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Private Equity and Venture Capital Insights - Spring 2013


A CohnReznick Private Equity and Venture Capital newsletter offering opportunities for improvement and highlighting current industry trends relevant to portfolio companies and prospective investments.

Profitability Management

Is Product Expansion Killing the Profits of Your Portfolio Companies?

Key Takeaways: 

  • Product proliferation can negatively impact earnings and profitability – but there are tools and strategies that may benefit many companies.
  • Companies may improve earnings by "leaning" product portfolios. Cross-functional product pruning teams are often used to lead this effort.
  • Agile supply chain strategies, including quick changeover and postponement, can be used to maintain or increase fill rates at the planned cost level despite demand variability and expanded product portfolios.
     

Industry Insight / News, Ideas, and Observations to Enhance Portfolio Company Operations

Hospitality: What Will the New Year Bring?

Key Takeaways:

  • Hospitality companies may want to consider implementing an operations improvement program aimed at driving revenue through staff training, table optimization, and social media marketing plans.
  • Implementing compensation plans aimed at attracting, retaining, and rewarding key members of management are becoming commonplace with leading restaurant groups.
     

Manufacturing and Wholesale Distribution: The Medical Device Excise Tax: Does It Apply to You?

Key Takeaways:

  • Manufacturers, producers, or importers who sell certain “medical devices” are subject to a 2.3 percent excise tax on the sale of such devices.
  • In general, according to the Internal Revenue Code, a medical device is an item listed with the Food and Drug Administration under a section of the Food, Drug, and Cosmetic Act and is intended for humans.
     

Technology and Life Sciences: Tax Credit May Lower New Jersey Income for Some Investors

Key Takeaways:

  • In January, New Jersey Governor Chris Christie signed legislation reestablishing a tax credit for “angel investors.”
  • The Angel Investor Tax Credit allows up to a 10% credit that can be taken against certain New Jersey taxes for qualified investments in emerging technology businesses.
     

Commercial Real Estate: Need Capital? How Will New Lending Requirements Affect Your Business?

Key Takeaways:

  • A new set of banking regulations are scheduled to go into effect – and they may significantly tighten the availability of capital for commercial real estate development.
  • In this new environment, only the most credit-worthy developers can expect to receive loans from traditional sources – and even they should expect that the response may be a reluctance on behalf of banks to lend for projects downstream in a development portfolio.
     

In Case You Missed It...

Untangled: What the New Tax Provisions Mean to Private Equity

The JOBS Act in the Context of Today’s Capital Markets


 

Circular 230 Notice: In compliance with U.S. Treasury Regulations, the information included herein (or in any attachment) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of i) avoiding penalties the IRS and others may impose on the taxpayer or ii) promoting, marketing, or recommending to another party any tax related matters.

This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
 

 

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