2019: The Year of Tech & Mindfulness

Let’s face it, the Consumer Electronics Show (CES) is far from the picturesque Vegas scene we all see in our colleagues’ Instagram stories. Replace those fancy drinks and fun VR excursions with jet-lag, long lines, three hours of sleep, stress filled meetings, and missed calls from work and then maybe, just maybe, you’ll have a better idea of what CES looks like.  

But here at FastPay, we don’t sugar coat things… We know what it’s like at CES for our clients, channel partners, and potential prospects within the space. The media buying season is always on and new, emerging trends in both consumer and advertising technology are so rampant it’s hard to stay ahead of the game.

“Even in my twelfth year of attendance, I’m still amazed at how brands are reinventing the space with the use of integrated technology to engage with consumers in meaningful ways,” said Rick Weir, VP of Marketing at FastPay.

With all of this in mind, we knew we had our work cut out for us, which is why we hosted a Drybar event for select female leaders within the space to relax and unwind before the storm hit. Not only were these influential ladies able to get a blowout before important meetings, they also had the unique opportunity to connect and share insights into their ever changing worlds, something you don’t find at CES everyday…

FastPay Drybar at CES Post

“With the sensory overload that comes from CES, it’s difficult to stop and have a meaningful conversation so we wanted to create an experience where women felt comfortable enough to share their insights and advice with other empowered ladies in the space,” said Maytal Shainberg, SVP of Business Development and Origination at FastPay.

We are so happy we could be a part of the zoo that is called CES and connect with such amazing women! If there’s one thing we can all learn from this year’s CES, it’s that human connection can never be replaced.

Webinar Recap: Learn How Suppliers Can Optimize Interactions with Agency Finance

On Wednesday, FastPay participated in a webinar hosted by the BCCA… the media industry’s credit association, titled, “How credit can interact with agency finance departments more efficiently.”    

David Frogel, Chief Strategy Officer at FastPay, delivered the webinar to an audience of media suppliers covering some common issues and perceptions about media agencies. Frogel, a former COO/CFO of an advertising agency, shared with the attendees his insights on what goes on behind the scenes of an agency finance department and suggestions for media suppliers on how to optimize interaction with an agency. Specific supplier suggestions included:

  • Use EDI whenever possible
  • Understand how an agency treats duplicate invoices
  • Ensure invoices include critical header details, especially estimate and order
  • Consider payment portals and accept electronic payments
  • Explore solutions that streamline/centralize transactions
  • Pick up the phone!

The event concluded with Frogel’s thoughts on the future and Q&A from the audience.  

“I learned a lot about collaborative relationships between agencies and suppliers when I was a COO/CFO of an agency. It starts with willingness to change and considering industry platforms that will deliver greater efficiency and reduce friction for both parties,” said Frogel.

Special thanks to our friends at the BCCA… the media industry’s credit association for hosting this webinar. A full recording of the webinar can be viewed here.

FastPay Names Michael Wehner as General Manager and Senior Vice President of Payments

Media Industry Veteran to Define Payments Portfolio Go-to-Market Strategy and Drive Innovation

Michael Wehner SVP Payments

FastPay announced today that Michael Wehner has joined the company as General Manager and Senior Vice President of Payments. In this position, Wehner will have responsibility for FastPay’s payments portfolio, including managing sales, development, and growth, and overseeing expansion of solutions for media agencies and suppliers. He will be responsible for defining the payments go-to-market strategy and driving innovation through strategic customer engagements. Wehner began his new position as a member of the executive team in December, reporting to Jed Simon, CEO and Founder of FastPay.

Wehner joins FastPay from the Rubicon Project, a digital advertising infrastructure company, where he was Senior Vice President of Agency & Brand Sales. At the Rubicon Project, Wehner was responsible for building out the agency’s strategy and global team, while working closely with global buying partners. Prior to Rubicon, Wehner worked at Microsoft where he led the global strategy for Media & Entertainment, before moving to the company’s advertising division. Before then, Wehner held sales leadership roles at IBM and Yahoo. With more than 20 years of sales and business development experience in digital media, Wehner has a track record for driving revenue growth by delivering integrated technology solutions to media companies.

“Michael brings significant media industry expertise to FastPay, which will support the rapid growth trajectory of our payments portfolio,” stated Simon. “He brings the ideal background needed to understand the complex, ever-evolving media landscape. We believe his proven track record will help expand FastPay’s payment solutions in meaningful ways for both agencies and media suppliers. His leadership skills will help accelerate and manage FastPay’s tremendous current growth and growth potential.”  

“FastPay’s market potential is virtually unlimited, and I’m looking forward to helping the company bring its innovative solutions to the media industry, so we can offer clients greater payment speed, accuracy, and control over their payment operations,” said Wehner. “Today, U.S. media payments total more than $200 billion annually. The FastPay platform delivers the ability to automate a significant portion of those payments, while giving media companies more productivity and the cost savings they need to remain competitive.”

Raised in Rochester, New York, Wehner now lives in New York City. He holds a BA degree in Computer Science from the Rochester Institute of Technology.

FastPay Celebrates Crossing the $1B Threshold at AAPC Regional Conference

On December 5th, FastPay was a key sponsor of the American Association of Political Consultants’ (AAPC) 2018 Austin Regional Conference. The day was anchored around Texas post-election discussions from Democrats and Republicans, along with a featured keynote from one of our customers who worked on the Ted Cruz campaign. Naturally, the phenomenal election year media spending was a hot topic.

At the event, FastPay networked with attendees, discussing our media payment solution, FastPay Political, which was created specifically for buying and selling political media. We also shared news of our recent milestone — crossing the threshold to over $1 billion in political payment transactions.

The FastPay milestone follows the trajectory of the 2018 mid-term election cycle. “Overall, the 2018 midterms had the largest midterm election spend ever,” according to OpenSecrets.org. “The total media spend was reported at just over $5.2 billion. The CRP estimates it to be a 35 percent increase over 2014 in nominal dollars.”

The major advantage that FastPay political media clients gained was sending payments at any time of day, with no cutoff times or FedEx deadlines to consider. This was a significant benefit for agencies, considering the unprecedented volume of spending that was occurring. Also, thanks to the efficiency, flexibility, and speed of the application, they could take on more campaigns and candidates during this cycle, allowing them to do even more business.

“The 2018 elections were the most successful cycle for FastPay since 2014,” said Michael Wehner, GM/SVP of Payment Solutions at FastPay. “One client told us that thanks to FastPay they were able to devote more time to their clients and less time worrying about getting payments out the door. It’s great validation to hear how our solution is helping agencies provide better service to their clients.

“We’re happy our team could share our company’s and our clients’ success this election year with the attendees at the AAPC gathering. It is the perfect opportunity for people in the political industry to share best practices. We are proud to support the organization and its members.”

NY Roundtable Recap: Growth Capital and Exits in Digital Media

In partnership with Fox Rothschild, Attorneys at Law, FastPay hosted a NY roundtable discussion with managing directors from KPMG Investment Banking Group, Eastward Capital, and Quake Capital Partners.

The panel discussion was centered around Growth Capital and Exits in the Digital Media Space and included CEO and Co-Founder, Anne Kavanagh, of Steereo, who just completed her first-round equity raise.

Together, the panel navigated the challenges that go along with raising capital, managing a debt stack, and selling a company.

Below are some highlights and thoughts from the panel:

Raising Capital

The panel emphasized the importance of evaluating your needs when choosing capital. Amy Coveny, Managing Partner at Quake Capital, expressed the idea that founders should only take VC money if their business model is repeatable and ready for scale. She also explained how important it is that founders do their diligence on their investors. Referrals from past companies that have been both successful and unsuccessful are equally important.  

Chris Bodnar, investment partner from Eastward, highlighted how many financing options are available to companies today. He explained that this is a relatively new phenomenon and founders should take advantage of these new resources. Chris also highlighted the effectiveness of receivable financing as a resource far cheaper than dilution.

Conclusions:

  • Don’t give away equity if you have a strong balance sheet. Debt is always cheaper.
  • If you need to scale and grow quickly, identify investors who will give you more than just a check. You should expect your equity partners to add value!
  • Choose investors who work with companies you could partner with.

Managing Debt Stacks

In this segment the panel touched on the importance of good communication between capital partners of a company. Chris Bodnar shared his experiences on effective pairings between receivable and term lenders. He explained how pairing facilities like this can be beneficial for all parties involved, and bring down the overall blended cost of capital. Chris encouraged founders to facilitate meetings between their different capital partners in the mutual interest of seeing the company succeed.

The panel also agreed on the importance of not over-borrowing, maintaining a clean cap table, and maximizing runway.

Conclusions:

  • You can effectively pair a receivable lender and term lender through good communication! This will ultimately bring down your blended cost of capital and help the company remain liquid.
  • Be careful when raising money, don’t over borrow. Receivable financing is a great way to avoid a messy cap table and streamline operations.
  • Be careful of traps! Higher valuation offers may seem more attractive on the surface but often have caveats that make them more expensive in the long run.

Exit Strategies  

In the final segment, the group turned their attention towards exit strategies. Roddy Moon of KPMG stressed how important it was for companies, looking to exit, to hit their KPIs. He explained that missing projections in the quarters leading up to a sale can have a drastic impact on valuations and that CEOs should be mindful of this when beginning exit negotiations. Roddy also went on to say that founders should not try to time the market on an exit, but evaluate based on company specific conditions. Roddy finished with an overview of the M&A landscape, adding that the market continues to remain robust headed into 2019. The panel agreed founders should speak with multiple firms before picking an advisor to guide their exit.  

Conclusions:

  • Pay attention to how much capital you’ve raised.
  • Hit your numbers. Don’t miss your KPIs when looking to exit.
  • Don’t try to time the market on an exit.
  • M&A markets remain robust. Hire the right advisors, do your diligence and speak with multiple options before picking an investment bank. Smaller boutique firms may be less flashy but offer good value!

Thank you again to everyone who participated in the New York FastPay Roundtable!

Boom or Bust?  Marketing and Ad Tech Investment Dollars Projected to Fall 75% in 2019

According to a recent Forrester research report, investment dollars for marketing and ad tech startups are expected to fall 75% in 2019. This should come as no surprise in an industry that has seen tremendous growth in recent years from what seems like a never-ending stream of both advertising dollars and rounds of capital from hungry investors across the globe.

Marketing and ad tech consolidation is happening every day as larger media, tech companies, and agencies acquire new platforms and niche companies from across the ecosystem to bring order in the still overwhelmingly complex ecosystem. Ultimately, these companies are trying to help marketers reach the right customer, at the right time, and across any device with the ability to measure the impact. Terms like AI, VR, and blockchain have replaced big data, omnichannel, programmatic, and native as the new buzzwords helping some gain an edge over others.

Companies with proven technology, established revenue streams, and sound business strategies will continue to thrive despite fewer investment dollars. Other startups may have joined the party too late, already burned through several rounds of funding, or shifted their business strategies and are destined to become footnotes of history in one of the most booming sectors since the dotcom craze.

While the marketplace will ultimately pick the winners and losers, FastPay continues to provide capital for media and tech companies with proven business models.

FastPay recently partnered with ad tech platform, VideoAmp, because of their unique offering and position in the market. According to VideoAmp CFO, Tom Schmitt, “Our partnership with FastPay allows us to accelerate our investment in strategic elements of our business and gain market share in a dynamic environment. With FastPay, we’re able to double-down on our product investment, making our customers and investors incredibly successful.”

FastPay has multiple lending sources to help inject capital, while not diluting equity investments for clients. “Our rich analytics and deep industry expertise allow us to provide our clients more capital than banks and generic providers. Unlike traditional lenders who are becoming more and more conservative, we continue to lean into the industry and not shy away from it,” stated Maytal Shainberg, SVP of Origination and Business Development.  

As the marketplace continues to mature, FastPay’s collective experience and network of industry relationships will continue to help clients navigate media and tech’s complex financial ecosystem.

LA Roundtable Recap: Debt vs Equity

Debt vs Equity Roundtable

 

On November 15th, FastPay hosted a panel on the topic of Debt vs Equity, moderated by FastPay’s own, David Bensimon. In partnership with Gunderson Dettmer, the panel featured four industry experts, and the room was filled with thought leaders looking to gain insights on how to grow their companies and network with peers over breakfast. Below is a quick summary of the event:

Debt vs Equity Highlights

  • Take debt when you can
  • Raise equity – two schools of thought:
    1. Be careful not to raise too much too quickly
    2. Raise money now, because you don’t know when the bubble is going to burst

Debt vs Equity Roundtable

Debt for working capital. Equity for growth.

Lori Murphree, of Diamond Capital Advisors, shared that “debt is cheaper at the end of the day, most people don’t realize that. If you’re going to sell your company for hundreds of millions of dollars, do the math!” She also mentioned, “you always want an AR lender that you can use for working capital. If you are going to raise equity, try to raise some debt to go with it.”

17 percent of $100MM > 100 percent of $1MM

There are things to be careful of when taking on Venture Capital, including being aware of how much ownership of your company you are willing to give up. Laurent Grill, of Luma Launch, said if you partner with the right VC and have a good growth plan, the goal of taking on VC money is to grow rapidly. As long as you don’t mind giving up control, “17 percent of a hundred million dollar company is better than 100 percent of a million dollar company.”

Venture funds -> Revenue growth

Matthew Levin, founder of automotive publishing company Donut Media, suggested, “have a plan in place before taking on investment… [As a content company] we have faced the unique challenge of balancing both growing our audience and financing the business.” He advised founders to think about: “the right time to take on equity and how that equity returns audience size that will ultimately turn into revenue.”

Tips to raise money

Founders should be networking with potential investors months before they are actually looking for funding. Dulari Amin, of Synergy Ventures, gave insights on what founders should do. “Talk to your mentors, professors, your army, anyone who has good connections and can bolster your credibility factor and get you in the door with a known VC in town. They can help introduce you to potential investors.”

Stay tuned for more tips from FastPay!

Coming To America: Grow Big or Grow Home?

Coming To America: Grow Big or Grow Home?

Last week saw the great and the good of the adtech world descend on The Ivy to share the lessons and scars of US expansion.

Hosted by yours truly at FastPayBen Titchmarsh of Propeller PR guided a panel of fantastic industry spokespeople through an advice-led discussion that followed the growth of a hypothetical adtech firm from inception to US expansion and exit plan.

Adam Ludwin of Captify and Abeed Janmohamed of Volando provided the ‘been there done that’ point of view as founders that have successfully established US bases, whilst Mark Williams at Results International did a sterling job of detailing the nuanced differences between UK and US investor attitudes. For those confident they are in the right position to make the jump across the Atlantic, we had some interesting takeaways…

US venture capital isn’t compulsory for US success

Many founders feel that a big valuation from US VCs provide the answer to their problems, yet this can be disheartening when many Silicon Valley investors want to see triple digit growth before they even bat an eyelid. With East Coast funds zoning in on double digit growth, European funds remain an attractive option. As ever, finding a venture capital partner should always come down the money involved and who you trust.

Founders must not be put off by overconfident US competition either. It was post-Series B for Captify (around £8 million), when a US competitor with £50 million in the war chest came over to compete. It wasn’t long before said competitor shut up shop as the technology wasn’t quite there.

Before rushing off to new locations, Mark advises that it’s vital to make sure the home market is stable. The cost of expansion is often underestimated; overconfidence can often lead to executives not building in failure and re-hiring staff to the plan.

You can’t enforce culture

We all speak the same language, but the US can a big culture shock for British entrepreneurs. Adam needed to overcome Captify’s Britishness when opening Captify’s US office, and found they nailed the culture when the balance of British to American staff was about three in 10. It takes time to nurture culture and nobody cares if you’re the hottest thing in Europe – you’re a start-up all over again in the US.

On the money front, $1m doesn’t even make a dent in sales and marketing, with salaries averaging at double compared to the UK.

Stateside, investors have a different mentality too. Whilst European investors are poring over EBITDA, out in the US, culture plays a big part and belief in a founder’s vision can often trump pure financials. They back teams and often ‘bad tech, great team’ wins out over ‘good tech, shit team’.

Preparation is key – exhaust all options

What came across loud and clear from our founders is the old adage of failing to prepare is preparing to fail. US expansion is not something one should rush into. Deals in adtech have decreased and it’s now about established businesses positioning for an exit. There’s still a diverse range of potential acquirers including broadcasters, telcos, agency networks, consulting firms and private equity. As with any move, US expansion should only ever feed into an overarching growth strategy.

The panel agreed that founders should exhaust all debt options before diving straight into equity. However, for companies that have already secured investment, debt can also complement equity by providing cash flow solutions without further dilution of ownership. Debt is much more cost effective in the long run and faster to obtain – Abeed and Adam both highlighted the sheer time commitment involved in campaigning for equity raises, and if founders aren’t careful this can impact on the day to day growth of the company. With debt options, the finance team can apply for a loan or alternative finance pretty easily. When you consider that payment terms in the US are even longer than the often stretched timeline that vendors face in the UK, it is essential for founder to factor in working capital solutions early on to ensure success.

Longon-Roundtable-Oct-2018

Follow The Money – Political Ad Spend Heating to Record Levels With 50 Days to Midterm Elections

In today’s increasingly heated midterm elections, advertising spending is also heating up — and the dollars are being spent in surprising areas, say leading political media reporting organizations.

According to Borrell Associates, spending in 2018 is 6.5 percent higher than in 2014, with total spend estimated to be $8.8 billion versus $8.3 billion in the previous midterm elections.  

What’s more, digital is not king, despite massive growth during the last two cycles. Broadcast and cable are capturing over 50 percent of all political media revenue. Online and digital account for 20 percent. Often overlooked print and radio advertising fall in at 8.1 and 7.7 percent respectively.

The breakdown continues with $2.4 billion predicted to be spent on broadcast TV ads, including House, Senate, and state and local office races — a 14 percent increase from 2014, according to Kantar Media as reported by Bloomberg. Further, campaign spending on local cable TV ads will grow more than 40 percent to $850 million. Expenditures for Internet ads will more than double to reach $600 million.

More than half of political spending will be local — state level or below. In fact, Borrell advises media and consultants to understand local audiences, so they can deliver highly targeted matching of ads to audiences.

To help media take advantage of the increasing midterm political spending, FastPay provides several critical capabilities that support automated delivery, receipt and processing of prepaid political advertising payments.

Because FastPay is designed for the media industry, its proprietary technology serves its unique payment needs — including reducing the risks of political ad payment delays and discrepancies. As an added measure of assurance, the FastPay services team follows up to ensure payments are processed in advance of airing ads on TV, cable, online, digital, radio and print.

FastPay further reduces payment risk by offering the ability to automatically populate payment portals with billing information versus relying on human intervention and risking potential payment errors and delays.

While the political landscape is bound to become increasingly volatile up to November 6th, 2018, paying for political advertising along the way doesn’t have to be.

Scripps Plans to Unload Radio Stations: How Will This Impact Your Supplier Payment Destinations?

Last week, E.W. Scripps Co. announced it has agreed to sell the rest of its radio stations to its final buyer SummitMedia. This allows Scripps to exit the radio business after selling all 34 of their radio stations to four distinct buyers.

The announcement is consistent with broader trends in the media industry such as Sinclair’s attempt to buy Tribune, AT&T’s acquisition of Time Warner, and Discovery’s merger with Scripps Network Interactive. In fact, the first half of 2018 saw more than $300B in mergers and acquisitions announced between media companies compared to just $60B in all 2017.

FastPay’s services team tracks the station group hierarchies for over 60,000 media owners and all ownership changes and all resulting payment policy changes.

For FastPay clients, we proactively monitor such activity to ensure that all supplier payments are issued efficiently and directed to the proper destinations and recipients 100% of the time.

“We have an established infrastructure and seamless process to manage all industry ownership and policy-change events. Whether there is a merger, acquisition or supplier payment acceptance criteria change, FastPay manages all such changes on behalf of our clients,” says Christine Rose, SVP of Client Management.

As further consolidation and new ownerships are finalized, there are likely to be many changes to manage for media finance departments. How will your organization handle 100’s of payment destination changes?