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3 of the Hardest Finance Decisions Startup CEOs Must Make

September 3, 2015 by · Leave a Comment 

When you’re the CEO of a startup, you go through many problems that don’t have one right answer. Also, many of these problems don’t have any perfect solutions. In these scenarios, you must be able to find the best possible solution and move forward. While this may seem straightforward, it’s one of the hardest things to do correctly as the CEO.

An area where this applies early on in a startup is when it comes to how to spend your company’s money. Often, the CEO must think differently than the rest of the team of how funds are allocated. No one is going to obsess about how much is left in the bank like the CEO will, and no one will appear more like Mr. Scrooge.

Below, I’ll share three tough financial decisions that every CEO must make. Early on in a startup’s life, these decisions hold a lot of weight but also are hard to get right.

1. How much to pay your teammates

When you first start your company, you most likely will not be able to pay your early employees competitive salaries. In fact, you may have to pay them in free housing, booze, or whatever else you can find besides money. At some point, you must find the sweet spot of how much you feel is fair to pay someone and how much you can afford. While giving out shares can help, in most cases it’s not enough to get people to go all in. At the least, people want to break even and live in a comfortable environment.

Seems fair enough, until your startup starts running out of money or faces roadblocks. When this happens, it’s natural to try and be more conservative to keep the company going. At the same time, you’ll have team members who after a while will want more money. Give in and you may not have the funding you need to solve the problems your business is going through. Don’t give in, and your teammates may revolt and leave.

The easiest way to solve this problem early on is to take the lowest salary of anyone in your company. As the CEO, you’re most likely having the greatest impact on your business. So if you can live on a lower salary and still have that kind of impact it has a big affect on the rest of the team.

2. How short your willing to make your runway

This is the hardest financial decision you’ll face early on in your company. This is where CEOs must decide if they are either going to be conservative or risk taking. When you raise a round of funding, a major decision you’ll need to make is how long you’re going to make the money last.

As you company hits roadblocks or starts to hit stride, your teammates will ask you to up the burn rate to solve the problem or to grow. But as the CEO, you must know when to say no and be safe or risk it and make the jump.

3. How much you’re going to pay yourself

Every situation is different. If you have a family of 5 and everyone else on the team is single, your expenses are going to be much different. With that said, I strongly advise that as the CEO you only take as much money as you need to get by. And if at all possible, take the lowest. Try to avoid any special treatment or benefits that your team tries to give you early on. Perks will lead to more problems than the benefits are worth.

I know this hard to do because it seems counterintuitive. You’re the top dog, so you deserve the most and the best. There is no problem in having this mentality, but just know it comes with consequences. It makes it easier for your team to separate from you, and it makes it easier for your title to go to your head.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

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The Student Loan Crisis Is Mounting

September 3, 2015 by · Leave a Comment 

Addison Quale writes: “You need a college degree to succeed in America.” This idea has become so commonplace that the right to higher education is now a core issue in most political platforms. What if a young person cannot afford a college degree? The “obvious” answer from politicians on both sides of the aisle is that the government should subsidize them. Very few are brave enough to ask the far more important question: “At what cost?”

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Why The Rally Just Fizzled: Draghi’s "Puff" Was Not Enough

September 3, 2015 by · Leave a Comment 

Zero Hedge

Confused why the blistering rally off the open following Draghi’s uber-dovish commentary has faded? The following note from BMO’s Mark Steele may explain it.

Not Enough Puff


This morning, Draghi adjusts QE to continue to puff up the ECB balance sheet. That’s helpful for global risk markets, but it’s not enough. Globally, the net figure shows central banks are blowing out their reserves;

  • That puff peaked last August – Figure 1 top.
  • Pricing on investment grade corporate credit debt peaked and started to turn lower that same month – Figure 1 middle, and Figure 2.
  • Then finally equities took the blow – Figure 1 bottom.

When mama’s credit market ain’t happy, eventually ain’t nobody happy;

  • That global corporate bond index in Figure 1 is trending lower at an annual rate of 6%/year – Figure 2.
  • Commodities, which didn’t really make it onto central bank balance sheets, have been in a bear market since 2011. They are falling at an annualized rate of 17%/year, and that’s ex everyone’s (yes ours too) focus on crude oil – Figure 3.

So, unless we see a turn in the synchronized bear trends in credit and commodities (and we are always looking), we’ll continue to frame many of our buy ideas in the relative and short-sale ideas in the absolute.


* * *

And this is what next: what goes up on no volume and in lockstep with crude oil, comes down harder and faster and on heavy volume:


With Russell 2000 and Nasdaq in the red now:

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Avoid These 5 Mistakes When Hiring an SEO Consultant

September 3, 2015 by · Leave a Comment 

If your company is considering hiring an SEO consultant, either to assist your in-house SEO team or completely take over the entire search engine optimization effort, there are several mistakes you need to avoid.

Hiring the wrong consultant to take the helm of your search marketing effort can result in a huge mess that is not only difficult to clean up, but expensive as well. A simple Google search will bring up a bunch of consultant options, ranging greatly in skill level, experience and price. Here are five mistakes you need to avoid when hiring an SEO consultant for your company.

1. Hiring a consultant based on keyword ranking promises.

Many SEOs will try to sell you on keyword rankings. They will send you a fancy report every month that shows the position of the keywords, but how important are those rankings if they aren’t resulting in leads, sales and revenue for your business?

Image if you were ranking for two keywords, and one was ranking in the top position and the other was ranking at the bottom of page one. The keyword ranking number one only has 320 monthly searches and it was responsible for converting $1,000 in revenue the past month. The other keyword that’s at the bottom of page one has a monthly search volume of 12,200 and it was responsible for driving $7,000 in revenue the past month.

Would you rather a ranking report that highlights a number one ranking or do you want to know how much revenue your SEO campaign is generating and what your ROI is every month? Keyword rankings don’t matter. Revenue and ROI do. It’s important to work with an SEO consultant that understands what numbers truly matter.

2. Going into the relationship with unrealistic expectations.

SEO takes time. Anyone that is telling you he or she will have your website ranking in a matter of days is telling you what you want to hear in order to get you to sign the contract. An experienced SEO consultant will be able to give you an educated guess as to how soon you should expect to see increased traffic. This varies depending on your industry, competition, goals and strategy.

There are SEO services that promise results in a matter of days and some even guarantee number one rankings. Stay far away from these as they will greatly disappoint you, waste your time and money, as well as put your website in danger.

3. Hiring an SEO consultant based on lowest price.

While a $499/month SEO service might sound good to your accounting department, it’s going to end up costing you much more money in the long-run. When you really dive into what SEO entails you will understand that search engine optimization for a few hundred dollars a month is a pipe dream.

An experienced SEO consultant can charge thousands of dollars a month, depending on the campaign goals and competition. If you can’t afford an experience consultant it would be better to move slowly and attempt to do some of the ground work yourself, rather to hire a cheaper option. Low quality SEO can do severe damage to your website, requiring an extensive clean up effort, costing you more money in the long run than hiring the right SEO consultant from the start would have.

4. Hire an SEO consultant that sells pre-made packages.

There is absolutely no reason why you should be purchasing an SEO package. An effective SEO campaign is 100 percent custom and designed specifically for your website, your competition, your keywords and your campaign objectives. When you begin to search for a consultant you will often find that many will offer different package options, and these cookie-cutter packages are sold to every business.

Do you really think the same SEO strategy that is being applied to a hair salon in Boca Raton is going to be what a car dealership in Miami is going to need? Pre-packaged SEO is dangerous as well as ineffective.

5. Rely only on organic search traffic.

The worst thing you could do is put all of your eggs into one basket and have your company relying 100 percent on organic search traffic. Your traffic numbers could vanish overnight, for a number of reasons. A competitor could outrank you or Google could roll out an algorithm update that impacts your website. No SEO consultant, no matter how good he or she is, can predict what the search engines will do next.

It’s important to diversify your online marketing to include several forms of traffic, including paid search, social media, content marketing and display advertising, just to name a few. When you have several streams of traffic you can make an adjustment to increase the traffic from another outlet if a particular traffic source dries up.

Jonathan Long is the Founder & CEO of Market Domination Media®, an online marketing agency that provides SEO training and online marketing consulting. Jonathan also created EBOC (Entrepreneurs & Business Owners Community), a private business forum. Follow him on Twitter.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

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Indianapolis Colts vs. Cincinnati Bengals: Start Time, TV Channels, Live Stream Info For Last Preseason Matchup

September 3, 2015 by · Leave a Comment 

The recent and unfortunate injury to Indianapolis Colts defensive tackle Art Jones can serve as an example for and against the NFL preseason. Jones went down with a left ankle injury in last week’s matchup with St. Louis, and now surgery appears likely. But for Indianapolis, the timing of the injury comes when they still have a litany of options to replace Jones.

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Stock Market Prepares for the Next Decline

September 3, 2015 by · Leave a Comment 

Good Morning!
After reviewing the charts, I have come to the conclusion that we may be seeing a Leading Diagonal Wave (1) in the SPX and other major indexes. Note that both Waves 1 and 3 fit the [a]-[b]-[c] pattern better than an impulse because of overlap in Wave 1 and the Triangle [b] in Wave 3. We have already seen Waves [a] and [b] in Wave 5 with a large Wave [c] decline to go.

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Refugee Crisis 2015: In Jordan, More Than 100,000 Syrian Students Means Double Shifts For Some Jordanian Schools

September 3, 2015 by · Leave a Comment 

It was back to school this week for students in the Middle Eastern country of Jordan, in a scenario that served as yet another reminder of how the Syrian refugee crisis has left few countries untouched. Syrian students headed back to school alongside their Jordanian peers, with some schools adopting new schedules or creating enormous class sizes to accommodate them, according to a senior government official.

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Countering the Manitoba Menace

September 3, 2015 by · Leave a Comment 

Or, “President Obama, build up this wall!”

From Fox News:

Walker said in an interview that aired Sunday that building a wall along the country’s northern border with Canada is a legitimate issue that merits further review.

Republican candidates for president have often taken a get-tough approach on deterring illegal immigration, but they usually focus on the border with Mexico. Walker was asked Sunday morning on NBC’s “Meet the Press” whether he wanted to build a wall on the northern border, too. Walker said some people in New Hampshire have asked the campaign about the topic.

“They raised some very legitimate concerns, including some law enforcement folks that brought that up to me at one of our town hall meetings about a week and a half ago. So that is a legitimate issue for us to look at,” Walker said.

This is an interesting idea. Consider the distance that would need to be fenced in, or otherwise secured. The US-Canada border stretches over 5500 miles. Merely securing the contiguous 48 border with Canada requires putting barriers over 4000 miles.


Source: Eastwood, “How much would it cost to build a wall on the Canada-U.S. border?” Toronto Star, Aug. 31, 2015.

One estimate places the total cost at $18 billion, using the average cost estimate of $5.1 million/mile. The article cites “a report by the U.S. Department of Homeland Security to Congressional committees in 2009, which examined the construction costs of building fences on the Mexican border in 2007 and 2008.” Since the details weren’t presented, it’s hard to tell if that estimate includes costs associated with design and procurement of the land used for the wall. Other estimates of per-mile cost of building are presented in this Congressional Research Service report (pages 16-24). In addition, there is a maintenance issue, so that the present value cost is much higher than the build cost. From the CRS report:

The Corps of Engineers estimated that Sandia fencing costs per mile would range from $785,679 to $872,977 [in constant 1997 dollars] for construction and $953 to $7,628 per mile yearly for maintenance. Additionally, the Corps of Engineers study notes that the Sandia fence would possibly need to be replaced in the fifth year of operation and in every fourth year thereafter if man-made damage to the fence was “severe and ongoing.” For this reason, in the study the Corps of Engineers noted that the net present value of the fence after 25 years of operation, per mile, would range from $11.1 million to $61.6 million.

To convert to 2014 dollars, one can multiply by 1.48 (the 2014 CPI level is 47.5% higher than it was in 1997).

There are two questions that come to me. The first is the cost-effectiveness of building a physical barrier that impedes pedestrians. I suspect that the benefit-cost ratio is very, very low. The second is whether it’s still a bad idea. After all, spending to build something that is useless is akin to Keynes’s example:

“If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.”

[Book 3, Chapter 10, Section 6 pg.129 “The General Theory..”]

Of course, it would be even better if the spending were on something useful like investment in human capital and the like. However, the Governor seems to have an aversion to such types of expenditures that augment potential output.

The Governor’s original statements were recorded on Sunday. On Tuesday, Governor Walker walked back his comment, as recounted in FoxNews:

“this is just a joke in terms of how people react to things” and claimed he wasn’t talking about a wall.

Given it took a whole day or two for the Governor to determine he was joking, I think we should take the Governor’s Sunday assertion as a true reflection of his views.

On the other hand, I don’t quite have a fix on the Governor’s current views on birthright citizenship; see the evolution of his views tabulated at PolitiFact.

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UK ‘Refugees Welcome’ Movement: Brits Start Campaign To Win Over Prime Minister David Cameron

September 3, 2015 by · Leave a Comment 

The Independent, one of Britain’s most widely read newspapers, started an online campaign this week to encourage Prime Minister David Cameron and the U.K. government to invite more refugees to settle in the country. From the thousands arriving daily in eastern and southern Europe this summer, most fleeing violence and persecution in their home countries, Cameron has volunteered to take a limited number, and the “Refugees Welcome” movement aims for him to accept more.

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The Market Ticker – Just ‘Unfriend’ Me Now

September 3, 2015 by · Leave a Comment 

By Karl Denninger, The Market Ticker

I’m fixing to start pruning back the bushes again…

The latest idiocy revolves around the KY Court Clerk who has refused to issue marriage licenses to gay people, despite being ordered to do so by multiple courts.

There is a meme that started being circulated around social media a couple of days ago which asked “well, if you support her, would you support a Puritan clerk who refused to issue pistol permits because she holds pacifist religious beliefs?

Sounds interesting as a discussion point, right?

No, it’s not.  It is in fact a gross insult on both points that it attempts to raise.

Folks, something that is a right cannot be conditioned on a permit or license.  Both…….

(Click link to read more)

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