November 19, 2025
The Math Everyone Ignores Every transaction advisor—lawyers, bankers, accountants, brokers—tells you the same thing: clean up your financials, document operations, fill gaps in the team, build systems so the business runs without your 70-hour weeks. The problem? Every advisor will...
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November 7, 2025
We’re expanding our toolkit for business owners who need more than platitudes. First up: Exit Readiness is for owners aiming to sell in 12–24 months. Not the “tidy up your financials” advice or a to-do list you can get everywhere...
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April 5, 2025
People still want a chance to cheat the middle-class investor. I was annoyed to see this letter to the editor in the WSJ, whining about “paternalism” and the accredited investor rule. For those new to the question, here’s what I...
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July 19, 2024
Viable, Valuable, and Investable Our co-founder, Mike Princi, coined this triplet years ago. He used it as a shorthand to remind people that new businesses, whether tech-style startups, corporate carveouts, or IP commercialization attempts, have to satisfy all three of...
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February 24, 2020
The Freakonomics authors wrote an interesting post describing the hidden cost of multitasking. The interesting point is the idea that focusing rather than juggling doesn’t speed up the last thing to get done but does get the first thing done...
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February 17, 2020
Remember that there’s a difference between a great product, a great company, a great business, and a great investment. Depending on who you are and where you’re sitting at the table, you will need a different one of these at...
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February 17, 2020
I wrote this tweet in 2013, after seeing the McKinsey article on digging into details. Disaggregate data – take per-segment => per-customer analysis. @McKinsey catches up with @maprinci circa 2007 http://t.co/vi4bsVbCdS — rickcolosimo (@rickcolosimo) December 5, 2013 The world has...
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March 13, 2018
I just read Ken Adam’s post on AI review of legal documents. In the case of services that offer contract templates, if I don’t know who prepared a template, I’m not going to trust it. Even if I do know,...
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February 7, 2017
Every now and then someone who has an idea for a company or a product will ask me, “Do I really need a business plan?” I guess they read about seemingly ethereal companies raising huge equity rounds at mind-boggling valuations...
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February 4, 2017
I was at a presentation recently on M&A exits for business owners. The question of earnouts came up, but although the panel was generally well-informed (I work for one of them, the managing partner of my firm, and with another,...
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May 10, 2016
Building on the startup-oriented tools that Rick has published on his startup law website, we’ve created a simplified valuation framework for you. We’ve extracted this tool from financial models and valuations we’ve built for clients over the years. The multiples...
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March 2, 2016
Too much runway, and you may never take off. Here’s the write-up I saw in the Next Draft newsletter (hey there, Dave!) that pointed me to a story about Slack’s then-recent venture financing: Give me some slack … equity. The...
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February 25, 2016
At one point years ago, my business partner and I were discussing how the arbitrator costs for a month of pre-hearing activity was 1/3 of our original out of pocket claim. What is the “deductible” on business claims? How expensive...
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May 12, 2015
Here’s a quote about a program by Habitat for Humanity to try to get better results for people: By betting big on property in a down market, and with the help of a donor network, the group is creating Habitat...
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May 5, 2015
There are plenty of examples where companies and government units borrow from their future in different ways. There are very different issues for the two actors, so we’ll split this into two posts: this one on companies and another future...
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August 7, 2013
We’re continually amazed by the plethora of articles in newspapers and financial magazines that trudge over old ground, or what we thought was old ground. Short example, before we get to the article: why do otherwise wise-seeming publications continue to...
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May 1, 2013
I’ve been reading too much about some fundamentally misguided corporate governance notions from Cornell Law School professor Lynn Stout. Maybe it’s the author of the piece trying to make something out of nothing, but the article reads as if Prof....
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April 26, 2013
Following the recent hullabaloo about some seemingly simplistic spreadsheet errors in a recent study, many articles have decried the pervasive nature of spreadsheet errors. What we’ve found though, is that just as typos are the not the biggest problem with written...
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April 2, 2013
Today is World Autism Awareness day. My Facebook profile picture is my 8yo son Dylan, showing you, and me, what he thinks of autism. I imagine it’s something along the lines of “I just want to do what I want...
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January 17, 2013
How do you know when you should change your business or keep doing things the same way? Applying two principles, Security and Economy of Force, will help you determine what type of problem you’re facing before you decide how to...
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July 12, 2012
A recent Forbes article describes the alternative fee problem, how to reasonably price legal fees using something other than an hourly basis, as a potential application of big data analysis. Conveniently, we said this over three years ago in describing...
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June 26, 2012
The industry group for public company directors, the NACD, recently announced that they’re producing a guide to compensation structures to help connect pay to performance. The purpose is apparently to guide corporate directors, in part because directors on compensation committees...
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June 8, 2012
A founder recently asked about how much money to raise and when. Specifically, he asks about choosing between splitting a $1.4m, two-year round into $800k for year 1 and then $600k for year 2. The key issue in splitting rounds...
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May 28, 2012
We wrote a while ago about the nine principles of war. While our book is in progress, and reaching the next phase of development, we wanted to share a slightly different piece we did on the principle of Objective. This...
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May 13, 2011
Springwise recently posted about a group buying site, this time from India, that actually has a new twist: real estate. This model is a good idea for tenant-in-common real estate deals, where you could sell a small commercial office building...
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February 16, 2011
Here’s a brief quote from an interview with an entrepreneur turned angel investor about types of startup risk: Angels will largely take a product risk (they bet on the product or idea and your ability to build it). “A” round...
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February 4, 2011
Dear NY Times, Please stop writing about corporate finance. Nobody who worked on this article appears to know anything about securities laws, corporate finance, reasons companies go public, or how to read past issues of this paper. Securities laws: Facebook...
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February 3, 2011
Although the mind instinctively rejects all needless complexity, we shall greatly err if we fail to recognize the fact that what the mind recoils from is not the complexity, but the needlessness. G.H. Lewes, “Simplicity,” in Foundations of English Style...
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February 1, 2011
Fred Wilson has had a series of posts relating to M&A transactions, generally revolving around case studies. This one on ChiliSoft describes how certain features embedded in the capitalization table (liquidation preferences and floating price warrants), coupled with being acquired...
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December 20, 2010
Answer: it becomes regular useless information, arbitraged away by the market. (Unless you don’t believe in the efficient market hypothesis, in which case you’re reading the wrong blog! The only way to live in between those two things is to...
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November 21, 2010
This WSJ article describes the potential fallout to nonprofit organizations from projected changes in tax rates. If personal income tax rates are going to increase, then, as the article states, it make sense to defer donations until the years when...
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November 11, 2010
Our first principle to convert from military to mainstream business usage is Mass. Here’s the original: Mass – Concentrate combat power at the decisive place and time What mass means from the military perspective is that you bring together whatever...
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November 11, 2010
Today is a day I treat much like Memorial Day, with the difference that I’m not uncomfortable about receiving greetings today. (Memorial Day is for fallen servicemembers; I’m not in that category nor have I been in harm’s way. Many...
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October 12, 2010
A colleague recently asked us about finance and money tips for small businesses. Since we spend a huge amount of time analyzing very large companies from the perspective of the equity markets, it might seem that the lessons we teach...
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October 9, 2010
Fred Wilson of Union Square Ventures has a recent short post on two kinds of people: takers and makers. Takers make their money by taking from others. They are usually bad business people and their careers often end in failure....
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October 7, 2010
Where TSC has become involved in the detailed analysis of investment portfolios, we’ve chosen to focus on the massive amount of data that is in fact sitting on the books of financial advisors, rather than on broad market segments standing...
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October 7, 2010
The NYT displayed some confusion about finance realities in this older column about net operating losses, a perennial “favorite” topic of ours. We’ve done some complex planning (aka invent new deal structures) for a corporation and its shareholders that held...
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September 23, 2010
This finance link post from the team at 37Signals briefly compares Apple’s share of the mobile phone market (apparently by volume) with its share of the profits in that market: Market share is irrelevant if you can’t turn it into...
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September 5, 2010
Someone recently asked about the cost for a valuation. As with many questions we hear, this one also has to be answered with a question: why do you need a valuation? And that, in turn, is really better framed as...
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August 9, 2010
Here’s a recent post by Rick Colosimo in the Five-Minute General Counsel series on due diligence, with an even shorter short form due diligence request list than our own investor-based due diligence list. One question we haven’t answered here yet...
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August 8, 2010
I’ve often thought that there are two kinds of businesses: those that make money from providing more value to customers, and those that make money from providing less value to their customers. This brief article describes 5 grocery store ripoffs....
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May 6, 2010
My pal Rex just posted about teamwork, in the literal sense, over at Grootship. This struck me because the notion of having a ranger buddy was drilled into us in countless ways during Ranger School, not the least of which...
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April 12, 2010
Here is another quote that has often been paraphrased, and the recursive nature of that concept is particularly appealing in this context: It can scarcely be denied that the supreme goal of all theory is to make the irreducible basic...
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December 5, 2009
This WSJ article on identifying and analyzing mutual funds is interesting because of what’s not there. The article describes a new study by Fama and French, the prolific finance authors who continue to study the efficient market hypothesis and the...
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November 11, 2009
This recent memo from the president of Guidestar.org moved way beyond the typical self-congratulatory non-news and sales announcements and started off with a bang: start with these two simple and profound questions: what is your organization’s mission and how are...
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June 16, 2009
We recently wrote about alternative fee structures for large law firms and their clients. A post from the WSJ law blog on Kirkland & Ellis’s foray into the field recognizes a point we’ve made before: some companies (and indeed, most...
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June 9, 2009
Just recently, we published another post regarding stock buybacks and how the math is the math: you can change your risk profile, but in any case, at some point the usage of cash to buy stock makes sense as a...
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June 2, 2009
[NB: this post was started quite some time ago, and it recently re-surfaced in our ‘drafts’ folder. Sorry for the delay, but we believe that the underlying issues are still interesting and how companies use cash is more, not less,...
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April 2, 2009
Now that Rim is adding its own app store, titled “App World,” we’re renewing and increasing our earlier software bounty for a tool (plugin/patch/hack) that allows users of hosted BES to enable automatic BCC’ing of any address. Our original post...
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March 27, 2009
(NB: This is a revised repost from Rick’s blog. We realized it might be helpful here.) This recent Seth Godin post was another timely suggestion from him. He seems to really have a finger on the pulse of what is...
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March 24, 2009
This short summary notes that IRC Section 409Ais now effective (actually as of January 1, 2009). While there are number of well-known types of deferred compensation that are subject to 409A, there is one area where the exact application of...
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February 23, 2009
Net operating losses, or NOLs, accumulate when a business has tax losses in a given year rather than profits. They are typically carried back to earlier profits but may be accumulated in as carry-forwards for up to 20 years. Sirius,...
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February 9, 2009
Footnoted, a regular read for us, recently found some great references to intra-board conflict resolution, or the lack thereof. This memo by director Thomas Hallagan explains several of the reasons he decided to leave the board of Amerisafe at the...
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January 31, 2009
We are redesigning our site to improve our communications with you: our clients, our prospects, our market. Please share your thoughts with us in the comments.
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January 28, 2009
Most valuations follow a traditional pathway, with only slight differences between public and private companies: 1. Determine a valuation range based on the values of comparable public companies 2. Determine a valuation range based on the values revealed by transactions...
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January 21, 2009
Since I’ve been involved in the legal profession — fifteen years now — firms and general counsel have been talking about alternative fee structures. The failings of the billable hour system as well as the reasons for its persistence in...
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January 21, 2009
We’ve written before about decisiveness, the skill of being able to make decisions quickly, particularly in an environment of uncertainty and obviously incomplete information. Recognizing that not only will you never have access to complete information that is also completely...
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January 19, 2009
In both my past as a corporate lawyer and as a strategic advisor, I often find myself drawing deal diagrams for a variety of parties. Even among those familiar with deal diagrams, I have not found any great uniformity in...
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January 19, 2009
For some time now, we’ve been working with a senior retired banker from Lazard who is on our board of advisers. We essentially hired him to be our boss, in terms of helping us with strategic decisions, setting priorities, and...
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December 9, 2008
When we start discussing our heavy usage of weighted averages with customers, we sometimes get a questioning look, until we make the analysis more concrete for them. People are very familiar with using averages; equity analysts regularly look at numbers...
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December 6, 2008
There is an interesting Forbes article by John Bogle in the November 17 issue. To summarize, Bogle determined that in a recent year, the “financial services” industry effectively took $620 billion off the top for a 7% fee on $9.5...
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November 24, 2008
We are often approached by small businesses that are seeking capital in connection with strategic and operational advice. For anyone corresponding with us, or frankly for anyone starting to get a handle on an existing business, here’s a short due...
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November 1, 2008
The WSj recently published an article regarding the prospects of asking/demanding that political candidates or prospective CEOs release DNA sequence information. For us, even though data-driven analysis is the first phase in our business leadership process (Data-Driven Analytics (DDA), Informed...
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October 24, 2008
A recent PLI newsletter article referenced an idea of measuring legal department spending in terms of $0.xx/share. The editor notes, correctly in our opinion, that the per-share measure is likely to be unsuitable over the long-term because share numbers change...
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October 6, 2008
This article from the 2001 Nobel laureate in economics is a concise and cogent description of the courses of action re: the bailout. We’re pleased to see that someone is talking about the need for quality due diligence and the...
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October 2, 2008
Wanted: a work-for-hire (so it can be released under a CC license for non-commercial use, exact license TBD) software “widget” that, at a minimum, works on a GSM Blackberry Pearl (AT&T) using Hosted BES from Intermedia. Feature: allows for an...
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October 1, 2008
Larry Ribstein, who’s a law professor and pretty focused on corporate governance generally, just described the bailout in some pretty straightforward terms. WARNING: we are not typically focused on macroeconomics except in scenario planning. However, we see strong tendrils of...
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September 21, 2008
We generally subscribe to the theory that commercial contracts are about allocation of risk in a transaction. Dealbook today writes about a clause in the Merrill Lynch / Bank of America merger agreement. Here’s the clause: “(c) No investigation by...
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August 24, 2008
“There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.” via. This expands on one of Mike’s favorite sayings to use with clients: “the unaimed arrow...
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June 24, 2008
In this article, David Allen of GTD fame discusses the office hardware that supports his implementation of GTD. And by hardware, I don’t mean computers, I mean the aluminum, wood, and plastic contraptions and tools that populate our offices, that...
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June 2, 2008
We thought we’d get two short posts out together rather than torture them into longer posts. Chairman/CEO split. A Breakingviews.com piece published in the WSJ’s May 10-11 Weekend Edition described Wachovia’s recent split of the Chairman and CEO roles. Appparently,...
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May 15, 2008
A few pieces are detailing Carl Icahn’s foray into Yahoo and his decision to take up the proxy fight Microsoft appears to have abandoned. This Dealbook article gets my vote today because of this quote from Icahn: It is unconscionable...
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May 13, 2008
In OCS (for Rick) and at West Point (for Mike), we were both tasked with learning bits of “required knowledge.” These were bits of useful or historical information, such as lifesaving steps or MacArthur’s Duty, Honor, Country quote, or mnemonics...
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April 8, 2008
This Forbes article sets forth an interesting analysis on some factors that might impact the pricing of a Microsoft-Yahoo deal. The basic premise is that since many shareholders of one company are [likely] shareholders of the other, these cross-holdings necessarily...
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March 25, 2008
Our first principle to convert from military to mainstream business usage is Mass. Here’s the original: Mass – Concentrate combat power at the decisive place and time What mass means from the military perspective is that you bring together whatever...
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March 11, 2008
This article & discussion from Lifehacker.com includes an excerpt from a new book, CrazyBusy. The author, in that excerpt, talks about how we often get entangled today by a desire to have all the data before we make a decision....
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February 25, 2008
Most people approaching middle age from well-to-do families or with professional careers are looking forward to a time when they can make themselves independently wealthy: having enough money, in your control, to create passive income sufficient to meet your needs....
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February 24, 2008
The linked article from the New York Times purports to reveal how hedge fund managers are profiting from inside information (the term of art is “material nonpublic information”). In this case, the secrets refer to pending PIPES (private investment in...
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February 9, 2008
The linked article from the NY Times argues that Microsoft’s offer to buy Yahoo signals Microsoft’s failure in growing a profitable, competitive online business organically. This might be true to the extent that Google is unmistakably the biggest dog in...
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February 9, 2008
A number of stories since the Microsoft bid have discussed what Yahoo might do to avoid Microsoft’s offer. Too few stories have explored what Yahoo actually has to do: the board’s fiduciary duties require it to maximize shareholder value. Anything...
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February 4, 2008
The big news on Friday was Microsoft’s bear hug letter to Yahoo’s board. The news was announced before market open on Friday, and the >60% premium in Microsoft’s offer was quickly arbitraged away, leaving a much smaller spread (<10%) Wired...
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January 8, 2008
Our two previous posts on the effects of long hours on errors and reduced productivity focused on two professions, doctors and lawyers. We picked those two rather than further explore the issue in the military because long hours for doctors...
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January 6, 2008
This is the second in our series of three posts relating to the idea that long hours, substantially over 40 hours per week, lead to reduced cognitive function and poor performance, most notably lower productivity per unit of time. Our...
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January 5, 2008
The IGDA is the International Game Developers Association, which includes all those people who create videogames, from programmers to testers to artists and many, many more. The linked article is a quasi-response to another post in which someone said to...
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January 3, 2008
“In preparing for battle I have always found that plans are useless, but planning is indispensable.” We use this phrase a lot in two contexts: first, we freely admit, and accept, that our plans may not work out as expected,...
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January 3, 2008
Well, the time to start an organization related to “charity ratings” in any way: not right now. GiveWell, mentioned in an earlier post, has admitted to astroturfing charges. (Astroturfing is when you pretend that there’s a grassroots supporters of your...
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January 1, 2008
In refining our vision for the Wolfhound Fund, we’ve come across different ideas that are relevant to our plans but don’t capture the entire idea. In this post, we’ll discuss some other approaches, but note that we will not go...
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December 31, 2007
Cerberus Capital, a well-known private equity fund, recently won a short trial in the Delaware Chancery Court allowing it to terminate its acquisition agreement with United Rentals and pay the $100 million termination fee set forth in the contract. The...
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December 31, 2007
Michael Princi and Rick Colosimo announce the founding of The Wolfhound Fund, a nonprofit entity, whose mission is to help nonprofits and their officers and directors with increasing the returns on the social capital invested in and by the organization....
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December 23, 2007
We see (and get) emails like this all the time (NB: one of us is a former practicing corporate lawyer): Subject: Looking for good business attorneyI just started at a small XYZ firm/company and am looking for a referral to...
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May 16, 2007
We recently came across this brief interview from a “political philosopher.” Of course, that’s not going to mix well with our nothing-but-the-fundamentals view of business and achieving goals. (We tend to leave the philosophy for the goal-setting.) In brief, the...
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March 29, 2006
Geoffrey Colvin, the star of our last post, is once again delivering basic finance concepts to the masses in his all-too-short article on the AT&T- BellSouth merger. Believe us, basic is the level that many corporate finance & management teams...
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March 6, 2006
A recent Fortune article by Geoffrey Colvin discusses the relatively low percentage of debt in the capital structure of a large percentage of US public companies (he cites that “25% of the Russell 3000 have no debt or negative debt”)....
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March 9, 2004
NVCA Model Financing Documents
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September 22, 2003
WSJ.com – Real Time: “Friendster has various community-related plans to make money off the network. But we can see some other applications. For instance, Friendster could license its service to law enforcement. Forget the photos pinned on the corkboard: Just...
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September 2, 2003
Techdirt:Should You Sell Your Personal Data?
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August 14, 2003
Schofield’s Definition of Discipline The discipline that makes the soldiers of a free country reliable in battle is not to be gained by harsh or tyrannical treatment. On the contrary, such treatment is far more likely to destroy than to...
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August 14, 2003
WPI Military Science: 9 Principles of War: “9 Principles of War The nine Principles of War, as defined in the Army Field Manual FM-3 Military Operations: PRINCIPLEDEFINITION Mass Concentrate combat power at the decisive place and time Objective Direct every...
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August 14, 2003
Another quote that has stayed with us since the days of required knowledge at USMA and OCS: “Duty,” “Honor,” “Country”—those three hallowed words reverently dictate what you ought to be, what you can be, what you will be. They are...
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August 14, 2003
Troop Leading Procedure: 1. RECEIVE MISSION 2. ISSUE WARNORD 3. MAKE TENTATIVE PLAN 4. INITIATE MOVEMENT 5. CONDUCT RECONNAISSANCE 6. COMPLETE PLAN 7. ISSUE OPORD 8. SUPERVISE
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