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CONTENTS July • August 2019 • Vol. 18 No. 4 • www.upsizemag.com
PAGE 14
Cover story
Staving off cybersecurity threats: Large businesses that get breached make the news, but small businesses are frequent targets and if those companies get hit, they often don’t survive. Learn tips that can help you avoid getting victimized. BY ANDREW TELLIJOHN Cover photograph by Tom Dunn
PAGE 4
Bb BUSINESS BUILDERS
PAGE 22
Editor Beth Ewen shares customer service stories stemming from her recent move. Would your business meet her standards?
PAGE 6
PAGE 4
by Jon Schindel, SeilerSchindel PLLC
Biolyst Inc. CEO Phil Walter talks about the lessons learned and steps taken the last few years that have this peripheral neuropathy treatment company on the brink of growth.
Who’s who at Upsize magazine, and how to reach us.
PAGE 10
PAGE 28
Planning through fast growth is vital for maximizing the benefits.
The Minnesota Department of Employment and Economic Development worked with the Legislature to create Launch Minnesota, which aims to help start-ups with training, funding and other services.
From the editor:
Staff list:
Upsize Minnesota (USPS 024-029) is published bi-monthly for $20 by Upsize Minnesota, 3033 Excelsior Blvd, Suite 10, Minneapolis, MN 55416. Periodicals postage paid at St Paul, MN and additional mailing offices. Postmaster: Send address changes to Upsize Minnesota, 3033 Excelsior Blvd., Suite 10, Minneapolis, MN 55416
LAW
What to do and what not to when you get sued.
MANAGEMENT by Tom Siders, L. Harris Partners
PAGE 12
PLANNING Make sure your financial planner always has your best interests in mind. by Kim Brown, JNBA Financial Advisors
PAGE 18
WORKSHOP: An expert panel discusses what makes mergers work, why many fail and what you should look for to make sure your transaction goes the way you hope.
CATCHING UP:
BACK PAGE:
Planning now means peace of mind later.
What happens if… THE ECONOMY WEAKENS
RETIREMENT LOOKS VERY TEMPTING…
A DIVORCE OCCURS IN THE FAMILY
YOU DESIRE A CHANGE IN LIFESTYLE
YOUR KID DOESN’T WANT TO RUN THE BUSINESS
THERE’S AN UNEXPECTED HEALTH ISSUE
YOUR BUSINESS PARTNER WANTS TO SELL
CK&Co. can help you proactively prepare your transition with our 4-step action plan. Visit us at lp.ckco-cpa.com/upsize to learn more.
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PUBLISHER
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UPSIZE JULY • AUGUST 2019
When it started raining in my dining room, I hit a new low in what I’ll euphemistically call my adventures in moving. Only now can I write about the experience, it was that morale-busting. But as all things in a journalist’s career, life equals copy, so I’ll share what I learned the hard way about customer service. I’ll call it the life-saving, the meh and the deplorable. I suggest all business owners could benefit from a similar reality tour of their companies. By selling our commercial-grade snow blower last December, right before putting our house up for sale, we woke the snow gods. They laughed. Then they walloped Minneapolis/St. Paul with the snowpocalypse. Our hand-shoveled sidewalks dwindled to a four-inch path flanked by six-foot-high rock-hard drifts. The Grounds Guys franchisees in the Twin Cities were no longer in business. Several independent services said they didn’t shovel public sidewalks in Minneapolis. (Huh?) Finally an app called Lawn Love with a North Carolina phone line sent two young men to shovel one Saturday morning. Finding a shoveling service in January was harder than buying a swimsuit in July, which seems to me like an opportunity. Next came the water pouring into my dining room, as mentioned above, in March, as the snow on the roof began to thaw. I called a half-dozen companies at 6:30 a.m., including the Ice Dam Guys. That owner called me back in 20 minutes (the others had a full inbox or never called at all), had a technician on my roof by 9:30 and the problem solved by mid-afternoon. Mold and asbestos came next, at least the suspicion of it. The local AdvantaClean office had a sophisticated call center with prompt responses, which I found was not the norm with many companies. But the estimator was overly alarmist and under-certified. I would need to hire a second, separate person to check for asbestos in the ceiling tiles a third to test for mold before and after.
Instead, ShelterTech promptly sent over a technician to estimate and bid the whole job and then brought in a crew large enough to do the mitigation in one day. The lesson for home restoration firms: Beef up your call centers with knowledgeable, friendly people and add certifications so customers can get related problems done in one swoop. Next came moving. Though I’d been warned against hiring a broker, when an actual human called me back to give a bid, I went with Cross Country Movers because everyone else responded with robo-calls. The initial bid ultimately more than doubled, which the driver for Xpress Professional Movers said was typical— bids over the phone are never accurate. I should have gone with Two Men and a Truck, which will bid jobs in person, or another such firm. Finally there was the cleaning service I hired, Dynamic Duo Cleaning, which turned the old customer service adage on its head. First I balked at leaving a pile of cash for the cleaners when I checked my bank account and saw the fee had already been debited. Then I complained when photos from my realtor showed only two rooms had been cleaned. One of the co-owners called the condition of my house “deplorable,” said it was my fault she had estimated the job too low, and completed the trifecta of insults with this: “You were a problem customer at the time of payment and you’re a problem customer now.” In this case, the customer was always wrong. The bottom line: all businesses talk about caring for customers, but only a few follow through. To them I am grateful. Would yours pass a reality check? Beth Ewen Editor and co-founder Upsize Minnesota bewen@upsizemag.com
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PHOTO BY JONATHAN HANKIN
always wrong
law
BUSINESS BUILDERS
How to react when you’ve been sued by Jon Schindel
TIPS 1. Don’t panic. Being sued is unpleasant, but likely not a threat to the existence of your business. 2. Don’t contact the person suing you. Reach out to your lawyer and make a deliberate plan. 3. Respond in a timely manner. You can’t win a lawsuit in your Answer, but not filing an Answer with the courts will ensure a loss. 4. Resist the urge to fudge the truth. The best way to avoid surprises is be honest from the start. 5. Find a corporate attorney before you need one. It’s better to know the person from whom you will be receiving advice before you actually need it.
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You run a small business. You open your storefront one day to find a nondescript man waiting. He asks your name and hands you an envelope. The envelope is filled with official looking papers — one of which announces in capitalized, bold letters: YOU HAVE BEEN SUED. Your stomach sinks, you sit down and read. You are able to decipher that a former disgruntled employee has alleged that you fired him based on discrimination and that your business was a hostile work environment. You recall the man, he was consistently late for his shift, he performed poorly and he did not get along with other employees. He was fired after several warnings about his conduct. Your mind races as you think about how this will reflect on your business and about how angry you are that anyone would dare say you have a hostile work environment. You panic about what to do next. This article is meant to provide you with some crib notes as to what you should (and should not) do if you are sued. Don’t Panic This is easier said than done. If you are in business, you accept risk every day and, while being served with a lawsuit is very unpleasant, it is really not the end of the world, and it’s likely not a threat to the existence of your business. Many small business owners, who are used to wearing multiple hats, try to take care of a lawsuit by themselves. The knee-jerk reaction to simply call the person who sued you directly and tell them why they are wrong is not a good move. The
right move is to take a deep breath and call your attorney. He or she will likely ask you to send them the documents and schedule a meeting to talk about the events described in the lawsuit (which may or may not have actually happened). Lawsuits, like many other things, should be met with a well thought out, deliberate plan. Don’t panic but do get your attorney involved quickly. When you get sued you will be served with a Summons and Complaint. It will provide the deadline for responding to the lawsuit and will lay out the allegations against your company. In most Minnesota cases you will have 20 days to provide a formal response to the lawsuit. This is called an “answer.” If you do not serve that answer within 20 days you expose yourself to the very real danger that a court will simply award what is requested in the lawsuit. The sooner you get an attorney involved the more time you will have to provide a thoughtful answer AND be able to look at options for you to return the favor by making your own claims against the person that sued you. You will not win or lose the lawsuit based on your answer or counter claims but you will lose the lawsuit if you do not respond. Be Honest Throughout a lawsuit you will have many opportunities to fudge the truth. Resist this urge! The best way to make sure there are no surprises is to be honest from the get-go. Attorneys know that lawsuits are rarely a slam dunk and any attorney worth his or her salt would rather know the
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The higher your net worth, the higher your anxiety index may soar. Complexities multiply. More variables come into play. At times like these, whose advice do you value most? The team who looks out for your needs, and your needs alone. Who champions for you, every day. Who provides a continuous, comprehensive, and coordinated approach to wealth management and mentors your money through every mile of your journey. We call that advice driven by advocacy. We believe you’ll call it “irreplaceable.”
President JNBA Financial Advisors
MINNEAPOLIS: 952.844.0995 | DULUTH: 218.249.0044 | JNBA.COM Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by JNBA Financial Advisors, Inc. (“JNBA”), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request. The scope of the services to be provided depends upon the needs of the client and the terms of the engagement. Please see important disclosure information at www.jnba.com/disclosure.
warts of a case up front, rather than pretend they don’t exist. Part of the process of a lawsuit is called “discovery.” It is the process where each of the parties gets to take depositions and request relevant documents and statements from the other side. It is also the lawsuit’s most expensive phase. You do not get to pick and choose what you send to the other side or say during a deposition; doing so can lead to monetary sanctions. And, having represented parties in hundreds of lawsuits, the truth always comes out. If your attorney knows about a piece of evidence that will hurt your case ahead of time, he or she can develop a strategy to minimize the damage. It is a bad idea to let your attorney get caught off guard by a fact that hurts your case. Be honest with your attorney so that he or she can fully develop a strategy for the lawsuit. Settlement In Minnesota, alternative dispute resolution is required in all cases. In most cases, that means hiring a mediator who works with the parties to try and find a solution that avoids the costs of a trial. Mediation is a great process for several reasons: 1) you will hear the mediator’s honest opinion of your case; 2) the other side will hear the mediator’s honest opinion of his or her case; 3) the mediator and your attorney can talk to you about making a business decision and resolving the case; and 4) settling is a way for YOU to decide how the case ends instead of a judge or jury who may have their own agendas or biases. Typically, when both sides walk away from a settlement unhappy it was a good settlement. Everyone has to give a little bit too much away.
Expect the Best! Lawsuits are not set-it-andforget-it. Adequate representation requires near constant communication between an attorney and client. You have every right to know what is going on every step of the way. Far too many clients ask far too few questions during the process. If you are not getting adequate answers or your attorney fails to respond to your phone calls or emails, talk to a different attorney. You are paying your attorney to advocate for you; you are the customer. In business it is not a question of if you will be involved in a lawsuit, it is a question of when. There is no sugar-coating it. Lawsuits are a major irritant and they will distract you from your best and highest purpose at your company. They can be a drain on the company’s energy and finances but, unfortunately, it is a risk you take on as a business owner. If you don’t have a corporate attorney who also has litigation experience do not be shy about asking your fellow entrepreneurs who they use. It is better to know who you will seek advice from before you encounter a lawsuit than to have to make a hasty decision under the pressure of a deadline. Lawsuits fall under the adage “this too shall pass,” but the more prepared you are the faster you can make that happen.
“In business it is not a question of if you will be involved in a lawsuit, it is a question of when.“ Jon Schindel SeilerSchindel PLLC
Jon Schindel is a partner with SeilerSchindel PLLC: 952.358.7406; jschindel@seilerschindel.com; www.seilerschindel.com.
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SAVE THE DATE! Thursday, October 10, 2019 7:30 AM - 3:00 PM More information and registration acg.org/ownersforum or call 612-590-1041
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management
BUSINESS BUILDERS
The importance of planning during rapid growth by Tom Siders
TIPS 1. When your business starts to grow, consider what might go wrong and make plans for what will happen when things don’t go as intended. 2. Consider hiring a capable copilot or two for your management team who have been through a high-altitude environment before. 3. Keep realistic cash flow projections and get to know a good banker to assure you have enough fuel to actually get to your destination. 4. Top-line revenue growth doesn’t tell the whole story. Is the value of your business also growing or are you just churning more dollars? 5. Develop, document, and continually improve business systems that generate recurring revenue, even in periods of rapid growth.
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THOMAS EDISON ONCE SAID, “Good fortune is what happens when opportunity meets planning.” Consider how much planning it takes to commute from your office to your home on a clear Sunday afternoon. Not much, if any. You know the route from memory and Sunday afternoon traffic isn’t so bad. You could almost make the drive in your sleep. Now consider how much planning and attention to detail is required to fly a private aircraft from here to a remote airport in rural Georgia. Different story, right? Do you have a pilot’s license? Have you ever flown to a remote rural airstrip in Georgia? For this trip, let’s assume your family is on board and your entire net worth is at risk for completing the flight safely. With so much at stake, most of us would study, plan, plan again, and consider every possible contingency — weather, mechanical, refueling, route, etc. In short, we would plan for every contingency. Given the risk and stakes involved, I would ensure I have a very capable co-pilot (who has accomplished similar flights before) in the event I need help along the way. I would learn the purpose of each of those airplane instruments and what they tell me — air speed, altitude, attitude, range, oil pressure, etc. I would plan out and monitor every step of the journey. It’s no different when planning and managing a business in a period of rapid growth. Everything is on the line. You simply have to plan. You should consider what might go wrong and what you will do in the event things aren’t going as originally intended. And remember those gauges on an airplane? You need the same for your business. You must measure and
monitor your actual data to know if you are on course. You need an accurate dashboard that gives you timely information. You should consider hiring a capable co-pilot or two (management team) who have been through a high-altitude environment before. Oh, and yes, realistic cash flow projections as well as a good banker to assure you have enough fuel to actually get to your destination. Ultimately, a disciplined process of planning and regularly reviewing your execution of that plan will help you stay on a high-growth course. A business owner who can demonstrate a track record of planning the work and working the plan is much more likely to eventually get top dollar when exiting the business. The keys to managing rapid growth Orders have started pouring in. Revenue is skyrocketing. Your hard work and dedication are starting to pay off. Your business is growing. But growing your business isn’t the same as growing the value of your business. Top-line revenue growth doesn’t tell the whole story. Is the value of your business also growing, or are you just churning more dollars without a commensurate increase in profit, cash flow, and business value? When growing rapidly, don’t overlook these six important value drivers common to all businesses, across all industries: 1. Stable, motivated management team Consider two companies, identical in almost every way. They have the same revenue, are in the same
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industry, and the same geography. The difference is Company A relies on its owner to make all of the decisions. The owner of Company B, on the other hand, vacations six weeks each winter, plays 100 rounds of golf each year and goes fishing every weekend throughout the summer. Which company would you rather own? 2. Operating systems that improve sustainability of cash flow It’s important to develop, document and continually improve business systems that generate recurring revenue. Even in periods of rapid growth, you must not lose focus on good systems and processes, including how customers are identified and retained, how products and services are produced and delivered and how employees produce intended business results. 3. Solid, diversified customer base When growing quickly, pay attention to who your customers are and how much revenue each generates. As a general rule, no single customer should account for more than 10 percent of total sales. 4. Realistic growth strategy How will you continue to grow? Saying that you plan to grow rapidly isn’t convincing to a banker, investor or buyer, unless it is tied to a realistic strategy. Strategies should be realistic and tied to industry dynamics, increased demand for your products, new products or new product lines, marketing plans, growth through acquisition and/or expansion into new territories. Commit your strategy to writing.
agement, but also safeguarding the company’s assets. They are even more critical in the midst of chaos that comes with rapid growth. Good financial controls help businesses achieve consistent profitability. 6. Scalability Scalability is the capability of a system, network or process to handle a growing amount of work, or its potential to be enlarged in order to accommodate that growth. Companies in a rapid growth stage need to pay attention to their ability to “scale” and plan accordingly to ensure they have the people, materials, production, warehousing, financing and other critical processes and systems to accommodate the intended growth. Cash flow is king (or queen) Ultimately, it is the cash flow that determines the value of your business. Rapidly growing your revenue without a corresponding increase in cash flow is senseless. Churning greater and greater dollars without a similar rate of increase in cash flow is simply taking on significantly greater risk with no enhancement to the value of your business. Plan, execute, and monitor Just having a general idea in your mind about where you want your business to go is not a strategy. Good strategy defines, with specificity, what you want your business to achieve and what it should look like in one year, three years or even further out. The plan should include specific, measurable goals and you should have a process in place to monitor progress toward achieving them.
“Good strategy defines, with specificity, what you want your business to achieve and what it should look like in one year, three years or even further out.” Tom Siders L. Harris Partners
5. Effective financial controls Financial controls are not only a critical element of business manTom Siders is a partner with L. Harris Partners: 952.944.3303; tom.siders@ lharrispartners.com; www.lharrispartners.com.
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planning
BUSINESS BUILDERS
Four questions to ask a small business financial adviser by Kim Brown
TIPS 1. Many financial planners understand business issues, but may not have expertise in advising small business owners on their unique challenges and considerations. 2. Understand whether the firm or adviser makes a commission on the recommended investments in your portfolio and how much you are paying in commissions and/or fees for their services. 3. Look for an adviser who understands that every person, family and business are unique and who will advise, without exception, for your interests. 4. Make sure your financial adviser is on the same page with the rest of your team, including accountants, attorneys, real estate agents and business consultants. 5. Much of the advice that is available to you as a small business owner is faulty, so it’s important to find professionals you trust who can counsel you as your company grows.
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UPSIZE JULY • AUGUST 2019
IF YOU’RE RUNNING a business, you know that advice can be plentiful and well-meaning. Unfortunately, it can often be off track — or downright faulty. As a result, finding the right professionals to help guide you and provide counsel as you build your small company can be one of the most important things you do as a businessperson. And one of the most critical relationships for any small business owner is the one you build with your financial adviser. It’s no secret that the line between small business owners’ personal and corporate lives is razor-thin, or has even completely disappeared. I speak from experience — my husband Richard and I own JNBA Financial Advisors, a 25-person company that my motherin-law started 40 years ago. It’s been such a big part of our lives for decades and our business often blurs into our personal time. We’re more than comfortable with that. It works for us and helps us focus on what our clients need, which is a big part of the value we provide as business leaders. That’s equally true about your financial life, and why it couldn’t be more important to find a trusted financial adviser to help you and your family navigate both sides of the coin — personal and business — since they’re so connected. As you’re considering a wealth management firm or advisor, ask these four critical questions.
What’s your philosophy on small business financial planning? When working with small business owners, do you advise on both their business’ finances as well as their personal wealth management? Do you offer services that are tailormade for small business owners? Many financial planners are wellversed in areas of concern for business people, but they may not have expertise in advising small business owners on their unique challenges and considerations. Some of these may include exploring retirement savings options available to business owners, building a safety net for your family and your business simultaneously, giving back to your community, creating a legacy for the next generation and developing an exit strategy. A long-term financial partner with small business experience can help you plan for the most important aspects of both your business and the rest of your life. How are you compensated? Does the firm or adviser make a commission on the recommended investments placed in your portfolio? How much are you paying in commissions and/or fees for the services provided? Make sure to understand potential conflicts of interest and determine if you feel the adviser is always objective. By definition, a Registered Investment Advisor is held to a fiduciary standard and has a fundamental obligation to provide advice that is always in their clients’
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best interests. And being “independent” means there is no tie to a family of funds or investment products of a larger institution, further removing the potential for conflicts of interest. How well will you work with my other professional partners? The more successful you and your small business are, the more you’ll find that a team of trusted advisers is key to sustaining that growth. And the right financial adviser can bring together and ensure that all of the key members of your team — including accountants, attorneys, real estate agents and business consultants — are integrated, aligned and pointed in the same direction to achieve your goals and objectives. Look for someone experienced in taking the reins and acting as your “personal CFO” to ensure that everyone on the team is working together with an eye on both shortand long-term financial, professional and personal goals. Having a trusted adviser who is able to oversee and help hold the variety of professionals you work with accountable and on track is important. For small business owners, it’s especially critical when multiple professionals are working together to develop a succession plan or tax strategy, for instance. Will you advocate for me? An advocate is someone who’s always on your side of the table, always looking out for your best interests, and who will act accordingly. I believe it’s critically important to find an adviser who acknowledges that every person, family and business is unique, with different needs, challenges and opportunities — and who will always, without exception, act in your best interest.
For example, several years ago, our firm worked with a woman who had managed a real-estate business with her husband for decades. After her husband died and left her as the sole partner in the business, she was approached by one of her associates. He was a property manager looking for additional funding to keep a construction project moving. JNBA looked into the request and quickly determined that the man had a history of poor management. But the client explained that her late husband had known the man since he was a child and would have wanted to give him the money. So, we proposed a way to help fulfill her husband’s wishes while protecting her interests, and laid out a plan that held the property manager to a number of conditions. The property manager had no choice but to agree to the terms. Our client was happy with the compromise, and her associate committed himself to a sensible budget and completed the construction. Helping people navigate situations like this is why we got into this business in the first place — to be an advocate for people and to help guide them through life’s most important decisions. A trusted, objective third-party can remove the emotion from a situation, helping to sidestep the things that keep many of us awake at night — fear, uncertainty, lack of confidence. The answers you receive to these important questions will go a long way toward helping you choose a partner who is aligned with your values and priorities, and who can help you — and your business — succeed.
“A trusted, objective third-party can remove the emotion from a situation, helping to sidestep the things that keep many of us awake at night — fear, uncertainty, lack of confidence.” Kim Brown JNBA Financial Advisors
Kim Brown is president of JNBA Financial Advisors: 952.844.0995; kim.brown@jnba.com; www.jnba.com.
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Surviving a cyber attack Small businesses are targets, but training and diligence can help shut scammers down
O
ne Sunday night a colleague of Eileen Manning at her event planning company was dialing in remotely to do some work but was finding the connectivity slow. When she couldn’t get on to the company’s network she called Manning and described a scenario that just seemed odd. Though it was late, Manning advised her to call the The Event Group’s technology partner and, sure enough, hackers had gotten into a couple of the company’s computers and were causing havoc. The hackers had sent a ransom notice demanding Bitcoin in exchange for restoring The Event Group’s data. But the IT firm was able to shut the infiltrators down. “Because we caught it early, we just shut the whole thing down, wiped those two machines, reinstalled the information on everybody’s machine and we were up and running by 10 o’clock the next morning,” says Manning, founder and CEO of The Event Group. “It was because we had a plan in place.” Manning had long played a hunch when dealing with technology that having a partner would pay off. Turns out she was right. “We’ve always had an outside technology company to protect us and be our IT support,” she says. “When I started the business, I just knew from very early on it was really critical for some of the stuff I was doing.”
Manning leads cybersecurity event
Having an outside partner and spending time training employees allowed Manning’s company to thwart a cyber incident on her own turf. She’s become well connected in the statewide cybersecurity arena in recent years, as well. In 2011, the University of Minnesota’s Technological Leadership Institute (TLI) approached her to find out what she knew about cybersecurity. “I said ‘cyber what?” she says. “It was 2011. Cybersecurity wasn’t a household word.” But with the highest per capita collection of Fortune 500 companies in the U.S. and as a state with all 16 critical infrastructure sectors, as defined by the
The Event Group, headed by Eileen Manning, will host its ninth Cybersecurity Summit later this year.
by Andrew Tellijohn photographs by tom dunn
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UPSIZE JULY • AUGUST 2019
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COVER STORY U.S. Department of Homeland Security, located here, “we were going to be a target,” she says. The TLI tasked Manning with producing a cybersecurity summit. This year, October 28-30, Manning will oversee the ninth annual Cyber Security Summit. For the fifth consecutive year there is a stand-alone track for smalland medium-sized businesses. Cyber security is a vital topic for small businesses for a couple reasons, she says. First, large companies are requiring small business partners to fill out lengthy security questionnaires to show that their cyber practices are secure before they can ever do business together. Second, statistics show that many, if not most, businesses affected by an attack don’t survive. The upside for small businesses, Manning says, is there are a lot of steps they can take to protect their businesses and any companies they partner with that don’t cost a ton. Businesses seem to be noticing the importance of cybersecurity, she says. She’s expecting at least a couple hundred small businesses to attend. “It’s not like back in the 50s and 60s,” she says. “When the military wanted to protect us they could point a missile at Cuba. Today we are being attacked while we are sitting in our living room with our fuzzy slippers on. We aren’t even aware they are in the door.”
Training, outsourcing can help
The Event Group’s technology partner is Protocol 46, which provides cybersecurity technology and services to businesses. It’s comprised of former military personnel who use their experience combatting rogue nations to build a business fighting off cyber bad guys. Eric Ebner, chief technology officer, says even with the highly publicized hacking instances in recent years, business owners are still often trying to do cybersecurity themselves or, perhaps worse, doing nothing. He feels for them.
CONTACT: KEITH BURKHARDT, vice president at Kraus-Anderson Insurance: 952.707.8210; kburkhardt@kainsurance.com; www.kainsurance.com. SCOTT DRESSLER, chief information officer at Sunrise Bank: scott.dressler@sunrisebanks.com; www.sunrisebanks.com. ERIC EBNER, chief technology officer at Protocol 46: 651.300.0946; info@protocol46.com; www.protocol46.com. EILEEN MANNING, CEO and founder of The Event Group: eileen.manning@eventshows.com; www.plantoastound.com.
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“They didn’t get into business to file paperwork with the government and to become experts in compliance with this regulation or that regulation,” he says. At the same time, burying your head in the sand is taking a big risk and “the gamble is definitely not worth it.” And businesses big and small are taking note of the horror stories relating to companies similar in size to them getting hacked, he says. They’re realizing they need to address their cyber-shortcomings. Small businesses tend to not update or patch systems or have mature IT departments and practices, even though technology changes often, relatively easy changes that could decrease the odds of being victimized. Other changes are ensuring businesses don’t have a choice but to address cyber issues. The payment card industry, for example, has been shifting the responsibility for dealing with fraud to business owners. And the hackings have become much more complex and authentic looking, Ebner says. In the event a company is hacked, Ebner says the first thing they should do is call their service provider. Protocol 46 works 24/7 to figure out how the breach occurred and will preserve the information. “It’s just like a crime scene,” Ebner says. “If there is a breach that requires the computer forensics people to figure out why it was breached and how it was breached … that crime scene needs to be preserved.” When installed on a client’s network as a preventative measure, Protocol 46’s software looks for hostile activities inside networks, simulates phishing activities, working with the company’s existing security system, Ebner says, adding that the firm also does trainings on best practices and hygiene. Among the easy steps Ebner and Manning say companies can do to reduce the risk of being hacked are regularly updating their technology and conducting trainings with employees on the latest trends in hacking they should expect to see. “You’re starting to see people realize there is something that needs to be done,” he says.
Sensitive information needs protection
Few industries have more access to people’s personal information than banks. When Scott Dressler left a larger financial institution to become chief information officer at Sunrise Banks, his budget for cyber-security decreased significantly. But that’s not to say the company doesn’t take the issue seriously. The bank has an internal team focusing on the issue and it also teams with Protocol 46 for some of its tools and software. Among its most valuable services is helping
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COVER STORY “It’s not like back in the 50s and 60s. When the military wanted to protect us they could point a missile at Cuba. Today we are being attacked while we are sitting in our living room with our fuzzy slippers on. We aren’t even aware they are in the door.” — Eileen Manning, The Event Group
Sunrise Banks with its phishing campaign. “That’s usually the first place a hacker will come in is through an email with a hyperlink,” he says. “Every bank and financial institutions big and small has to be doing those same things. I just have an external vendor doing some things and I have my in-house team doing other things.” Anecdotally, Dressler says he’s learned the company’s model is not common. “The combination of those two things usually get me very high marks with the major auditors in the country,” he says. “I hire smart people and put them all around me. I think it’d be silly any longer in 2019 and beyond to suggest that any in-house department is going to have all the answers.” Dressler says there is some additional cost involved in the dual-approach but it’s also easy to make a case for the return on investment, when a security incident does arise. Sunrise had one incident where company officials went through the process and it was determined there was no breach. There have been no other security situations in the nearly three years he’s been at Sunrise. “It isn’t because we aren’t well equipped or we’re lucky,” Dressler says. “It’s that we have invested correctly in all the tools and we fight off on a fairly regular basis all the attempts that come up through our firewall.”
Insurance can mitigate risk
Cybersecurity is very dynamic, says Keith Burkhardt,
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a vice president with Kraus-Anderson Insurance. “Just as you start to figure out what’s going on, the bad guys come up with a new way to engage,” he says. “The consequence of all that is to think about insurance as a part of how a business survives a digital event that is not in their control.” “It used to be perceived that it’s an optional coverage,” he says. “Today I would say most businesses are buying it. I don’t believe they know how to consume it — how relevant it is — until they have the event.” About 80 percent of Kraus-Anderson’s commercial client base has addressed cyber insurance. Small businesses are often among them, he says, especially in supply chain businesses where Burkhardt says one or more of the partners in that chain typically require a financial means of fixing any potential damages that could arise from a breach. “Reliance and interconnectivity between businesses is escalating,” he says. “If you are in a supply chain or an end user distributor chain your partners in that chain are going to begin or have already started requiring you to be prudent in your cybersecurity.” One key: make sure you look out for your own needs, as well. He recommends buying cyber-risk insurance that will cover expenses you incur from an attack as well as those of a third-party affected by an incident. If you buy a cyberliability policy, it’ll cover the third-party, but “they’ll have no way to repair their own systems,” he says.
JULY • AUGUST 2019 UPSIZE
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WORKSHOP: M&A
ADVICE on ACQUISITIONS Experts offer insights on why deals fail, what can be done to maximize success
By Andrew Tellijohn Photographs by Tom Dunn
T
he Harvard Business Review pegs the failure rate for mergers and acquisitions at between 70 percent and 90 percent. Why does that happen? And what does it take to buck those odds? A panel of experts, sponsored by Upsize and Rick Brimacomb’s Club Entrepreneur, convened at the Minneapolis Club in June to share their insights on what it takes to make a successful merger, what mistakes are made often and on what the local M&A market looks like now and might look like in the months ahead.
Clarity of purpose
Many people still think of Deluxe Corp. as the company from which they buy checks. Deluxe does still sell them, but that accounts for only about 40 percent of revenues now. For the last two decades the company has been diversifying, adding different products and services in an effort to become more valuable to its customers. “We needed to be doing more than that and have a much deeper relationship with our clients’ things that would be in more organically growing spaces – things that would stretch our capabilities and take us way beyond just printing,” says David Graff, the company’s executive director of corporate development. 18
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Rick Brimacomb, ClubE The company has done more than 50 acquisitions in Graff ’s 20 years with Deluxe. Among the keys to a successful deal is the homework that needs to be done up front. One important factor is knowing your goal. “What is it you want to do, what is it you want to achieve,” he says, adding that knowing early on what the end might look like and having the team in place to bounce around ideas that will help you get there are important first steps. “Get clarity around those goals. It doesn’t have to be lofty. It can be simple.”
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WORKSHOP: M&A “You get the deal done, it’s a big event, but then you have to play the rest of the game. That’s where you’re going to judge your success. You’re not going to look back and say ‘gosh, Dean, that purchase agreement you drafted was pure poetry, that was wonderful.’” —David Graff, Deluxe Corp.
Building the team
Whether it’s diversification, playing defense to ensure a competitor doesn’t acquire the same target, adding skilled employees fast or shifting to a new focus, there are many reasons companies consider acquisitions. Universally, Graff and the rest of the expert panelists say having the right advisers helping research and structure deals is key. While that can include internal people, each speaker shared anecdotes detailing times when external oversight could have helped a deal go more smoothly. It’s vital, says Ryan Turbes, partner at Boulay Group, that those working on a potential acquisition have had experience with mergers and acquisitions. He’s seen deals nearly fall apart because a company’s own CPA was unfamiliar with how some financial details should be interpreted. “That’s probably the biggest frustration point we typically see in some deals,” he says. Melissa Johnston, senior vice president with Highland Bank, says lenders should be brought in on a deal before a letter of intent is signed. Without educated insights, details can be missed. “You’d hate to issue an LOI you can’t stand behind or put in some terms that are not going to work,” she says. “For example, earnouts aren’t allowed with an SBA loan. So, you’d hate to work hard on this LOI, get the earnout all buttoned up and then find out ‘I’m going to need an SBA loan and we’re going to have to change this.’” Experts on mergers can also help throw out different ideas that might help advance a stalled negotiation, says Dean Willer, chair of corporate practice group at Winthrop & Weinstine.
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“It’s often worthwhile to have a couple other trusted voices in there earlier,” he says. “They often can add a little more value on the front end than they could later on after a lot of the decisions have been made.”
Reasons deals fail
In addition to not having the right team in place, experts say there are countless reasons deals either fall through or fail to have the desired effect on a company after once completed. On the company side, Johnston says, one of the reasons for failure is when the existing firm and the acquired business have mismatched “go-to-market” strategies. On the individual side, she says buyers often have a vague strategic rationale for buying a business and sellers are occasionally not entirely transparent. “I had a client that bought a service business a couple years ago and had found out after the closing that the seller didn’t renew the international license, which was responsible for about 30 percent of the revenue,” she says. “So, a lawsuit ensued and the seller ended up forgiving the seller note.” State and local taxes are starting to interfere with getting deals done, as well, says Turbes. “Over the last five years, my goodness has that changed with states being more aggressive. That whole area of our diligence has increased significantly,” he says. “We have killed a lot of deals because of state and local tax issues where there is nexus in other states. That liability, when you add it up, … it’s a pretty material number.”
Integration is key
Another important factor in the success or failure
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WORKSHOP: M&A
“If you talk to any investment banker or business broker out there, they will tell you they’ve had deals where the owner actually sabotaged their own deal because they are afraid.” —Melissa Johnston, Highland Bank
of an acquisition is integration. While getting a deal done after months or even years of negotiations can be a relief, experts say that is just the beginning. Many problems arise when companies do a poor job of bringing the existing and new businesses together. “You get the deal done, it’s a big event, but then you have to play the rest of the game,” Graff says. “That’s where you’re going to judge your success. You’re not going to look back and say ‘gosh, Dean, that purchase agreement you drafted was pure poetry, that was wonderful.’” “The design and structure are very important, but when you’re going to look back and figure out whether a deal was successful for you or not, it’s going to depend on what it ended up doing for you,” he adds. “Did it meet your objectives that you had going into it, either financially or strategically?”
CONTACT THE EXPERTS DAVID GRAFF, executive director of corporate development at Deluxe Corp.: 651.787.1405; david.graff@deluxe.com; www.deluxe.com. MELISSA JOHNSTON, senior vice president at Highland Bank: 952.858.4798; melissa.johnston@highlandbanks.com; www.highlandbanks.com. RYAN TURBES, partner at Boulay Group: 952.841.3104; rturbes@boulaygroup.com; www.boulaygroup.com. DEAN WILLER, chair of corporate practice group at Winthrop & Weinstine: 612.604.6633; dwiller@winthrop.com; www.winthrop.com.
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“Integration, that’s the kickoff,” Turbes says. “That’s where the real legwork begins. It’s funny when you talk with people who have closed a transaction. They’re like ‘that was fun.’ But you don’t know what you’re in for now for the next year.” The integration side, Willer adds, is where the rubber meets the road. “I think really savvy acquirers, on the front end, spend a lot of time thinking in terms of what the integration looks like after they close, not so much ‘okay, this is attractive, this is a sexy target.”
Additional advice
Johnston urged business owners who are pondering some kind of transaction to preserve some personal or business liquidity. “If you are looking to make an acquisition in the next 12 month, two years, three years, now as a business may not be the time to develop those cost centers that have been on your mind” she says. “Now would be the time to retain that cash so you can put it toward an acquisition along with keeping a backstop because there are always unforeseen expenses, bumps in the road.” It’s also important to set expectations, both internally and externally, with team members, sellers and even yourself, Willer says. “Understand what you are getting into,” he says. “It’s going to be a lot of work. It’s a lot of stress, a lot of everyone’s time. Internally and then externally, make sure that they understand what you are expecting to see, what your timeline is so everyone goes into it with the most amount of clarity. … If you are good about setting expectations internally you won’t get personally frustrated as easily, you won’t get the seller frustrated as easily or your team frustrated as easily.”
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WORKSHOP: M&A “Entrepreneurs, when they are starting out, are understandably wanting to do as much as they can on their own. I’ll pick up a lot of clients after they’ve tried to go down a path and run into a brick wall or fallen into a ditch.” —Ryan Turbes Boulay Group
Market might be softening
While acquisitions are challenging, the experts say after several strong economic years they’re still doing a lot of deals. Johnston described the market in recent years as “frothy” and Turbes says Boulay is as busy as it’s ever been. That said, Johnston informally surveyed some of her broker and investment banker contacts and she senses the market may be slowing, if only just a tad. Interest rates remain low, credit is available and it remains a seller’s market, she says. But they are starting to have to give just a bit more. “I wouldn’t say it’s a slowdown by the nature of that word, but I’m just seeing things starting to turn a little bit,” she says. Willer recalls folks during high times a decade ago saying they were waiting for just a bit more, only to
get stuck in the business when the market tanked. He’s been telling clients for four years that if they want to sell the time is now. Sooner or later he’s going to be right, but for now he remains as busy as ever. “Between the low interest rates and the enormous amount of kinetic activity on the deal side,” he says, “it’s been a fantastic and fun M&A market the last few years.”
“I think really savvy acquirers, on the front end, spend a lot of time thinking in terms of what the integration looks like after they close, not so much ‘okay, this is attractive, this is a sexy target.” —Dean Willer Winthrop & Weinstine
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JULY • AUGUST 2019 UPSIZE
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catching up by Andrew Tellijohn
Neuropathy treatment closing in on kickoff
B
iolyst Inc. was in its early stages when Upsize caught up with CEO Phil Walter in 2012. Walter was optimistic about the company’s chances of making a real difference in people’s fights against peripheral neuropathy, a condition in which nerves that carry messages to and from the brain and spinal cord are damaged or diseased. The company had raised $2 million from angel investors and there was talk of having 200 franchisees providing locations for the company’s laser treatment within five years. The company has changed course a bit. The future, Walter says, is in company-owned clinics, not franchising. But Walter is no less optimistic that Biolyst’s Realief therapy, a cloud-based artificial intelligence system that titrates a laser therapy dosage for each individual patient at each treatment based on their presentation of symptoms, is on the brink of substantial growth. Over the last seven years, the company has been focusing on two tracks. The first was proving the treatment actually works. The company has built up a massive database filled with information 22
UPSIZE JULY • AUGUST 2019
add this treatment to their systems. “Through that process of testing the different clinic models over nine years,” Walter says, “we’ve determined what kind of clinic works best, what gives us the most effective, efficient outcomes for the patient, and what we can grow the easiest.” The company is closing in on landing a $25 million Series B round of financing that would allow it to expand its base of company-owned specialty clinics. Walter says they’ll start with four centers in the first year and ramp up from there. Growth will pick up speed as the treatment gains provisional insurance coverage, likely by the end of year two, he says. The funding partner or partners will also likely open some offshore clinics in joint ventures with Biolyst. The company’s first clinical trial, which Walter says yielded significantly positive results, was conducted and published by the University of Minnesota’s oncology department. The funding will allow the company to complete additional clinical trials. Biolyst will then simultaneously begin opening company clinics and performing the clinical work necessary to achieve approval for its treatment of peripheral neuropathy from the U.S. Food and Drug Administration. The device has 510(k) clearance from the FDA, which demonstrates that the device it’s marketing is at least safe and effective as a legally marketed device that is not subject to premarket approval. But Biolyst wants to achieve official FDA approval because “we determined early on we were going to be an evidence-driven company,” he says. “We weren’t going to fall into the trap of a lot of new medical modalities” that go to market without any scientific proof of their efficacy or safety.
about all the patients who have received treatment, the specific nature of their situation, the parameters of their treatment and the results. “We gather about 6,000 data points per patient through the initial course of care,” Walter says. “That gives us the largest patient registry in the world that we know of for peripheral neuropathy.” It’s the only registry structured in such a way that it can be used for titrating photons for the treatment. That’s important, he says, because in order to properly dose phototherapy and get the parameters right you have to be able to go through the titration process. “A one size fits all treatment is not consistent or particularly effective against peripheral neuropathy symptoms,” Walter says. The second track was proving the treatment is commercially viable. Biolyst has seven clinics up and running. Each is a bit different. Some are run by medical doctors specializing in pain management. Others have chiropractors in charge and still others are dedicated clinics doing nothing but this therapy. The company has received significant interest from a few companies in the Lessons learned along the way health care industry and from health care Walter says the last seven years officials in foreign countries looking to have been hugely educational. First,
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Biolyst Inc. is closing in on funding that will allow it to open more Realief Neuropathy Centers in the near future.
be stingy with your money. “Otherwise you’re going to run out of it too soon,” he says. “You can’t chase down a whole lot of rabbit holes. You have to stay focused.” He adds that you can’t assume you know everything upfront. Your business plan may have been a good place to start, but that it’s almost definitely going to change along the journey. “If you are in a new market where it’s all new territory there are a whole lot of lessons that are going to surprise you,” Walter says. “You have to be flexible with your business plans and be able to adjust quickly.”
Biolyst Inc. which does business as Realief Neuropathy Centers CEO: Phil Walter Headquarters: Eden Prairie Founded: 2010 Employees: 2 (and about a dozen contractors) Website: www.realiefcenters.com
For instance, Biolyst initially planned to franchise. But the company learned it was costly to be a franchisor and that, with annual filings, audits and rules in some states preventing franchising medical businesses, it was also complex and time consuming. Additionally, when the company finetuned its software to the point where it required physicians to follow a strict data collection protocol before its laser would even power up, Walter says the discipline sought via a franchise system was no longer necessary. “If they try to run the laser without doing any kind of titration it isn’t going to work,” he says. “The laser is a paper weight unless they gather the information the algorithms need.” So, after years of testing, tweaking and collecting statistically validated data, Biolyst is “essentially at the starting line,” Walter says. “We’re waiting for the gun to go off. We’ve got a lot of interest by the medical community and others following us and watching what we are doing.”
“If you are in a new market where it’s all new territory there are a whole lot of lessons that are going to surprise you. You have to be flexible with your business plans and be able to adjust quickly.” — Phil Walter
Realief Neuropathy Centers
Contact: Phil Walter is CEO of Biolyst Inc., which does business as Realief Neuropathy Centers: 952.484.1983; p.walter@realiefcenters.com; www. realiefcenters.com. www.upsizemag.com
JULY • AUGUST 2019 UPSIZE
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UPSIZE RESOURCE DIRECTORY accounting Cummings, Keegan & Co., p.l.l.p
BANK Highland Bank
business machines Coordinated Business Systems, Ltd.
St. Louis Park, MN • Apple Valley, MN 952-345-2500 • www.ckco-cpa.com Kathy J. Klang, CPA/ABV
Rick Wall, CEO | 952.858.4753 Troy Rosenbrook, President | 952.858.4810 952.858.4888 | www.highland.bank
851 W. 128th Street• Burnsville, MN 55337 (952)894-9460 (p) (952)894-9238 www.coordinated.com • Jim Oricchio – President
Business owners in all phases – new and emerging, established, and those planning a succession or exit strategy – rely on Cummings, Keegan & Co., P.L.L.P. for a complete range of tax, accounting and auditing, and business management needs. Clients receive a tailored client experience – driven by client preferences, needs, and goals.
Founded in 1943, Highland Bank is focused on business lending and is an SBA “Preferred” Lender, making us uniquely qualified to help your business obtain the financing it needs expeditiously. Work directly with the decision-makers who will treat you like a business partner. Member FDIC.
Coordinated Business Systems is Minnesota’s premier independently owned and managed provider of document imaging technology and managed IT and network services. In addition to providing the latest hardware and software, our mission is to offer custom designed managed print services, document management and managed I.T. and Network services programs to help business of all sizes improve profitability, increase productivity, lower costs and maintain their competitive edge.
Follow us on
ADVERTISING • MARKETING Risdall
Bank North American Banking Company
BUSINESS TRAVEL Professional Travel Service
Contact us: 651.631.1098 and www.risdall.com Ted Risdall, Owner Dave Schad, General Manager
Offices located in: Roseville, Minneapolis, Woodbury, Hastings Brad Huckle, President and Chief Lending Officer www.nabankco.com
Andy Chaussee | 763-577-2307 andy@professionaltravelservice.com 3545 Plymouth Blvd Ste 114 Mpls, MN 55447 www.professionaltravelservice.com
Our goal at North American Banking Company is to give business owners all of the banking services they need and make it a great experience. Our bankers are seasoned professionals in all areas of business banking. You will find it’s easy to do business with bankers who are focused on you. We’re not your average bank.
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BUSINESS BROKER Calhoun Companies
COMMERCIAL PHOTOGRAPHER Tom Dunn Photography
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For more than 100 years, Calhoun Companies has served as matchmaker for buyers and sellers, guiding both into the next phases of their lives. We focus on small- to mid-sized businesses, helping them leverage their assets and realize their goals through business brokerage, commercial real estate, mergers and acquisitions, and business valuation services.
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BANK Flagship Bank Minnesota
BUSINESS BROKERS Sunbelt Business Advisors
COMMERCIAL REAL ESTATE The Ackerberg Group
Andy Schornack, CEO | 952-358-2522 Brian Wagner, President | 952-358-2513 952-944-6050 | flagshipbanks.com
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Thinking about buying or selling a business? Sunbelt is the world’s largest seller of private companies. We work with business owners to help them understand the current value of their business and how to maximize their net proceeds at the time of sale. Sunbelt will provide business owners with a completely confidential, no-obligation value range. www.sunbeltmidwest.com.
The Ackerberg Group creates vibrant neighborhoods in Minneapolis’ urban core by combining astute development, renovation, investment, management and brokerage services with passion for social and ecological sustainability and the arts. Since 1964, Ackerberg has created office, industrial, retail, residential and mixed-use projects that have transformed neighborhoods through the development of long-standing relationships with neighbors and tenants alike.
BANK Crown Bank 6600 France Avenue South, Suite 125 Edina, Minnesota 55435 Ph: (952) 285-5800 www.crown-bank.com Tom Healey, founder Imagine a bank that actually helps you get what you want. Instead of red tape, loan committees and canned lending formulas. Work with a decision-maker who can back you up from start to finish.
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Today’s entrepreneur brings creativity, passion, and flexibility to the task of achieving success. Flagship Bank can help because these are precisely the qualities that we bring to each customer of our bank, and their community. With six convenient locations and a staff of experts, we are ready to offer our support. Let’s talk today. Member FDIC. Equal Housing Lender.
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UPSIZE JULY • AUGUST 2019
ADVERTISING SECTION
www.upsizemag.com
UPSIZE RESOURCE DIRECTORY computer consulting Intertech
insurance O’Rourke Agency, Inc.
LAW FIRM Lommen Abdo
1575 Thomas Center Drive • Eagan, MN 55122 www.intertech.com • Ryan McCabe at rmccabe@intertech.com or 651.288.7001
41 North 10th Avenue Hopkins, MN 55343 952-932-7219 (phone) 952-932-2820 (fax) www.orourkeagency.com Tim O’Rourke
1000 International Centre, 920 Second Avenue South Minneapolis, MN 55402 612-339-8131 | 800-752-4297 www.lommen.com | Contact: Jesse Beier
Intertech consultants are leading software developers who focus on more than simply “heads down” programming. We provide comprehensive software services – consulting, project delivery and mentoring – for all leading technologies, most notably Java, .NET and mobile. Intertech consultants are highly experienced and among the IT industry’s top contributors at conferences, technology journals and user groups.
Our agency has provided personal and business insurance services for the past 30 years. We proudly represent a number of outstanding insurance carriers, including Chubb, Metropolitan, Progressive, Travelers and Kemper. Call us for all your insurance needs!
Looking for a business lawyer who speaks plain English and not legalese? Contact Lommen Abdo where we focus on small, medium-sized, family and closely held businesses. Our attorneys operate like your outside general counsel – providing you effective legal advice and sound business strategies. We are upfront about our costs and will work with you to budget legal expenses.
FINANCIAL PLANNING Goff Investment Group
it managed services Tech Guru — The Caring Technology Company
LAW FIRM Winthrop & Weinstine, P.A.
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The Goff Investment Group team helps clients invest and manage wealth for retirement and legacy planning. They take pride in building long-term relationships with their clients. For over twenty five years they have specialized in retirement planning for individuals and small businesses. The team has tremendous passion for educating investors about their financial future.
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Tech Guru’s Caring Technology Services offering is built for businesses and non-profits with 25-250 employees that want consistent uptime. By being responsive, collaborative, and security-minded, Tech Guru helps organizations maximize returns on IT investments, minimize technology risk, and achieve their strategic visions.
ADVERTISING SECTION
Winthrop & Weinstine has a long tradition of representing entrepreneurs and rapidly growing private and public companies across the Upper Midwest and the United States. Our mission is to help fuel the growth of great companies. We are committed to providing outstanding service, sound advice and strong execution. We offer flexible fee arrangements including fixed fees, “success” fees, hourly fees, blended fee arrangements and performance-based agreements.
JULY • AUGUST 2019 UPSIZE
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UPSIZE RESOURCE DIRECTORY LENDER Connect2Capital
MANAGEMENT & OPERATIONS SALES DEVELOPMENT BCV Consulting Minnesota Sales Institute
801 Nicollet Mall, Suite 1700W Minneapolis 55402 www.connect2capital.com Contact: Maddie Larson, maddie@crfusa.com
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Connect2Capital is a non-profit lender with people right here in your community who will work with you to find the best loan for your small business. We offer small business loans from $50,000-$4 million for permanent working capital, owner-occupied commercial real estate and leasehold improvements, business equipment, and refinancing existing debt.
Transform something strong into something superb! Hitting the ceiling is inevitable and timing is everything in business growth. As a Fractional Integrator/COO, orchestrate day-to-day business functions to engage people in problem solving and integrating solutions. Committed to providing the Visionary with trust, clarity and accountability for your team.
mailing services Braemar Mailing Service Inc.
MANAGEMENT & OPERATIONS SBA LENDER Visionary Integrator Solutions Highland Bank
7379 Washington Ave S • Edina, MN 55439-2417 tel: 952-767-0300 fax: 952-767-0345 www.braemarmailing.com cu@braemarmailing.com
Contact: Barbara Voorhees, Mark Francis, Roger Scherping, Suzanne Lyon integrator@integrator-solutions.com www.integrator-solutions.com
Since 1985 business mailers who value personal service and meticulous attention to detail have found one company rich in both. We are postal experts and list brokers who offer a full service lettershop and data management services. Your mailing, unique or ordinary, in large quantities or small, receives Braemar-style attention to detail. We are proud of the work we do and the customer service we provide.
Don’t be a Trapped Visionary! ™ Work on your big ideas. Develop your big relationships. Get out from under the day-to-day. Leverage part-time leadership and enjoy day-to-day order. Your team can be focused, aligned and accountable. We provide Fractional Integrator/COO/GM services for EOS® companies. We help Visionaries get un-trapped.
301 – 4th Avenue South, Suite 272 Minneapolis, MN 55415 (612) 789-5700 www.mnsales.com Contact: Scott Plum, Founder Minnesota Sales Institute works with business owners, CEO’s and salespeople who are committed to learn, grow and change their selling skills and process to adapt to the current marketplace. We offer full and half day, interactive workshops; onsite classes; individual coaching and executive consulting.
Troy Rosenbrook, President | 952.858.4810 Kim Storey, SBA Lending Manager | 952.858.4590 952.858.4888 | www.highland.bank Founded in 1943, Highland Bank is focused on small business lending and is an SBA “Preferred” Lender, making us uniquely qualified to help your business obtain the financing it needs expeditiously. Work directly with the decision-makers who will treat you like a business partner. Member FDIC.
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Wednesday, August 28th
A Luncheon Workshop at the Minneapolis Club
THE RIGHT STAFF Building a Workforce
Workshop attendees will learn how to find, select, recruit, hire and retain the best people — while avoiding the pitfalls that are often part of the process. A panel of experts presents vital information on these topics, and answers questions from the audience. Cost: $34.00, which includes the program, lunch and parking during the event. Location: The Minneapolis Club, 729 Second Ave. S. Enter the parking ramp from the 8th Street side.
SPACE IS LIMITED! REGISTER NOW, go to https://bpt.me/4247730 For questions, please contact the Front Desk team of The Minneapolis Club 612.332.2292 or concierge@mplsclub.org
SCHEDULE: 11:00 – 11:30 — Registration & Networking | 11:30 – 1:00 — Introductions, Lunch & Workshop | After 1:00 — Networking
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ADVERTISING SECTION
www.upsizemag.com
UPSIZE RESOURCE DIRECTORY STAFFING Scouts Talent
TRANSITION PLANNING KeyeStrategies
WEALTH MANAGEMENT JNBA Financial Advisors
1600 Utica Ave S, #900 Minneapolis, MN 55416 (952) 484-6947, www.scoutstalent.com Gwen Martin, Mark Flaherty, Susan Haugen, Partners
Minneapolis, MN Keyestrategies.com 763-350-5563 Julie Keyes, Founder/CEPA
8500 Normandale Lake Blvd. Suite 450 Minneapolis, MN 55437 952.844.0995 www.jnba.com Cärin Viertel
Scouts is an accounting and finance talent firm in Minneapolis - St. Paul. Financial hiring managers count on Scouts to provide consultants when they need specific expertise to fill interim roles or complete projects. Scouts represents highly-marketable financial consultants, from senior accountants/analysts to CFO’s, who depend on Scouts to find them projects that best leverage their talents and interests.
“KeyeStrategies LLC advises business owners in Transition and Exit Planning. Julie Keyes is both a Certified Exit Planning Adviser (CEPA) and Value Growth Adviser. She is also a faculty member for the Exit Planning Institute’s Global organization and President of its local Chapter.”
As a pioneer of an independent fee-only approach to wealth management that allows advisors to sit on the same side of the table as clients without being influenced by commissions and other conflicts of interest, JNBA marks its 40th year of providing advice driven by advocacy™ and always doing what’s in the best interest of clients.
SUCCESSION PLANNING Lommen Abdo
venture capital Brimacomb + Associates
WEB DESIGN/DEVELOPMENT ThermoDynamo
1000 International Centre, 920 Second Avenue South Minneapolis, MN 55402 612-339-8131 | 800-752-4297 www.lommen.com | Contact: Cameron Kelly
TCF Tower, Suite #1600, 121 South Eighth St., Minneapolis, MN 55402 612-803-3169 * www.brimacomb.com Rick Brimacomb, rick@brimacomb.com Chief Strategy and Relationship Officer
601 Carlson Parkway #1050, Mpls, MN 55305 612-250-2828 | www.ThermoDynamo.com Alex Levin | alex@thermodynamo.com
You owe it to yourself, your family, your co–owners and your employees to have a business succession plan in place in the event of incapacity or death. Every business and every family is unique and your succession plan needs to fit your goals for your business and your family. Contact us to design a plan that meets your goals.
Results-oriented advisory firm with unparalleled access to executive suites and financing sources. Emerging companies and established professional services firms rely on our depth of knowledge and deep-network connections to grow client lists, assemble project resources and secure new sources of funding.
ThermoDynamo is a Web Design + Development + SEO + Marketing company. Our business first approach creates highly visible, compelling digital content that captivates audiences and produces measurable outcomes for our clients. We also specialize in website re-designs, website maintenance and repair. Excellent customer service, fast turnaround times and great outcomes are our modus operandi.
GROW OR DIE Move your business forward with investment capital generation, deep-level network connections and strategic refinement consultation from Brimacomb and Associates. We partner with emerging companies and professional services firms to offer unparalleled access to professional resources, executive suites and financing sources.
www.brimacomb.com 612.803.3169 • rick@brimacomb.com www.upsizemag.com
ADVERTISING SECTION
JULY • AUGUST 2019 UPSIZE
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BACK PAGE Launch Minnesota to help today’s start-ups become tomorrow’s Fortune 500s
T
echnology entrepreneurs and others starting and building companies will get some assistance from the state starting this fall. The Minnesota Department of Employment and Economic Development and the state Legislature this year created Launch Minnesota to help grow its startup community. Launch Minnesota will not only house many ongoing programs but also will provide funds for training and assisting the businesses they hope will be major employers in the future. DEED Commissioner Steve Grove joined Upsize managing editor Andrew Tellijohn to discuss Launch Minnesota’s significance. Tellijohn: Why is Launch Minnesota important? Grove: We think economic development needs to focus on the businesses of the future and creating a great ecosystem for innovation in Minnesota. When we came into this administration we talked to a lot of entrepreneurs and venture capitalists to figure out how Minnesota’s start-up ecosystem is good and how it could use some help? We really want to make sure our economy is prepared for the future and we’re creating the most jobs we can for the state. Tellijohn: What does the initiative do? Grove: It has three main pieces at its core: The first is a series of innovation grants to help entrepreneurs get started, whether it’s R-and-D grants, 28
UPSIZE JULY • AUGUST 2019
(Small Business Innovation Research) matching funds or business liquidity grants to set up shop. The second pillar is a series of educational grants that help entrepreneurs get training and guidance to create a start-up: how to pitch a venture capitalist, how to create a technology team. We want to create an outreach arm that allows entrepreneurs to build their companies with some help from experts. The third pillar is an office outside government in a local co-working space that becomes a centralized outreach center for all that we are doing. More than that, it’s going to become the umbrella under which all the startup activity we do exists. The Angel Tax Credit is a part of it, some of the broadband work we’re doing is part of it, the emerging entrepreneur loan program is part of it. We want to put a stamp on our work to help entrepreneurs and high-technology companies succeed. And we hope it’s not just government that’s doing this, but that we’re partnering with the private sector and other players. Tellijohn: Rather than working at the Capitol, your director will be working in co-working space. Why? Grove: Part of it is to ensure that people are aware of the effort. Having an office not in the halls of government, but out in the community where entrepreneurs spend their time, is critical. It’s also about giving us access to other community leaders and key startup figures in the community so we’re
Steve Grove
building the right program. Tellijohn: How can people find out about Launch Minnesota? Grove: There will be an official kickoff in the fall. Once we do, you’ll be able to navigate to us at a specific URL where you can apply for grants and all that good stuff. For now go here: https://bit. ly/2YVdxwd contact: STEVE GROVE, DEED Commissioner: 651.259.7114; DEED.CustomerService@state.mn.us; mn.gov/deed.
www.upsizemag.com
WE MOVE IN ONE DIRECTION
FORWARD. C O R P O R AT E D E PA R T M E N T C H A I R
DEAN D. WILLER P / 612.604.6633 E / dwiller@winthrop.com
Our Corporate & Transactions attorneys use the law to help you reach your goals for your business. We work with clients at all stages of growth, from business formation to succession planning and everything in between, focusing on creative solutions and practical advice that helps you move your business forward.
Investing in you.
Today’s entrepreneur brings creativity, passion, and flexibility to the task of achieving success. Flagship Bank can help because these are precisely the qualities that we bring to each member of our bank, and their community. With six convenient locations, and a staff of experts, we are ready to offer our support. Let’s talk today.
Grow with us. Brian Wagner 952.358.2513 Eden Prairie | Isanti | Minnetonka | Ramsey | Wayzata North Oaks | flagshipbanks.com |
