Most of Nitin’s career has been involved with business model changes around disruptive technologies and M&A work in the TMT sector for companies around Silicon Valley. He has developed M&A strategies, conducted commercial/operational/technical due diligence and has assisted with M&A integrations and separations for his clients. He specialises in creating value from emerging technologies and helping his clients prepare and adapt to the next big thing. A veteran with over 1,000 transactions, he specialises in revenue synergies and has also led dozens of cost-focused consolidation M&A deals. His recent work includes helping CEOs, boards, investors and business leaders transform their business models by leveraging disruptive trends and M&A to pivot into new business models, utilising technologies such as SaaS, SDN, blockchain, open source, AI, IoT, AR/VR, drones and voice-enabled devices.

“As a Silicon Valley insider for two decades, it is a fascinating challenge to utilise my business knowledge, network of experts, consulting skills and experience in M&A deals to solve problems at the cutting edge of new technologies”, says Nitin. “I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.”

 What are the current key business and technology trends within the TMT sector?

I believe that today we are experiencing the equivalent of tectonic shifts in business that are primarily technology-driven and are impacting the fundamental ways we do business – and these trends extend far beyond the technology sector. These shifts can conflict with each other, making business strategy more difficult to conceptualise and execute today than it was in the past. Some of these shifts are as follows:

• Product to cloud vs. cloud to edge;
• Centralise (SDN/NFV) vs. decentralise (e.g., blockchain);
• Players who monetised voice are now monetising data (e.g., telcos), while those who monetised data are now monetising voice (e.g., Google, Amazon);
• Brick-and-mortar stores to an omni-channel retail economy, or ‘bricks-and clicks’;
• Closed-source to open-source (Android);
• Human to machine (AI);
• Real to virtual (AR/VR); and
• Building traditional enterprises vs. monetising ecosystems.

Each of these shifts is a transformation that presents an opportunity to get ahead of the game.

There are few absolute rules in this new frontier – companies need a data-driven approach to navigate the complexity, uncertainty and ambiguity, which has become profound over the last few years and is not likely to abate.

Traditionally, technology has served to enable or enhance existing business models or to create entirely new ones. More recently, we find ourselves in a place where there is a developed technology, but the ecosystems and business models around it are taking longer to evolve. Take, for instance, blockchain – here we have a viable technology, but it will take a few years to build scalable business models around it and monetise it. CEOs and corporate think tanks must devise new ways of adapting in such a landscape.

I have built an expansive network in Silicon Valley with TMT sector clients who look to me to help them through difficult business changes, serving as both a trusted adviser and personal advocate.

How is FTI positioned to take advantage of these so-called shifts and disruptions in the market?

FTI is configured differently than traditional consulting firms because we have an expert-centric approach to creating value for our clients. Most of our practitioners have deep industry experience, having operated businesses as executives and in consulting for several years, which has created a lot of credibility with clients and other executives. We are also an industry- and sector-oriented firm and taking a profitability view of the business is a highly valued and impactful perspective for our clients. We not only understand the sector, trends and structural shifts, but can also translate those into meaningful operational and tactical outcomes. Our clients tend to hire us for our expertise and experience rather than to simply add leverage to their internal teams. Given the highly sector-focused approach, we tend to formulate points of view on what is coming next, to ensure our clients are well prepared to adapt.

You have quite an amazing M&A background as well. What are key current M&A trends and drivers in the sector?

There is a lot going on in the M&A world. The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates. While there is some rumbling that M&A is slowing, I think that the big drivers are intact. For one, the US dollar has appreciated significantly against some developing market currencies, and that creates an interesting value discount. The 2017 tax cuts will continue to put more money in the hands of corporates, which will likely fuel M&A activity. The wave around digital business models is not cresting, and companies will acquire or strengthen their capabilities in this space. Incumbents will continue to consolidate to survive and create scale.

All these trends have put pressure on internal M&A teams and external advisers to create more value and to do it quickly. M&A integration has gone through a lot of change, and many professionals have still not adapted to the structural integration aspects and approach it ‘function-by-function’, limiting their ability to create value. There are several industries and sectors where the M&A wave is just starting – the scaling of technologies such as blockchain and AR/VR will attract preemptive strikes from bigger players. Private equity firms continue to be aggressive and are developing some unique strategies for deploying capital and creating value. When you consider all of these trends, I don’t think that M&A activity in the sector will slow down appreciably anytime soon.

The last two years have been record-breaking, with unprecedented deal activity across industries, geographies, private equity and corporates.

How do you go about keeping up with all the trends in the market while continuing to build skills and reinvent yourself?

This is an important aspect that has become critical if you want to stay current, relevant and excel. Learning patterns, adapting and creating value for the entire ecosystem around you is vital when working within this field. Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject. Our clients are very smart people and they have access to a vast collection of materials and resources.

The way I have adapted is by learning from my network. For example, I learned about autonomous driving by speaking with approximately 50 companies across the value chain. By the time I spoke with a couple of dozen players, I started seeing patterns and trends that they were not able to see individually, such as partnership opportunities, M&A opportunities, market needs and disruptive trends.

After you’ve networked, it’s about building insights and getting into more details through targeted discussions around specific areas of autonomous driving. Clients value market insights and trends from external sources as validating. I did something similar with blockchain and IoT previously. One can always dress up their credibility with technical credentials, but this is usually less effective than learning from the field and building insights and skills from it. People are also curious about what others are thinking and doing, hence forming a cohesive, defensible, fact-based point of view often goes a long way.

Gone are the days when one could read a few books or attend a couple of training sessions to grasp a new subject.

It is widely believed that you are one of the most connected C-Level Executives in the TMT sector. How have you built such an impressive network?

Great networks are always built over time. It is easy to make connections, but it’s a lot harder to maintain them. I like connecting with people in general and I like exchanging ideas and facilitating with them – be it making introductions, sharing insights, learning from them, advising them or being helpful otherwise. Not all meetings have to be about getting something out of them – be genuine, take interest, help if you can and I guarantee that will deepen your relationships with them. I always tell people that if your relationships are strictly an outcome of your business, then something is not right, but if your business comes to you as a byproduct of your relationships, then you are doing it right. Remember, it is about the quality and strength of your network – not the numbers. It takes a lot of commitment to genuinely foster and maintain a network as it gets bigger. Your network is like a living organism and it needs to be nurtured in order to strengthen and grow. There is not one magical formula for this; everyone has different styles, but it is important to know what works best for you. The crucial element is to put yourself out there in the field.

You have received multiple awards for pioneering new approaches in M&A – please tell us about them.

The most important outcome is to innovate and adapt – awards are only a byproduct of that but, of course, serve as a validation and recognition of your contributions. Some of my work that has been externally recognised is creating a new framework for delivering revenue synergies in M&A, a new approach to managing M&A from strategy through integration by utilising Wargames - a new and unique way to assess blockchain and understand how to unlock its business model value. Additionally, I am currently working on building a new approach to assess and integrate platforms, which requires a different approach from integrating products or processes. When it comes to platforms, the bulk of value created is outside the company and delivered through network effects. Stay tuned for more on this topic.

How does one go about generating new business in today’s world? Has the approach to sales changed?

I think the best way to sell nowadays is to be visible in the right places, share insights and experiences to create a ‘pull effect’. You can no longer just show up and talk about the services your firm offers and wait for the client to bite on something relevant. More specifically, today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.

Today’s clients judge your expertise by how well you understand their business, trends and context apart from your technical or functional area.

My field is highly relationship-driven – the deeper you know your topic, the more amplification you will get from the network or relationships in order to get referrals. We don’t live in an age of long attention spans. If you meet the CEO of a company in the elevator, speak about business issues relevant to him. If what you’re saying resonates, you’ll have plenty of opportunities later to talk about how great your firm is.

You also sit on boards of multiple companies – can you tell us about them? How do you choose the companies that you join?  

Foremost, I need to genuinely believe in what the company does and that I can really add value. I am always happy to help talented people with my ideas, skills or network. A great idea is unlikely to succeed without great management teams, and resonating with these people is a key consideration for investing time.

I’m also attracted to disruptive technologies that could have a big impact on the business world. Some of the companies that I am a board member of include Pronto, a partner orchestration and automation platform; SmartBeings, an AI based smart speaker focused on enterprises; and Crosby, a blockchain-based asset tracking technology which is unique and differentiated.

What is your advice to CEOs and how do you adapt to changes in today’s world?

• Get comfortable making frequent or sudden pivots. Never get into a comfort zone or be complacent, even when you are ahead of your competition.
• Find builders and give them responsibility, authority and accountability.
• Develop foresight and skillsets to navigate business complexity and strategic ambiguities.
• Move away from intuition to data-driven decision making wherever possible.
• Build ecosystems and develop skills to monetise them. There is no need to own the value chain, but you should learn to have a specific and influential role in it.
• Continuing with traditional approaches will not change much.
• Invest in continuous and fast-paced learning.
• When it comes to the organisation, be agile and respond quickly.

What is your advice to the Management Consulting community on how they should adapt to the changing landscape?

• Understand the changing business landscape and identify your niche, skills required and ways to play.
• Look at ways to adapt your skill set and see how you can create value as the next big thing surfaces.
• It is about constant learning, reinvention and reorientation of your skills.
• Bring data, facts and insights into everything that you do and put yourself out there.
• Your network is a vehicle to engage, learn and amplify your personal brand – reach out to people and create avenues to exchange value.
• Client relationships are for life. Stay engaged and avoid tendencies to move on after your successful project.
• Adapt your thinking from pure enterprise or client to the ecosystem itself – you will discover more ways to add value for your clients.

China's technology industry is developing into a serious rival to Silicon Valley, but there are political hurdles ahead. Bloomberg QuickTake explains how China's tech companies went from copycats to cutting edge, and why the US government is crying foul.

Daniel D. Morris is the Founding Partner of the Silicon Valley, Los Angeles, and Portland (Oregon) based CPA firm, Morris + D’Angelo, which focuses on servicing entrepreneurial families and their businesses. The firm utilises an integrated and holistic approach designed to help customers navigate the most complex and sensitive of matters.

Below, Daniel discusses the impact of Donald Trump’s new tax legislation, as well as the things that make Morris + D’Angelo unique when compared to other tax and business advisory firms in Silicon Valley.

What have been any recent tax policies or reforms in the US and how have they impacted your clients?

In December last year, President Donald Trump signed new tax legislation that changed the landscape of business and individual taxation. Corporate tax rates have been reduced by 40% and initiated a quasi-territorial tax system for corporations. Individual tax brackets have likewise been reduced, albeit only slightly. Individual based tax deductions have been significantly curtailed while increasing allowable standard allowances. Self-employed and associated pass-through businesses in most categories will also see reduced rates.

The most notable challenges the new legislation created are in the international arena. The new provisions created a global tax on intangibles (called GILTI) and imposes an effective 10.5% corporate level tax with the remainder excluded from income under the aforementioned quasi-territorial regime. Global structures owned and operated by individuals, families, estates, trusts, joint ventures, and pass-throughs pay a GILTI at upwards of 37% and do not receive the corporate level territorial exclusion.

This corporate versus individual disparity is creating terrific drama and challenges as advisers and taxpayers regroup their thinking as to how best to navigate global business operations while avoiding excessive taxation.

Morris + D’Angelo reacted swiftly to protect our customers’ options while providing best-of-class advisory and choices. This is an ongoing process as the legislation is so radically different in approach than the previous underlying taxation philosophy that served our country so well for nearly seventy years, that the primary concept we champion is to “hold on and prepare for more changes”.

Tell us about Morris +D’Angelo’s key priorities towards your clients? What differentiates the company as opposed to other tax and business advisory firms in Silicon Valley?

Our priorities are clearly developed around providing world-class services and options to a selected group of customers. Unlike traditional firms that charge by the hour and have a shotgun approach to customer attraction, selection, and retention, we utilise a more sniper-driven process.

Our customers share the following characteristics:

• They are closely held and family driven enterprises, meaning we do not seek publicly held companies, non-profit associations, or most regulated type enterprises.
• They are multi-jurisdictional, meaning they are or will be operating across both state and national borders and they require what we term ‘deep generalists’ that understand the complexities associated with global enterprises and who personally have developed networks of qualified advisers to assist in local matters while having a coordinated professional at the helm of global design, compliance, and outcomes.
• They frequently have family offices where we are the advisers to the family to help them achieve success in their coordinated endeavors.
• They will likely be invested in real estate as developers, landlords, commercial operators, property managers, and similar real property business activities.
• They will be engaged in technology-driven enterprises as investors, inventors, executives, and advisers.
• They will be profitable at levels that can afford our services and where there is ample cash flow to execute enhanced business operations.
• They are awesome people. They contribute to the well-being of their communities, they respect others, they promote good citizenship, and they are pleasant to spend time with. We invest in their success. Accordingly, we avoid toxic personalities.
• We live our famous trademark as we are “Not Just Another CPA Firm”.

What would you say are the challenges of providing effective tax and business advice to entrepreneurial and family-based enterprises?

Challenges, of course, are certainly situational as no two families are alike. The most common challenge is likely gathering their full attention. Entrepreneurs are doers and they are hyper-focused on achieving measurable results and rarely invest in activities that require them to reflect and ponder their futures.

Additionally, there are inherent conflicts among generations in regards to desired outcomes, where to invest the family attention, and the legacies to be fulfilled. We’re also often faced with the, unfortunately, common challenges of blended families due to divorce, or changing demographics relative to marriage and family, and the likelihood of a geographically and/or societally mixed marriage (e.g. mixed religions can create estate and inheritance issues should people of mixed faiths marry, have children, and reside in countries that base inheritance laws on religious attributes compared to for example common law or civil law countries).

On top of this, the availability of information to both the lay and professional person exponentially increases the challenge. While the internet is great for research and ideas, it fails to provide context, wisdom, or judgement. True professionalism integrates knowledge, context, and experience to blend a better result. Accordingly, there are conflicts upon perceptions of what options might be available, in the minds of customers, compared to the conclusions provided by professionals. These conflicts are best resolved by active engagement, communication, compassion, and listening. These are hallmarks of our firm. We leverage both ears before we exercise our one mouth.

What are the most tax efficient structures for US entrepreneurial and family-based enterprises?

This depends on the context of the specific case. For global enterprises, operating in a traditional cross-border CFC (controlled foreign corporation) environment, the most tax efficient structure today is likely a corporation, as it limits the global GILTI tax impact, provides for territorial tax benefits and domestic tax (on domestic earnings) of 21% or less.

For real estate type businesses, pass throughs like LLCs and Limited Partnerships are likely to provide better after tax cash flows due to reduced tax rates on real estate activities and a single layer of taxation.

As for more common business, my advice is to model out their cash flows and determine which of the available models provides the best tax-based results, ease of management and control, long-term family considerations, privacy matters, and asset protection.

I should note that trusts are generally overlooked as an operating vehicle, but they can provide many benefits of ownership along with control, asset protections, and longevity. This is something that our customers frequently consider.

How can entrepreneurs structure their business portfolio in such a way that their personal tax liability is mitigated?

Our recommendation for the families that we advise is to utilise dynastic trust concepts where the trusts are formed in excellent asset protection jurisdictions. These protector-driven trusts mitigate the risk associated with claims, allow for multi-generational transfers, and provide protection for the family’s daily operations.

What are Morris + D’Angelo’s goals moving forward?

Our goals are to continue to expand our offices to more geographies with our targets to include Dallas, Miami, Washington, DC, New York, London, and Geneva. We will continue to grow our cross-border and multinational services dedicated to helping families achieve their goals, objectives, and success. We will remain nimble, flexible, and current as it relates to technology, economics, and governance. Finally, we will continue to have fun each and every day as it makes life easier and certainly more enjoyable.

Website: https://www.cpadudes.com/

About Daniel D. Morris

In addition to his work for Morris + D’Angelo where he serves customers in over 20 countries and 25 states, Dan is also the Co-founder of The VeraSage Institute, a think tank dedicated to helping professionals improve their pricing and customer centric economics. He’s been an author/instructor with professional CPA and related associations since 1998 and has been an adjunct professor for Foothill College located in Los Altos Hills, California. Dan is the only American to hold the prestigious Post Professional Graduate Diploma in Private Wealth Advisory - a programme sponsored by the Society of Trust and Estate Professionals in the UK.

Daniel has served numerous regional and national professional associations (California CPA Society and the American Institute of Certified Public Accountants) where he’s held several leadership positions including President of the Silicon Valley/San Jose Chapter along with the state-level governance council. He is also active in FinTech, including the blockchain and associated crypto currencies and is frequently interviewed by regional and national publications.

About Morris + D’Angelo

Morris + D’Angelo’s registered trademark is Not Just Another CPA Firm – and this really is the case! The company never charges clients by time incurred, but instead, they price for purpose which ultimately means that the customers pay for the results they’ve managed to achieve.

The firm was founded in the Silicon Valley in 1994 and over the years, has helped startups and entrepreneurs that have changed the world. The team at Morris + D’Angelo listens and understands what their customers want and need and strives to deliver results in abundance. Along with the company’s physical offices, Morris + D’Angelo has a personally crafted network of affiliations throughout Europe, Asia, Australia, the Caribbean and Latin America. The firm coordinates services in a timely basis in nearly every location that deliver results that are instrumental for success.

While Apple reportedly struggles to get the iPhone X off its feet and into the market, stumbling on obstacles it knew would come about, such as developing proper facial recognition and delivering on its aggressive production schedule, global stock markets are fluctuating on the back of several factors, from the disastrous hurricanes to bad European weather and Brexit talk. Black Friday, Cyber Monday and Christmas are still ahead of us however.

Here Lee Wild, Head of Equity Strategy at Interactive Investor, provides an overview of the current global stock economy, as US markets and Japan’s Nikkei put London into perspective:

“The mood on many global stock markets might well be described as exuberant, but not irrational. Yes, it took less than six weeks for the Dow Jones to add the last 1,000 points to top 23,000, but latest US company quarterly earnings are beating expectations - look at IBM's fightback overnight - and president Trump's tax plans could still deliver a boost to the bottom line.

“Japan's Nikkei has just hit a two-decade high, but exports there have risen for a tenth straight month amid demand for Japanese technology.

“That puts what's happening in London into perspective. Investors are right to be concerned about a recent spate of high-profile profit warnings, and Brexit presents its own set of special circumstances, but many companies are delivering strong results and valuations are not excessive.

“Of course, the market will correct at some point. Chatter has picked up in recent weeks following profit warnings from blue-chips GKN, Mondi, ConvaTec and Merlin, but this bunch are not a fair indicator of the market as a whole.

“Unilever's highly-rated shares have come off the boil as bad weather affected sales of its Magnum and Ben & Jerry's ice creams in Europe during the third-quarter, while hurricanes in Florida and Texas held back the Americas. However, underlying sales in emerging markets still grew 6.3% and volumes were up. With just a few months of the financial year left, annual group underlying sales are still expected to grow 3-5% and profit margins improve.

“Don't be surprised to see a pullback between now and Christmas in some markets which have raced ahead this year, but it's unlikely to be the crash everyone is predicting. While inflation is currently outstripping wages growth, the UK unemployment rate is at its lowest since 1975 and any small rise in interest rates will not pull the rug from under this market.”

Blockchain will disrupt everything from Silicon Valley to the New York Stock Exchange.

Every year we see more and more up and coming golden eggs in the tech sector, so we thought we’d bring you a quick round up of what to expect for 2017, authored by Ben Little, co-founder Fearlessly Frank.

From the Silicon Valley to our Silicon Roundabout here in East London, new tech businesses are launching daily, each with a huge ambition to replicate the success of recent companies before them. When someone describes their business as “It’s like Uber, only for [insert category]” or “AirBnB for [insert audience demographic]”, hidden in the description is “It’s going to be big”, because the truth is that it could be.

We live in a time full of opportunity: not since the industrial revolution has there been the right conditions for the ‘new’ to overpower the ‘old’ and for growth to be achieved with such amazing speed, as seen with companies like Uber and Airbnb. However, although the conditions are right, the truth is only one in thousands will achieve the success of these amazing businesses, making them very rare and quite fascinating. It’s not surprising we’ve begun calling them unicorns, because they are.

1. Turo is the Airbnb of cars. Anyone who’s been through the hassle of renting a car will appreciate how Turo lets you rent a car wherever and whenever you want. But it’s also a business putting money in the pockets of car owners who don’t need their vehicle every day. 38% of urban residents could easily imagine living without a car, which makes sense since in major cities the cost of congestion to individual households is over $4000 a year. The fact remains though that cars are still incredibly useful at certain times, so peer-to-peer car sharing is surely the next big place for disruption in the automotive space. 2017 should be a big year for Turo.
2. Everyone is talking about VR but these guys 8i are going deeper. We think there is a good chance they are going to make it onto the unicorn list this year. 8i specialises in volumetric human capturing and is building an agnostic platform for creators to build their own content on – so this is VR going beyond gaming. Co-founder Linc Gasking says it’s all about the human dimension. They’re from New Zealand but have expanded to LA and San Francisco. Looking forward to seeing them everywhere else in 2017.
3. With all the news around the pressure the NHS is under, and Trump throwing out ObamaCare, is 2017 the year of the tech MD? Technology enabled healthcare solutions have been around for a while, but perhaps people are now more willing than ever to give them a go. Companies like Babylon Health promise to connect you with a doctor in minutes. With amazing AI and bot technology on the rise, people will be able to seek immediate healthcare advice at the touch of a button. It isn’t surprising that the NHS has been quick to partner with them: the BBC said it was “…as easy as ordering a cab on your phone”. Uber for your GP sounds like it has unicorn potential to me. The question will be how they take an idea like that to market. It won’t be cheap, but the upside could be a totally new way for people to seek the help they need.
4. Vero: The unicorn club has never been complete without a social network or two, Snapchat being one with its recent IPO filing revealing that the company grew revenues by 600% to $404 million in 2016. But it’s an industry that’s growing up quickly. It’s strange to think that an industry only formed in the last two decades could be ripe for reinvention, but the big five - Facebook, Instagram, Twitter, Snapchat, Pinterest, are no longer networks, loved and celebrated by the users, but instead are media channels structured to serve up intelligent advertising solutions for brands. Perhaps a percentage of the billions of us who use social media sites might well be interested in trying something new, where the user is put first and their experience and data is protected. The rapid introduction of Snapchat and Instagram into a market we all thought was saturated proves it’s possible. Some have recently tried and failed. Yubl, the social messaging platform that was like Snapchat combined with WhatsApp, had a hugely successful fundraise but sadly couldn’t sustain the investment needed to compete in a tough market. One contender we have been working with could however: the next generation social media platform Vero combines privacy with ease to create a strong user experience that also doesn’t require advertising to make it profitable and grow. It’s less of a media platform and back to the basics of a social network with all the makings of a unicorn… watch this space.
5. Faradion: One thing holding back the entire smartphone industry is the electric battery. These guys in Sheffield recently picked up some investment that will help them scale. Perhaps Samsung’s $3.1B loss on exploding batteries will turn up at Faradion, who are 25% cheaper than current batteries. 2017 should be big for sodium-ion battery tech.

Entry to the Unicorn Club is getting harder. Imagine the next generation of companies existing on a tree of opportunity, the successful companies powering their way into the club have been the low hanging fruit. The next generation of unicorns are going to have to think bigger and aim higher.

The environment that has made start-up success so possible, has now entered the mainstream - big businesses know they need to innovate to survive. If these companies can adopt the behaviour of these successful startups, be willing to enter a parallel universe to try new things and keep both businesses a success - anything is possible.

When you hire well, be daring and have the resource and funds to do it, new insights and ideas can come from dab hands and entrenched brands.