brg_privatus ci3o family office_ business wealth pitch deck

Family Office ‐Business Wealth & Endeavors

Pitch Book.2015

How to Differentiate Yourself How to Differentiate Yourself

GovernanceGovernance

RelationshipsRelationshipsknowledgeknowledge

INTRODUCTION

We listen. Then we provide options or find answers that provide independent strategic guidance to entrepreneurs & family and their advisors;

1) options for the business if retained, or business as investment acquisitions

2) opportunities for owner and family plus risk management program and

3) strategy preparation and navigation to remain dynamic.

Engagements are customized and priced for the Middle Market, to Small Cap Businesses.

BRG Privatus CI3O

Risk

IT’S TIME FOR ACTIONPost Transaction. Your Business. Your Liquidity. Your Future.

Privatus CI3O @ All Rights Reserved

Who

• $50Million to $500Million‐ middle market

• $500Million to $3Billion – private and small cap public markets

A family with business interests of most all sizes, board and C‐suite, their staff and advisors deserve to know their best options & opportunities


TeamRobin Coady SmithFounder, Strategic Value Architect & Strategist

• Robin served as chief‐of‐staff of a prominent, multi‐generational, 11‐figure family office and operating business, the stock of which was tied up in trusts. Lofty capitalist goals of owner conflicted with trustee objectives, no strategy, and family dependency were issues.

• She has 3 major unplanned transition events under her belt involving premature death, departure and incapacity.

• She has 2 planned business transactions and countless wealth transfer transitions. A major transaction stumbling points involve The 6T’s; transfers, transactions, transitions, transformation, taxes and trouble.

• High EQ

• Market: affluent entrepreneurial families and advisors, family business to small cap public businesses.

• Reasons: advance preparation provides more options for the business and opportunities for owner and family, with less money left on the table. We help families and advisors to align and to act with clarity around the 6T’s .

• A well planned transition roadmap and strategy eliminates stress, perceived loss of control , uncertainty of decisions or how to execute getting from here to there.

Carl Lloyd Sheeler, PhD, ASACo‐Founder, Strategic Value Architect & Strategist

• Carl is a successful entrepreneur, corporate and military officer and strategist.

• Berkeley Research Group, Managing Director and Group Leader, Family Office‐Business Strategies.

• BRG’s Strategic Value Architect shaping company and family values with constituent intake/alignment, operational audits, due diligence and risk management skills.

• He is also chief‐of‐staff of a prominent family office in Los Angeles.

• Market: affluent entrepreneurial families and small cap public companies and advisors

• Reasons: minimize risk and optimize value using a strategic framework that begins with constituent intake to identify “gaps” and misalignment and ends with effective plan execution.

• He has presented or written for John Wiley & Sons, the American Bar Association, the America and the Institute of Certified Public Accountants and the Appraisal Foundation.

• He has completed 1,200+ engagements and testified as an expert on 165+ occasions such as shareholder disputes and breach of duty.


Too Many Set the Bar Too Low For Success

“The greatest danger formost of us is not that ouraim is too high and wemiss it, but that it is toolow and we reach it”

Michelangelo


…With A Tactical Focus & Multiple Lenses

Owner/Family

Trusted Advisors

Business Advisors

FinancialAdvisors

Legal & Tax

Advisors

Usually legal, investment and tax minimization

Limits a strategic or longer view of

Opportunities for sustainable growth

Succession, Transition, Risk skills

The business as income AND growth

Differing Lenses‐ differing interpretations & solutions


The Transition ChallengesUnplanned transitions are highly disruptive with ad hoc responses.

One transition, in particular, arises from an asset or an equity interest transaction.

Transforming to a planned transition is an opportunity to engage in strategy and a forward perspective.

Examples

How to get from “Here to There”

Owner transition from “doing” to “becoming”

Other trigger events; death, disability, divorce, departure, dilution, dysfunction and dispute


Entrepreneur’s Challenges

Beginning and Navigating a Transition Involves Unfamiliar Decisions

Premium expectations , subpar results

Nominal interest in retirement, lofty ambitions

No longer view or strategic focus

Lower net proceeds, make it up from riskier investments


The Statistics for Liquidity & Wealth Transactions

Upwards of 91% of families are unable to keep financial wealth intact

Less than 10% achieve a “premium” outcome of growing sustainablewealth and identity and reputation intact for 3 generations of family or longer.

THE OLD APPROACH IS A BUSTLET’S DO SOMETHING NEW


Family Office: Managing Wealthwithout an eye on the limiting factors*

*A variety of factors, including risk, lifestyle, disputes or conflicts, unfortunate choices and economic events can more quickly erode financial wealth. A defined vision, purpose and strategy can identify the right paths, tools and mid course adjustments needed.


… The Risk Lens Often Loses Its Focus

• Unplanned disruptions/ transitions

• Constituent opinions

• Life cycle position• Ever changing points of interest

11

STARTING TODAY, LET’S AIM HIGH, RAISE THE BAR

& DO “SOMETHING” NEW, TOGETHERPrivatus CI3O @ All Rights Reserved


Why Begin With the End in Mind?

“If you want to do something new, you have to stop doing something old.”Peter Drucker


Our Offering: For Family & Advisors

• Shaping a Strategic, Thriving Business or Business & Family Office Framework & Practice

AND/OR

• Risk Drivers; Identify, Measure, Manage, Mitigate • Governance• Relationships• Risks‐ Tangible• Knowledge

• Risk Mastery• Managing the business(es) asset

The “softer” family centric interests & expectations, emotion based, around the business, liquidity/ transition events, risk and the future:

These are the base level for which entrepreneurs and families are entitled to clarity around:• What is my ecosystem?• Who are my constituents?• How do I get there from here?• Guidance in navigating the owner/family transition• Simplifying technical guidance into a clear roadmap• Paths for wealth management • Options for next endeavors & next generation• How to adopt a strategic, longer view and focus

Business & Wealth (Technical)* Family & Advisors (Empathy)*

*Specific Project & Retainer Based Services


Family Office: Think GovernanceWhat Can Differentiate You From the Crowd? Culture; cohesion, choice, capital, clarity, communication, calm.

Strategy; both risk and opportunity coupled with dynamic capabilities; sensing, seizing and transforming

“You have to be fast on your feet and adaptive or else a strategy is useless.”

Charles de Gaulle, French general and statesman

SensingIdentification of opportunities & risks proactively


Family Office: Think Relationships

Relationships ARE your most valuable asset

Advisors; best in class and aligned

Leverage; bring entrepreneur, family, advisor risk lenses into focus around legacy,

liquidity, learning, living, listening and leading

.


Family Office: Think Risk Mastery

“If you want to do something new, you have to stop doing something old.” Peter Drucker

Getting from “here”to “there” requiresfilling “resource” gaps


Family Office: Think KnowledgeUncommon Knowledge & Constituent Knowledge

• Uncommon Knowledge; dynamic analytics, leveraged ecosystem

• Constituent knowledge; thought leaders, visionary stewards


We Begin With Your End Game

Those that can answer the following questions can get “There”.

1. How do we define wealth and success?

2. How do we scale (“grow”) holdings?

3. What are our planned and unplanned transitions?

4. What are our options for liquidity?

5. What is our strategy to get to there from here?


Family Office: Entrepreneurial Ecosystem(+$o.5B assumed)

• Real Estate, One or More Companies, Business Interests (Private AND Public)

• Active/ Passive Investments

• Other Affluent Families/Investors

• Core Family Members

• G1, G2, G3, G?• Other Family Family

Office C‐Suite

(CEO/CIO),

Family CouncilSr. Staff

Portfolio

Human & Financial Capital

Family Holdings“Patient” Money

Attends to Planned and Unplanned Transition Events – Risk Management / Value Creation

Most Trusted Advisor (s)Wealth Advisors, Insurance, Bankers, Tax, Legal


Family Office: The Ground Work

“GRRK” – Governance, Relationships, Risk & Knowledge

provides the strategy, the metrics and the actions to allow families to move from “success” to “significance”.

provides time and clarity to leverage and align human and financial capital to pursue opportunities and reduce risks.

What This Affords Families

an opportunity to sustain their legacy across 3 or more generations.

“real” alpha can often be 2x, 5x or more when measuring tangible and intangible assets.


Service in Action: A Blend of Technical & Empathy SkillsA Business Case• CEO desired to step down

• Family leadership disputes ensued

• Disagreement grew over low offers, the CFO reached out to Privatus to;

• help the business and family understand what contributed to the low offers

• create timelines; define a successor for the business so CEO could step down

• evaluate offers independently and discuss other options for the business and for the family.

• Concepts became a clear vision and a road map around “What should the business and/or our family’s wealth look like over 5 to 10 years?”

• Simplifying and aligning family and advisor technical guidance into a roadmap.

• The decision was made to keep the business and grow it.

• We executed strategy to ensure the company remained dynamic, streamlined decisions, “no plan” became a strategic plan.

• Dissent was reduced as strategy and options added clarity. We helped the family and a new board to adopt strategic thinking, hire a new non‐family CEO who could achieve a 10 year growth plan. Strategy for the board transformed its purpose to dynamic governance, optimizing shareholder value and risk management.

• We doubled the value of the business in 2 years while the family retained majority control.

A Liquidity Event/Wealth Case• In 2005, an entrepreneur bought a failing start-up for $3 million.

• He spent the next five years building the company to approximately 300 employees and in 2010 sold it for $350 million cash and netted almost $100 million.

• The liquidity event “overwhelmed.” him His identity, confused. Was he Company CEO, Family Man and Mr. Future? What to do next as a wealthy man?

• In the first year , the only thing he did was to pay off all his debt. Aside from that, he was lost.

• Multiple financial advisors assumed he was retiring.

• A promise of an 8% total return was nothing like the 30% performance he created as company founder.

• He began by “doing”. He invested in the wrong opportunities. Friends in important roles were not working out. Poor choices and decisions were dissipating his new wealth

• He wanted a roadmap and guidance for advisors.

• We provided the independent focus to shape options and a strategic perspective, essential to happy outcomes, clarity of options and how to progress from “here to there”.

• An engagement begins with defining expectations of what 5 years, 10 years or a generation might look like with the founder, family, staff and trusted advisors.

• Metrics included company equity value and how to achieve scale and weigh family involvement in his next growing business We help to execute until these were cohesive and organic.


Privatus CI3O & Berkeley Research Group Uniquely Positioned to Exceed Your Expectations

Family Centric Focus, A Thriving Business, Strategy & Alignments enables:

• Premium business value

• Happier outcomes with cohesion for entrepreneur and family

• More options post transaction

• More time for the entrepreneur

• More opportunities for entrepreneur and family


Privatus CI3O & Berkeley Research Group Uniquely Positioned to Assist Your Journey Becoming a Conscientious Capitalist of Significance

How and Why Enduring Capitalist Families are Different

Is a Capitalist Role Right for You?• Business Success – From the beginning the business has a strategic purpose. IF there is a transaction

it’s only while the business is intact, growing & profitable

• Other Endeavors – begin early, grow in prominence. The reward is historical recognition.

• Family Legacy ‐ The overarching contributions to industry or society. What endures. The best

legacies are when family members flourish in their own right and this contributes the family legacy.

Capitalists learn early to invest in diverse knowledge, insight and skill resources that can be leveraged.


Business Model

IdentifyIdentify

SenseSense

SeizeSeize

TransformTransform

ExecuteExecute

Fees are influenced by the use of staff, advisors ( existing/new) and BRG/Privatus/Founders Group resources. An ecosystem may involve family and/or business relationships that influence decisions, expectations and outcomes. Constituents include, but may not be limited to stakeholders, such as founder, C‐suite, key staff, family, clients, vendors, board, key shareholders, personal and professional associations, bankers, insurance, wealth, tax, legal and family business professionals.

Projects are based upon man‐hours or man‐hours at &750 per hour to $175 per hour plus a success fee with the latter having a lower upfront fee for more “skin in the game” (results oriented.)

Empathy projects are retainer based for a defined period of time.

Building Dynamic Businesses & Strategic, Thriving Multi-purpose Framework for Family Office-Business


How Much You Get to Keep, MattersDuring and post‐transition the question becomes how much you get to keep when the business wasn’t “fixed”, “gut feel” was the motive, interests and expectations are misaligned and now supporting lifestyle starts:

Entrepreneurs ‐ casual interest only in managing wealth ‐ cash flow‐ the loftiest of capital building goals

Next Generation ‐ loftiest of ideas for investing liquidity

THIS IS THE OLD APPROACH WE’RE HERE TO HELP YOU DO SOMETHING NEW


Who Will You Choose to Guide YouBefore, During and After this Event?Why do‐it‐yourself or do nothing is most expensive

The absence of mastery, confusing control with skill and authority, no longer view perspective

A trusted advisor, friend, some one else What you should consider; their skills, focus or motivations and knowledge base

We are uniquely positioned to exceed the premium result you expect & anticipate the contingencies or road blocks• High EQ/ IQ – both technical and empathy• Strategic focus • Simplifying technical guidance into a clear roadmap• Alignment of interests amongst family and advisors


What is Your Reason for Waiting?

You Do Not Have to Travel Alone

Experience What It Feels Like to Exceed Your Expectations

Privatus CI3O Services, LLC All Rights Reserved@2014 29

Here’s To Your Success

Robin Coady Smith1330 Avenue of the Americas, 23rd FlNew York, NY 10019Phone: 1‐646‐328‐1982Email: [email protected]

Carl Lloyd Sheeler, PhD, ASA, CBA, CVA2049 Century Park East, Suite 2525Los Angeles, CA 90067Phone: 1‐310‐499‐4842 CA

1‐646‐328‐1981 NYEmail: [email protected] or [email protected]: www.prcio.com

brg_privatus ci3o family office_ business wealth pitch deck

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