PODCAST: On Older Doctors Selling Out to PRIVATE EQUITY

BY ERIC BRICKER MD

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CITE: https://www.r2library.com/Resource/Title/0826102549

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More Ideas to Help [Medical] Entrepreneurs

David Cummings on Startups

After giving a tour of the Atlanta Tech Village last week to a C-level executive of a local Fortune 500 company, he asked, enthusiastically, how he could help out. I cited the normal ways like mentoring, hearing curated pitches from startups (see One Way Government Can Help Startups), and spreading the word about the innovation taking place in their own backyard. Then, he asked something else that stuck with me: what are some other ideas you’re considering to help entrepreneurs?

Here are a few more ideas to help entrepreneurs and startups:

  • Host a weekly/monthly AMA (ask me anything) in-person where a successful entrepreneur answers questions (straight Q&A)
  • Lead a regular webinar that’s open to anyone with a different entrepreneurship topic each week (e.g. product management, engineering, sales, marketing, fundraising, etc.)
  • Facilitate an entrepreneur bootcamp program
  • Run more programs to help founders meetup, internship fairs, and domain expert roundtables

Ultimately, increasing the…

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Doctors as Private Financiers?

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Doctors Acting as Lenders, White-Knights and Venture Capitalists

By Rick Kahler CFP® http://www.KahlerFinancial.com

Rick Kahler CFP

Every now and then I get a call from a doctor client wanting my opinion about starting a business with a friend, investing money in a business owned by a family member, or co-signing a loan to help a family member buy a business. Being in business with family is something I know a little bit about, having been in partnership with my father and brother for 40 years. Going into business with family members or close friends can carry a high degree of risk, both financially and emotionally.

In part this is because it is uncomfortable or difficult to ask the necessary dollars-and-cents questions. We don’t want to seem uncaring, unsupportive, or untrusting. We are concerned about damaging the relationship. Yet the relationship is far more likely to suffer if we don’t ask those questions and the venture fails.

My Rules

The following are some things to consider before you invest or go into business with someone close to you:

1. Don’t even consider putting money into a business without seeing a detailed business plan. Ask the same questions about risks, costs, and potential profits that you would ask if this person were not a family member.

2. Insist that the person at least talk to other possible investors who aren’t emotionally involved. This will give both of you some feedback from neutral third parties about the validity of the opportunity. A banker or a potential investor who isn’t a family member will ask questions you may not even think of asking.

3. Do your own research and seek out some independent advice. A financial advisor or someone with a lot of business experience can be a valuable source of questions, information, and alternatives.

4. Ask yourself whether you want to be involved in this business. Does it support your own goals? Do you know anything about this field or have any interest in it? Sometimes people invest on behalf of family members because they feel they “should.” Yet, had those same proposals come from acquaintances or business colleagues, they would almost certainly have said no without a second thought.

5. Try to think of other ways you might be supportive without putting money into the venture. Maybe you can think of lower-risk alternatives or other possible sources of funding. Remember, too, that if your wish is to support and encourage family members, helping them jump into an unacceptably risky investment isn’t exactly doing them any favors.

6. Pay close attention to any difficult feeling you are experiencing when considering investing in this enterprise. Explore any feelings like fear, anxiety, or sadness to determine if there is further wisdom to be gleaned. Perhaps you may be unconsciously ignoring some crucial warning signs.

7. Communicate clearly. Emphasize from the beginning that protecting the relationship is your most important consideration. If you decide not to get involved, be direct about it. Saying no right away is more respectful than is stringing the person along because you don’t want to hurt someone’s feelings. Yes, choosing not to invest in a family member’s project may cause some tension in the relationship. That’s minor compared to the damage the relationship could incur if you invest and the business fails.

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Achievement

Assessment

Sometimes, the best way for a successful doctor to support a family member’s financial well-being is to turn down an investment request. If outside parties are not willing to commit funds to a project, maybe there’s a message there that both of you need to hear. If you wouldn’t make an investment on its own merits, you almost certainly shouldn’t make it just because it involves a friend or family member.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Hospitals: http://www.crcpress.com/product/isbn/9781439879900

Physician Advisors: www.CertifiedMedicalPlanner.org

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Public Misconceptions of Private Equity

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A Political Season Review

By Rick Kahler CFP® MS ChFC CCIM

www.kahlerfinancial.com

During tax time and this very political season, some of the attacks on Mitt Romney as a Presidential candidate have focused on his tenure with the private equity firm Bain Capital. Critics and rivals have denounced Romney as “profiteering off the backs of fired workers,” and running a “vulture capital” rather than a “venture capital” fund. A PAC supporting Newt Gingrich even produced a documentary about Bain which tries hard to leave viewers with the idea that capitalism isn’t evil, but private equity firms are.

The Negative Impressions

Some of this negativity may come from a lack of understanding as to what “private equity” really means. Here’s my explanation.

First, equity just means “common stock.” Whether equity is public or private depends on whether the company lists its shares on a public exchange, like the New York Stock Exchange or the NASDAQ, or is privately held.  When you purchase a share of common stock, either directly or through a mutual fund, you buy it from a public stock exchange where anyone can buy or sell shares of stock. Private equity shares, however, are bought and sold privately, just like houses or small businesses.

One of the benefits of a public exchange is that it makes owning a slice of a company exceedingly affordable. For example, for about $600 you can own a share of Apple, the largest company in the U.S. If Apple were privately held, you would need $500 billion to buy it. If you were a little short on cash but still wanted a piece of Apple, you and 999 of your closest friends could pool your resources. You’d only need $500 million each.

That is exactly what a private equity company does. It brings together substantial investors, usually institutions, pooling their money to purchase companies not available on public exchanges. This requires raising or borrowing amounts that may be in the billions of dollars. The minimum to invest in a public equity company is often one million to 25 million dollars or more, putting it out of reach of most Americans.

An Asset Class

However, that doesn’t mean John Q. Public doesn’t own a slice of the private equity pie. Public pension funds, like the South Dakota Retirement System, have invested over $200 billion in private equity funds. The SDRS invests over 10% of its $7.8 billion fund in private equity. Many investment officers and committees feel this is such an important asset class that not holding a portion of their portfolio in private equity would violate their fiduciary duty to the fund.

Why Invest Privately?

Why invest in companies that are privately held? They often are purchased for lower prices than their publicly traded cousins, which makes owning them more profitable. In other cases a private equity firm will purchase a company that is failing or purchase a public firm and make it private.

In most every case, the private equity company’s aim is to try and improve the profitability of the company in the hope of reselling it at a profit or taking it public. Sometimes this is successful; sometimes it isn’t.

Goals of Private Equity Firms

What is the goal of a private equity company? Why, to produce a return for its investors, of course. Like any other business, its ultimate goal is not to create jobs. While more jobs may be a byproduct of creating better profitability, that isn’t always the case. Nor should it be.

Assessment

Failing to turn around a struggling company or laying off a division that is sucking a company dry in order to save the company isn’t evil. It is a natural and crucial component of a competitive free market system, a system that has given the U.S. one of the highest standards of living the world has ever known.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Our Other Print Books and Related Information Sources:

Health Dictionary Series: http://www.springerpub.com/Search/marcinko

Practice Management: http://www.springerpub.com/product/9780826105752

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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What’s Your Business [Practice] Start Up Style?

Entrepreneurs, their Styles and the Drive Behind Them!

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[By staff reporters]

It goes without saying that it takes a special kind of person to become a doctor, and an entrepreneur.

Driven, motivated, innovative – these are just a few of the many ways to describe individuals who risk everything to transform their vision into reality; or to save lives.

We created this infographic to celebrate the entrepreneur, not only for their individual, quirky styles, but also for their contributions to the global economy.

Source: bizsugar.com

How it Works

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Assessment

Are medical professionals the same or different today -OR- in the health 2.0 future?

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Product Details

 http://www.BusinessofMedicalPractice.com

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