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The Death of Cash

Sat, 06/20/2020 - 10:01am

Both globally and in the US, the payments ecosystem is evolving.

Two related trends: the slow death of cash and the fast rise of digital payments, are transforming how consumers, businesses, governments, and even criminals move money.

Annual global non-cash transactions are expected to pass the 1 trillion milestone by 2024. This major transformation is being propelled by several factors, including increased usage of digital wallets, more small vendors adapting to accept credit cards, and the explosive growth of mobile commerce.

In The Death of Cash slide deck, Business Insider Intelligence projects what the payments ecosystem will look like through 2024 by examining the driving forces powering digital payment proliferation.

This exclusive report can be yours for FREE today.

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Legendary venture capitalist Marc Andreessen schedules every part of his day, including when he sleeps, to avoid becoming a burned-out micromanager

Sat, 06/20/2020 - 9:53am

"Software is eating the world,'' was the famous quote of noted entrepreneur Marc Andreessen; but software was also eating up his days in his earlier career as a startup founder and tech investor. Now he's learning to wrestle those days back into a sustainable lifestyle under his control.

The legendary venture capitalist and Netscape founder used to leave his days wide open and work on whatever needed his attention most while he was building his company and later his venture firm Andreessen Horowitz. But in a conversation with angel investor Sriram Krishnan for Krishnan's newsletter The Observer on June 13, Andreessen said that he quickly burned out and had to adjust his approach to work.

"The big thing is I've basically done a complete 180 degrees off of the model that I had from 13-14 years ago," Andreessen told Krishnan.

That model propelled one of Silicon Valley's preeminent thinkers, founders, and investors. Arguably few others have had as much influence on Silicon Valley and the technology industry writ large as Andreessen. But in the end, he had to create a regimented agenda for his daily tasks and projects to maintain a semblance of work-life balance.

"When I was younger, I didn't really have the concept of turning off," Andreessen said. "But there comes a time, a little bit with age, when your body rebels. And obviously, if you have a family, that's not great with a system where you're just always working."

Now Andreessen's program looks more along the lines of what outsiders might expect. He said he lives Monday through Friday on a highly regimented, impeccably documented schedule on his calendar. He intentionally schedules time for sleep, workouts, and even free time between meetings to ensure he isn't sitting in meetings all day long.

"Free time is critical because that's the release valve," Andreessen said. "You can work full tilt for a long time as long as you know you have actual time for yourself coming up. I find if you don't schedule enough free time, you get resentful of your own calendar."

Although Andreessen schedules his time relentlessly and sticks to it, he said he finds building in that free time provides a buffer that can allow him to deal with crises and think critically about big issues facing his portfolio companies or his firm. Executives who are similarly scheduled, but with back-to-back meetings instead, tend to lack that flexibility and can easily slip into bad habits, he said.

"Then the other thing you've probably seen is the managers who are regimented to that degree end up being micro managers," Andreessen said. "The extreme form - and I've worked with a couple of people like this - end up having a long line outside their office. The lines will stretch waaaay down the hallway with people waiting to get in and see them. It's demoralizing to work in an organization like that because basically, whatever that is, it's the opposite of delegation."

As a cofounder of a reasonably sized venture firm, Andreessen doesn't have to oversee large teams or worry about many other schedules outside his own. That helps him delegate when needed, but his task list is manageable enough that he and his assistant, Arsho Avetian, are able to handle most of it through a text-based check-in system, he said.

He adheres to a project management strategy pioneered at Apple that relies on a designated "directly responsible individual," or DRI. That individual is essentially the project manager, but the responsibilities could be narrower or wider in scope depending on the project at hand. If Andreessen is the DRI of any particular project, he said it goes on his calendar because "if it doesn't go on the calendar, it is not getting done." 

But if he's not the DRI, he adds it to a list of projects to track separately so he feels he is up to date on its progress. By checking and updating the text list weekly, he makes sure nothing falls through the cracks.

"As an example, you could have a company raising money or going through a big transaction," Andreessen said. "I don't want to hound the entrepreneur or the CEO every day necessarily but at least want to stay up-to-date on a frequent basis, right? I never want these things to just go dark where you're going 'Whatever happened to that?'"

SEE ALSO: This early-stage VC says startups should resist "toxic'' terms offered by venture investors, even if they have to give up a splashy high valuation in a funding deal

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The IPO market is back after its March freeze. Here's what experts say revived it and where it's going from here.

Sat, 06/20/2020 - 8:27am

  • Initial public offerings froze in March as the stock market tanked. But just as equities quickly turned higher, so has IPO activity.
  • A smattering of IPOs from small, profitable firms "helped build confidence" and revive demand for new offerings, David Ethridge, US IPO services leader at PwC, told Business Insider.
  • The looming 2020 presidential election also creates a time crunch for firms looking to dodge related uncertainties.
  • "I think you're going to see a jam and a lot of companies try to make a move," Kelly Rodriques, CEO of private-equity platform Forge, said.
  • Traditional roadshows and investor interest could look very different when the IPO market emerges from the coronavirus pandemic, Ethridge added.
  • Visit the Business Insider homepage for more stories.

Initial public offerings came to a sudden halt in March as stocks plummeted further into bearish territory and economists forecasted the worst recession in nearly a century.

After a month of near-complete silence, IPO activity roared back to life. Newly tradable firms — and their investors —paid little mind to coronavirus risks and weakened consumer demand. While the IPO landscape mirrored the stock market in its sharp rally, experts think different factors revived IPOs.

The resurgence was never going to be led by one massive deal, David Ethridge, US IPO services leader at PwC, said. It's difficult to find precedent for blockbuster IPOs, and investors struggle with pricing such offerings. Instead, a smattering of IPOs from small and profitable companies gave investors something familiar and broke the ice for other debuts, he said.

"When we look back on it, there were two, three deals in a row there that I think helped build confidence," Ethridge told Business Insider in an interview. "If you could do the see-no-evil, hear-no-evil, speak-no-evil thing and not look at the economic data that's out there, you'd say the IPO market is back."

Others see a time crunch driving the market into a frenzy. Several companies put off their debuts in 2019 after seeing massive IPOs falter in their first days of trading. The pause generated "pent-up demand for IPOs and pent-up supply of companies that delayed theirs," Kelly Rodriques, CEO of private-equity platform Forge, said.

Read more: A 30-year market veteran explains why we're in 'one of the nutsiest bubbles in the history of bubbledom' — and warns of an 'underwater' economy for the next several years

Many of those same firms are now racing to go public before the 2020 presidential election. A change in leadership could usher in new tax regimes and quash investors' risk-on attitudes.

"Now I think you're going to see a jam and a lot of companies try to make a move," Rodriques said. "If you're not going to make one before November, then you better be prepared to stay private potentially for a longer duration than planned given the election."

Ethridge echoed the projection for stronger-than-expected demand. IPO activity is already trending back to an average year, he said, with about 85 expected to be completed by the end of June. An average year yields between 150 to 175 IPOs, placing the US market back on track despite its March slump.

"This is not going to be an '08-, '09-terrible year. This is going to be good-to-very good," Ethridge said. "I do think there's some chance that demand outstrips supply for a while."

Read more: Jefferies created a 6-step process for finding companies that will keep paying strong dividends — and landed on these 20 global stocks as 'rock-solid' picks

Not the father's IPO market

Like most things affected by the coronavirus, the IPO market will exit the pandemic with lasting changes. The roadshows where companies pitch their stock have turned digital. Where one company would spend hours traveling from pitch meeting to pitch meeting, firms have seen similar success hosting a single pitch call and following up with investors afterward, Ethridge said.

"They've had very short roadshows with very high hit ratios, meaning if you had 10 meetings, you got nine orders," he said. "It's very efficient for management teams and for the investors themselves, as long as the investors are willing to invest in a company where they haven't met management face-to-face."

Companies looking to go public are also seeing a pickup in cornerstone investors, or those who had already invested and dip in again during the IPO. The increase in such enthusiastic buyers created "momentum for other people to feel like, 'okay, we should also participate,'" Ethridge said.

Read more: Wall Street's best US and international stock pickers have tripled their clients' money since 2010. The duo break down 5 future-proof companies that could keep investors ahead of the pack through 2030.

The IPO market isn't completely out of the woods yet. Both Ethridge and Rodriques cautioned that the broader market's optimism toward a V-shaped recovery could bite back at firms aiming to go public. Public companies largely pulled forward guidance in the first quarter as they faced down vast uncertainties tied to the coronavirus. A major miss in second-quarter earnings could spark a re-coupling of recession risks with stock valuations, Ethridge said.

For some, the return of stock market risk-taking is enough to soothe concerns.

"Second wave or no second wave, people are trading again," Rodriques said. "As far as IPOs go, yeah, this is going to be an exciting next several months."

Now read more markets coverage from Markets Insider and Business Insider:

Tesla stock can spike another 20% as it extends its lead against rival automakers, Jefferies says

Former Fed economists recommend widening scope of $600 billion Main Street Lending Program

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Financial Services: 6 Key Attributes to Attract Gen Z

Sat, 06/20/2020 - 6:03am

Now the largest generation worldwide, Gen Z accounts for nearly 68 million people in the US alone. As Gen Zers age, financial services providers will be increasingly pressed to shift focus to the burgeoning demographic.

As digital natives, Gen Zers are more receptive to influence from friends and family than traditional advertising. For marketers, strategists, and developers, understanding Gen Z's unique needs — and creating and marketing products accordingly — will be critical to reaping their value.

In Financial Services: 6 Key Attributes to Attract Gen Z, Business Insider Intelligence provides a six-point framework that highlights core traits of the demographic, which banks and payments firms can use to attract, engage, and retain Gen Zers.

This exclusive report can be yours for FREE today.

As an added bonus, you'll receive a free preview of our Banking Pro Briefing.

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