Decision Making

Another Way To Decide If Debt is Worth It

Gregory Pearl

As Warren Buffet said, “the only way smart people go broke is through leverage”. But how smart people get to the point where they go broke is an interesting study in psychology. The trick is knowing how to balance off the risks and rewards. The most important factor to consider is that the amount of the debt needs to be less than the value of the reason why you took it on. Here is a consumer example: one individual took on a six-figure student loan debt to gain a professional credential in a low-paying niche healthcare field. The field is…

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Alternative Investments, Culture and Ethics

Does Impact (Social Good) Investing Work? Why Not?

Gregory Pearl

Are you skeptical of Social Investing? Does ESG (Environmental, Social and Governance) investing actually create value and achieve the social good it claims? Is investing and managing for the overall Social Good affected by the American business culture? Some may think these questions are controversial. Capital flows continue to flow into ESG oriented funds but these have not performed as well as those that do not have the same investment policy. Note the commentary of none other than Aswath Damodaran, professor of valuations at NYU Stern school of business. On his blog he states: “Companies have come under pressure to…

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Decision Making

Does Losing Cause More Pain Than a Gain Gives Satisfaction?

Gregory Pearl

This question has been repeatedly studied by behavioral economists and psychologists. The answer up until now has always been ‘Yes’. Until now. Studies supporting the Loss Aversion idea are fairly numerous. These studies come from some of the most prestigious psychologists out there. For example “the value function is considerably steeper for losses than for gains’ (Tversky and Kahneman 1986). Or “the asymmetry is commonly thought to occur because people expect the pain of losing something to exceed the pleasure of gaining it” (McGraw et al., 2010).  Forgive me for not providing proper citations. This is a blog,  not a…

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Culture and Ethics

Company Culture Isn’t the Most Important Thing. It May Be the Only Thing.

Gregory Pearl

Don’t think about Company Culture here and there. Use it as the compass to guide your business. But don’t let the culture in your company evolve naturally. If you don’t take control of its direction, a culture will develop nonetheless and it may not be what you want. If you take control and direct the culture then everyone from the top management on down will understand how important it is and join in. It’s a never ending process. Company culture can sometimes deviate away from where you want it to be. As the company leader, you’ll need to bring it…

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Culture and Ethics

How to Develop a Positive Culture in Your Company

Gregory Pearl

At the beginning of my career, I focused on developing my technical skills. That was normal, but the more experience I gained the more obvious it became that company culture is supremely important to business success. If fact, it is maybe the most important thing. It impacts every part of the business.  From core values to hiring decisions to decision-making. I soon came to understand that culture needs to come before everything else.  All else flows out of the culture of your company. Building a productive and healthy culture is a giant task.  In startups that is especially so because…

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Buying & Selling a Company

Selling a Company in a Pandemic

Gregory Pearl

The worst of times can make the difficult process of selling a business even harder. Even when economic conditions are favorable, most M&A transactions collapse multiple times before finally closing. When the economic environment is difficult – extremely difficult – you can count on additional problems and hurdles to getting a deal done. Even if the transaction is attractive including terms that are advantageous to both parties, both buyers and sellers may be fighting to handle business and personal issues. The last thing on everyone’s mind could be getting the transaction to the finish line. Delays are inevitable in the…

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Exit Planning

More Thoughts on How to Prepare for a Successful Business Exit

Gregory Pearl

Continuing from the last post, here are four more ways to better prepare for a business exit. Before getting to the next four ways to prepare, I would suggest that the startup/company management always be talking to private equity types (if you can get their attention). If you can get one of them on your side, even if they will not invest directly, you will often receive excellent advice. A good PE type, and not all are good that’s for sure, are extremely knowledgeable and can help with everything from sales, and marketing to operations to product strategy. Here are…

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