this creative approach. This model has successfully served the technology industry through periods of outstanding growth and market value creation. Many of the same dynamics are present today in the high tech industry and these same transaction strutctures can be similarly employed to create value.

href=”http://www.midmarkcap.com/SellerResources.cfm” target=”_blank”>Dave Kauppi is a Merger and Acquisition Advisor and President of MidMarket Capital, representing owners in the sale of privately held businesses. We provide Wall Street style investment banking services to lower mid market companies at a size appropriate fee structure.

If you’re looking for a successful salesperson to hire — a salesperson who not only CAN sell but WILL sell — look for a salesperson with PRIDE.

PRIDE is an acronym for 5 characteristics that will help ensure that the salesperson you hire will get the job done for you and make the revenue results you desire a reality.

PRIDE stands for:

*** Proven
*** Respectful
*** Innovative
*** Decisive
*** Enthusiastic

Proven

Proven refers to the candidate’s track record. Have they delivered results? More importantly, who else says so besides them? As you know, resumes can be fact, or they can be fiction. How can you tell the difference?

A person who has been successful producing results should be able to provide you with third party proof. Have the candidate bring in their sales awards, including plaques, trophies and pictures from the trips they’ve earned. Have them show you the stack-ranked sales reports showing their name at or near the top of the field.

More importantly, what do their customers have to say about them? Can the candidate produce testimonial letters from their customers, indicating they were satisfied with the buying experience? Candidates should be able to furnish written recommendations proving that they were able to deliver tangible results.

Respectful

Salespeople should approach being Respectful from two positions. First, they need to be respectful of others. Careful listeners, these salespeople would never be regarded as pushy because they take the time to hear their prospects out. They keep their egos in check, remembering that everyone can make a valuable contribution in their own way and that other team members deserve respect, too.

Second, your salespeople need to respect themselves. Expect them to have a quiet confidence in their own abilities, and a strong desire to use their time, talents, and skills to produce optimal results. They’ll respect their health, physical needs, and family commitments, and as a result be refreshed, well-balanced, and ready for work each day.

Self-respect allows salespeople to be assertive, ensuring that they won’t allow themselves to be used as a doormat by prospects who want to waste their time or abuse a relationship.

Innovative

An Innovative salesperson is a problem-solver. They’re able to quickly assess a prospect’s situation, and then come up with an approach to help the prospect accomplish their objectives. Reactive salespeople need not apply. Proactive salespeople spontaneously look for ways to do the job better, to improve on past successes, to show better results even faster than before.

Innovative salespeople are easy to manage, because they don’t require instructions. They’re pretty much point and shoot; give them an objective to aim for, and they can creatively approach obstacles and move past them.

Because they are innovative, they tend to look at the world through fresh eyes, and hence have a good sense of humor. A willingness to be playful and funny is a good clue that you’re talking with an innovator. Good news! Your buyers would prefer to do business with someone who can make them chuckle and lighten up their day.

Decisive

A Decisive salesperson can make up their mind. They have effective critical thinking skills that allow them to rapidly size up a situation and decide how to best approach it. Decisiveness is truly important for a salesperson, for how can they expect the buyer to make a decision when they can’t make one themselves?

Decisiveness is often related to owning a clear set of key moral values. It’s easy for salespeople to consistently do the right thing when it’s clear to them what the right thing is. You want decisive salespeople who know when to walk away from a bad deal, and can separate good prospects from the time-wasters.

Enthusiastic

Enthusiastic salespeople have become a cliche for all the wrong reasons. Enthusiasm must be more than an induced rush spawned by a rah-rah motivational pep talk. If you want enthusiasm that lasts, you need to find salespeople who are eager to help your customers.

You want salespeople who are excited about what they do and how they do it, so their curiosity is stimulated and they are inspired to continually learn on their own. Enthusiasm comes from believing that you can make a difference, that you can improve someone’s situation when they do business with you.

Enthusiastic salespeople are motivated when they understand the strategy that will help them succeed, when they have access to all the tools they need to allow them to do their job and serve the customer, and when tactical training is available to allow them to skillfully serve the customer as well as the company. Enthusiastic salespeople have every right to believe they can win. And they do.

Hire a Compete Package

From the salesperson’s perspective, PRIDE is about feeling good about your job. It’s about believing in yourself and your ability to deliver. It’s about enjoying yourself, helping the customer, and making the most of your God-given talents and abilities. It’s about recognizing individual contributions and abilities while respecting the value of the team. When you hire salespeople with PRIDE, you, your salespeople, and your customers all win.

Copyright 2007 Paul Johnson

Paul Johnson works with selling organizations to convert sales trouble into double and triple digit performance breakthroughs. Visit http://ConsultativeSelling.com for a simple definition of Consultative Selling and more sales insights.

Many people dream about the possibility of working from home. This is especially true for those people who feel as though their current employer is holding them back from enjoying life somehow. Working from home certainly can be a wonderful thing, and many people have realized this dream, especially since the Internet has come onto the scene. If you dream of the day whenever you can quit your full-time job and began working for yourself at home then taking the right steps along the way is imperative for you to reach this goal. Here are some of the steps that you should take and some that you should not take.

One of the problems that most people find that makes it difficult for them to begin working from home is that their current job takes too much of their time. If you are working full time and have other responsibilities to consider then it typically does not leave much time in the day to be able to start a new business. That is why you must choose a business opportunity that will allow you to build your success in the time that you have. You would do this by going with a proven system that takes care of all of the work for you. All you should have to do is join the system and allow them to work for you.

One of the great things about working from home is that it will give you the freedom to build your business even further. As you begin to realize your goal of work at home success, you will begin to have additional time that you can put into your business. One of the keys to any successful business venture is that you recycle your time and energies into the opportunity. By choosing wisely whenever you decide which opportunity you are going to sink your self into, it will afford you the time, not only to build your business but also to do the things that you have always wanted to do.

One of the things that you want to avoid is any business startups that will not give you long-term profits. Many of these businesses promise you that they will give you success immediately and some of them may actually deliver on that promise. The problem is that you do not want to build your business on a system that will not be around for the long term. Having money in your hand immediately is a great thing, seeing it go away after a period of time is crushing. Make sure that you don’t begin your work at home business by joining a program that will just cause you to begin an endless cycle of opportunity hopping.

Working from home is more than a dream, it is a reality for those that really want it. If you pursue your dream by following the right leaders, you will certainly find that success can be yours and you can begin living your dream quickly.

Michael Burton: To learn more about the most powerful, automated,turn-key, marketing system on the planet visit http://www.greathomebasebusiness.com