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From Bootstrapped to Funded: How This CEO Landed a $150 Million Investment On Her Terms – Entrepreneur

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Globalization Partners founder Nicole Sahin talks about her company’s news-making transaction.

February
4, 2020

5 min read

Opinions expressed by Entrepreneur contributors are their own.


When CEO Nicole Sahin founded Globalization Partners in 2012, the global employer of record market was largely undefined and unchartered. Its closest domestic doppelganger, known as a PEO (professional employer organization), has a U.S. market worth $170-plus billion. Sahin quickly bootstrapped Globalization Partners to serve clients in 175 countries, while employing 200 people in 60 countries, resulting in astronomical revenue growth, with projections of $500 million in revenue this year alone.

After years of turning down investment offers, Globalization Partners announced today that it has accepted a $150 million minority investment led by Wincove Private Holdings and TDR Capital (Sands Capital also participated). The funds will be used to accelerate further international growth, including a heavy investment in client service and technology development.

Sahin, who was featured in my book, Disrupters: Success Strategies From Women Who Break The Mold, sat down with Entrepreneur to talk about why she finally took the plunge by accepting external funding and how she was able to maintain control of the company she built.

Related: How to Get Funded as a Female Minority-Led Startup

How did you navigate unchartered territory to help build a business in a new and disruptive industry?

Before I started Globalization Partners, I used to provide services to companies that were hiring salespeople around the globe. It was a lot of work, investment and red tape to hire one-to-two people in a country, and clients are always afraid they’ve missed something due to the complexity of a global expansion in the more traditional way of doing business.

When I started the business in 2012, I wanted to build a best-in-class global legal platform that would enable companies to leapfrog over the traditional complexities of global business. It took three years to feel confident that I could get the legal and tax issues to work in each country. I started to build and scale the platform and the team at that time.

For years, you were fielding calls from investors. How did you from “no” to “maybe” to “signing the deal”? 

I first considered taking funding quite some time ago, because I knew the company was at a tipping point and growing like a rocket ship. Having people around the table who have “been there, done that” and could help me grow and manage the business well was always my priority. We have mutual agreement that [Wincove, TDR and Sands] are investing in my leadership. This requires a lot of trust on both sides. It motivates to not let them down. I’d walk over hot coals before I’d let down my client or my team, and it’s the same with my investors.

Our lead investor, a good friend of mine whom I trust on a personal and a business level, agreed to core principles and structured a deal in a way that would enable me to feel confident I have control over the triple bottom line philosophy and will never have to put myself in a position that’s out of line with my integrity — with my clients, my team or shareholders.

Tell us more about the triple bottom line philosophy you just mentioned.

My team and I have always said we have a two-folded company mission: Change the way the world does business by making it easy for anyone to hire anyone anywhere, and prove that happy clients and employees are the best investment in your bottom line. To date, we’ve had 95 percent client satisfaction scores, and my entire team is highly incentivized not only to grow, but to grow with the same quality we’ve always built the business on.

My colleagues and I agreed at the outset on various factors of the triple bottom line, focused on the happiness of employees, clients and shareholders. We still have to make hard decisions, but we do them with dignity. From a human perspective, I don’t want to spend my life building anything I don’t feel fabulous about, and I don’t want to ask anyone else to either. 

What did you learn during the decision-making process that may surprise other founders?

Many entrepreneurs are scared to talk about their businesses with investors because they don’t want to give up their ideas. While caution is smart, it’s overkill to avoid discussions in order to protect your business. Investors aren’t operators; there is little risk that they set up a team to execute on your idea. There is always the risk that they invest in your competition.

Related: Grants and Loans for Women-Owned Businesses

What advice do you have for other CEOs considering funding who don’t want to compromise their culture and direction?

Be open to having a conversation. If nothing else, the insight that can be provided is extraordinarily valuable. It’s also important to get clarity for yourself about what you want. Some prompting questions may be: Do you want to run the business or sell the business? What’s important to you? Where are your boundaries and what are you willing to give up?

It’s also really important to not agree to anything you can’t live with or that is going to keep you up at night. You are in control of your decisions in this process. Be willing to walk away, and if you do, be radically clear in your decision and accept the consequences. Alternately, be profoundly clear in your decision to accept whatever you’re compromising on.  It’s important to feel good about whatever deal you strike.

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Venture capital investment slides to prepandemic levels in second quarter amid tech slowdown – The Globe and Mail

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Canada’s tech sector has struggled since last fall as a mixture of macroeconomic events, including the pandemic and Russia’s invasion of Ukraine began triggering supply chain slowdowns and broad uncertainty.Nathan Denette/The Canadian Press

Venture-capital funding in Canada fell to prepandemic levels in the second quarter this year as the tech downturn hit privately held companies, the Canadian Venture Capital and Private Equity Association says, and financiers warn that the sector’s sudden caution may continue.

The CVCA said in a new report Thursday that there was $1.65-billion in venture capital (VC) deployed across 182 deals in the second quarter of 2022. It was the lowest quarter since the pandemic prompted a flood of cash into digital-services companies, down 67 per cent from $5.1-billion in the same quarter in 2021. But it was roughly on par with 2019′s $1.66-billion second-quarter investment.

The investment figures the association released for the first half of 2022, however, suggest that the downturn’s true impact will be more starkly revealed in the coming quarters as data catches up with the gap between when deals are first negotiated, closed and then announced.

What crisis? Venture capitalists bet big on crypto

Where are venture capitalists investing in Canada?

In its report, the CVCA said that the $4.5-billion in investments announced in the first quarter – the country’s second-highest quarter on record – was largely comprised of 25 “mega-deals” worth more than $50-million that were “largely residual transactions” from 2021.

Particularly among later-stage companies, “we’re going to see a slowdown that might persist,” Christiane Wherry, the CVCA’s vice-president of research and product, said in an interview. While some of the institutional investors her association works with are “able to stay the course” with financings, she said she’s seen much more caution among smaller VC firms, funds and family offices.

There may now be a “more realistic air” to the venture ecosystem as venture investors spend time “digesting the end of the pandemic and where we go from here,” said Matt Golden of Golden Ventures. Michael Hyatt, entrepreneur, investor and Northleaf Capital Partners adviser, said that financiers “are being highly discriminate about what they are going into.”

Sean O’Connor, managing director of Conexus Venture Capital in Regina and chair of the CVCA’s data committee, said that “founders and VCs are not seeing eye to eye as we figure out what the new world looks like,” which could lead to tension in calculating company valuations.

“We’ve seen the VC space move back into something a bit more normalized from before the pandemic, but it’s a struggle to figure out how much of that regression will show up in valuations.”

The swelling of valuations in both public and private markets during the first two calendar years of the pandemic has been broadly recognized, in hindsight, as a unique moment in which a global shift to digital services coincided with historically low interest rates.

The moment was also precarious. Ms. Wherry acknowledged that 2021′s record-breaking Canadian venture investment levels, which the CVCA calculated as reaching $14.2-billion, was an “outlier year – with record high levels that we probably won’t return to any time soon.”

The tech sector has struggled since last fall as a mixture of macroeconomic events including the pandemic and Russia’s invasion of Ukraine began triggering supply chain slowdowns and broad uncertainty. Subsequent high inflation put pressure on central banks to boost interest rates, making capital more expensive and drying up the pools of investor money that flooded the market for tech companies since the Great Recession.

Not all segments of the tech sector are facing the same headwinds in Canada, according to the CVCA’s numbers. Young, seed-stage companies aren’t exposed to the same investor pressures and economic factors as bigger, cash-consuming firms. They saw $263-million in financing across 104 deals, making the second quarter the highest on record both in terms of total investment and deal number.

Environmentally friendly or sustainability-focused companies, classified as “clean tech,” saw investment levels surpass 2020 levels in the first half of 2022, and the CVCA said the sector could reach 2021 investment levels by the end of the year. “As investors shift their focus from the pandemic, which was an emergency situation, now they’re shifting their focus to something equally as urgent,” Ms. Wherry said.

But in general, the public-market pullback was a shock for later-stage companies that might hope to tap into public markets: the CVCA didn’t record a single initial public offering last quarter, it said.

After numerous massive deals in the first quarter, such as a $775-million round for password-protection company 1Password (AgileBits Inc.), the biggest deals last quarter were much smaller. They included $185-million for Calgary challenger bank Neo Financial Technologies Inc., $101-million for “unbreakable” pantyhose maker Sheertex Holdings Corp., US$100-million for biotechnology startup Ventus Therapeutics Inc. and $100-million for Toronto virtual-private-network company Tailscale Inc.

The CVCA also reported Thursday that Canada saw $3.3-billion worth of private-equity deals in the second quarter – a 32-per-cent drop – across 202 transactions.

With a report from Sean Silcoff

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Thailand's investment pledges slump in H1 as foreign projects wane – SaltWire CB powered by Cape Breton Post

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BANGKOK (Reuters) – Investment applications in Thailand dropped by 42% in the first half of 2022 compared to the same period last year, official data showed on Wednesday, led by a sharp fall in foreign projects as the global economy slowed.

Foreign investments, which made up 60% of the overall 220 billion baht ($6.22 billion) of applications in January-June, more than halved year-on-year, data from the Board of Investment (BOI) showed.

But a surge in electric vehicle (EV) and digital investments bucked the trend, and the BOI said on Wednesday it had approved several new major investment pledges.

“We will continue to monitor the situation and adjust our policies and incentives to ensure Thailand remains the resilient destination of choice for global investors in fast growing sectors such as electric vehicles,” BOI said in a statement.

The Southeast Asian country has promoted high-tech sectors and supported EVs to maintain its status as a regional auto production base.

In January-June, investment pledges in EVs surged 212% from a year earlier to 42.4 billion baht while ones in the digital sector jumped 202% to 1.45 billion baht, the BOI said.

On Wednesday, the BOI approved investment pledges worth 44.5 billion baht – including China’s BYD’s 17.9 billion baht project to produce EVs, and PTT’s 18 billion baht gas production project, the agency said.

($1 = 35.38 baht)

(Reporting by Kitiphong Thaichareon, Satawasin Staporncharnchai and Panarat Thepgumpanat; Writing by Orathai Sriring; Editing by John Geddie)

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Quebec pension giant Caisse takes $33.6 billion investment hit in worst markets in 50 years – Financial Post

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Pension fund writes off $150-million investment in bankrupt Celsius

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The Caisse de dépôt et placement du Québec posted a negative return of 7.9 per cent for the first six months of the year, in what chief executive Charles Emond noted was the worst period for stock and bond markets over the past 50 years.

As of June 30, the Caisse had net assets of $392 billion, with the $28.2-billion decrease due to investment losses of $33.6 billion offset by $5.4 billion in net deposits. The losses included a full write off of the fund’s US$150 million investment in crypto lender Celsius Network LLC, which is now in Chapter 11 bankruptcy proceedings in the United States.

“The first six months of the year were very challenging,” Emond said in a statement. “The mix of factors we faced had not been witnessed in several decades: spiking inflation that triggered rapid and sharp interest rate hikes, rare simultaneous corrections in both stock and bond markets, fears of an economic downturn and the war in Ukraine with its many collateral effects.”

Over the same period, the Ontario Teachers’ Pension Plan Board reported a positive return of 1.2 per cent on Monday.

During a news conference Wednesday to discuss the Caisse results, Emond said the Quebec pension fund wrote off the Celsius crypto investment even though it is considering its legal options and intends to preserve its rights in the court-monitored U.S. bankruptcy proceedings.

“We decided to take it now” out of prudence, Emond said of the writeoff. “The last chapter hasn’t been written.”

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He said his team conducted extensive due diligence with outside experts and consultants. They were aware of management and regulatory issues at Celsius and underestimated the time it would take to resolve them, he said, adding the Caisse was keen on “seizing the potential of block chain technology” and perhaps the investment in Celsius had been made “too soon” in the company’s development.

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He noted that the investment was a very small part of a large venture portfolio that has produced 35 per cent returns over the past five years.

“In these disruptive technologies, there’s ups and downs…. Some big winners and many losers,” Emond said.

Although the Caisse posted an overall return in negative territory for the first six months of the year, the performance exceeded that of its benchmark portfolio — which posted a negative return of 10.5 per cent.

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“Over five and 10 years, annualized returns were 6.1 per cent and 8.3 per cent respectively, also outpacing benchmark portfolio returns,” the pension manager noted.

Emond said the Caisse is managing the “turbulence” with a combination of asset diversification and strategic adjustments made since the COVID-19 pandemic began.

“For the past two years, we’ve been working in an environment of extremes characterized by particularly fast and pronounced changes. These unusual and unstable conditions will persist for some time,” he said.

“In the short term, we’ll be watching what central banks do to contain inflation and how that impacts the economy.”

  1. The Ontario Teachers’ Pension Plan board eked out a 1.2 per cent return in the first half of the year.

    Ontario Teachers’ Pension Plan Board ekes out small return in ‘difficult’ markets

  2. The Canada Pension Plan Investment Board reported a 4.2 per cent loss, equivalent to $23 billion, for the three months ending June 30.

    CPPIB breaks winning streak with $23-billion loss amid ‘market turbulence’

  3. In July, crypto lender Celsius Network filed for Chapter 11 bankruptcy protection and owes users about US$4.7 billion.

    Canadian watchdogs join probe of Celsius’ multi-billion-dollar collapse, sources say

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During the first six months of the year, negative returns in equities and fixed income were partially offset by gains in the Caisse’s investments in real assets including infrastructure and real estate.

The pension giant posted a negative return of 13.1 per cent in fixed income, which beat the negative 15.1 per cent return for its benchmark portfolio. This represented nearly $3 billion in “value added” attributable to all credit activities, the Caisse said.

A negative return of 16 per cent in equities beat the negative 17.2 per cent return in the benchmark portfolio.

The Caisse’s real estate and infrastructure portfolios, meanwhile, generated a 7.9 per cent six-month return, “demonstrating their diversifying role which contributes to limiting inflation’s impact on the total portfolio.”

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The real asset class performance also beat the benchmark portfolio’s return, which was 2.4 per cent.

“So that asset class played its role. The two portfolios are doing well,” Emond said.

He said it is challenging to compare the short-term performance of Canadian pension funds because they have e different mandates and investment models. The Ontario Teachers’ Pension Plan, for example, has less exposure to equity markets than the Caisse and more exposure to natural resources and commodities, which performed well in the first half of the year.

• Email: bshecter@postmedia.com | Twitter:

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