When it’s time for a private company to go public, or the board of directors determines that fundraising is needed on a large scale, an IPO is not the only option. There’s also a less well-known and, until recently, less-well-respected option: a reverse merger into a public shell. It is often called an Alternative Public Offering (APO).
This reverse takeover process, which can be faster and cheaper than a traditional Initial Public Offering, is growing in popularity.
Scott Jordan (no relation to InterimExecs’ CEO Robert Jordan), an investment banker and CFO who spent 30+ years working in biotech, engineered a reverse merger of a biopharma company in 2019. He says that while the coronavirus caused capital flow interruptions, investors in the private markets are still providing capital to companies with novel or scientifically validated biotechnology companies.
That means reverse mergers and PIPEs (Private Investment in a Public Entity) can still raise the money needed to complete their deals. He estimates that about 20 biotech firms debuted in the public markets last year as a result of reverse mergers and the number is on track to repeat in 2020, despite the virus.
How do you know whether an interim executive will be the right fit for your company’s needs? Ultimately, that’s an individual decision that depends on your company. But generally, when we get a call from an executive, head of human resources, small business owner, or private equity investor, it’s because the organization is in motion. Leadership to drive growth, change, or turnaround is needed. And it’s needed fast.
Interim executives, by definition, come into difficult situations, assess them quickly, and create a plan for success. That means they have a front-row seat to the most common business mistakes companies make.
When we surveyed our RED Team interim leaders from around the world for insights into “The Big Mistakes Entrepreneurs Make,” we got an earful. While their responses varied, clear themes emerged in the areas of leadership, operations, human capital, strategy, business finances, and change initiatives.
Focusing on these fundamental business needs is a good starting point for any struggling business.
I once took one of those business simulation courses. In it, we were given a computer terminal, an inbox, and a walkie-talkie. Our simulated company, Acme Widget, was said to be in trouble, and the point of the exercise was to evaluate our crisis management skills. There was a team of psychologists who were looking for leadership and other soft skills that might help us do well during a pressure-filled day.
The fellow who had been chosen as simulated CEO of our team was an up-and-coming executive in a Fortune 100 company. He was clearly acting as CEO in the exercise because his company had indicated he had so much potential.
The psychologists asked the “CEO” to give his motivational speech as the simulation began.
The CEO said, “Our job is to grow revenue faster than expense. Now get to work!”
That was it.
Would it surprise you to hear that Acme Widgets did not survive the simulated crisis? The emails flew, the disasters proliferated, and the team fell apart. I thought then, and I still believe, that the CEO’s speech could have made a big difference in how our team performed.
Scanning someone’s career history, what does it mean when you see the word acting in a title?
The language around interim executives, executives who specialize in growing, transforming and turning around companies can be tricky as executives in the specialty don’t always identify themselves with the same language. But in some cases acting can be another indicator that you have found an interim.
Consider your audience: is the executive being presented to the board of directors, the company at large, or to the general public?
When it comes to public companies, the language is precise and if an executive has temporarily stepped in while a permanent search takes place, they will be described as interim or acting.
Things get confusing because public companies often appoint board members to this interim or acting role who serve as more of a babysitter or placeholder. Beware that this is not the same thing as a career interim who can be identified by their career history taking on high-impact engagement after engagement, helping cause companies to grow or turn around.
The far larger use of interim executives is in private companies worldwide, whether for-profit or nonprofit.
As the incredible success of private equity over the past couple of decades has made clear to many aspiring company owners and investors, if you can find and acquire a decent company, it’s possible to earn great returns. This has fueled a new class of individuals seeking to launch their own search funds. But how to start a search fund that wins at the acquisition game?
This guide to starting a successful search fund answers the questions: What is a search fund? And, How can I start a successful search fund?
We believe talk is cheap, execution is precious and when well done, makes everything sing. Plan execution is why interim executives can be the answer for a company struggling with any sort of transition — from an unplanned vacancy in the C-Suite to unexpected market disruption to the desire to expand to new products, new types of automation, or new parts of the world.
Unlike consultants who come in, assess the situation, develop a strategic plan and leave, interim leaders understand that their job is to shine in the execution phase. Interims are experts at transforming organizations, leading companies through challenges that must be solved to survive and thrive.
Interims approach project objectives using a framework that has them Assess, Plan, and Execute (APE) repeatedly, revising approaches based on the client’s most pressing needs.
Great strategies often fail as a result of poor execution and, at the same time, great execution cannot save a truly poor business strategy.
Even great organizations can struggle due to the limitations of their thinking or approaches. The existing leadership team may fail to plan, execute, measure, and refine business goals as the company grows and faces the tough headwinds of a competitive marketplace.
Decision-making gives way to “analysis paralysis” as the team contemplates large-scale change with very high stakes. The longer this cycle continues, the harder change becomes.
Here we take a deep dive into the most common reasons business strategies fail and how to fix them with the help of interim executives who bring a unique combination of strategy and execution.
First-year Change Agent members have access to the Interim Institute’s 4 hour audio program on the Fundamentals of Interim Management, and a one-hour strategy session to help jumpstart their interim career.
*$200 additional charge for Accelerator Program only applies for first-year members. After the first year, membership renews at $485/year.
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