The Other Woman

| FROM THE PRINT EDITION |
 
 

The Other WomanI'll never forget the look on my husband's face when he held Betty for the first time. Cradling her almost reverently with a sparkle in his eyes and a childlike sense of wonder, Jim examined every facet of her sexy, smooth skin to ensure she was flawless and virginal, as promised. It was the way he used to gaze at me.

He spent days researching Betty's numerous talents and learning how to best use and care for her. She was sleek, with smooth curves, a vision of perfection. She sang to him, dazzled him with sports trivia and kept him abreast of the latest news. Betty filled my husband with excitement, mystery and wonder. I, on the other hand, was merely human.

Though I had Bruce-my own BlackBerry-I was jealous of Betty. She was an upgrade, a Storm, and she offered Jim much more than I could. When she first moved in, Jim often disappeared to be alone with her. He'd explore her features and wipe off his fingerprints afterward so I wouldn't know where he'd been. Then he started bringing Betty to bed. While I watched late night TV, he caressed her, learning all of her idiosyncrasies while she chirped with delight. I seethed with jealousy. Jim claimed he needed Betty near him 24/7 because he was on call, but I knew better. I could not compete.

He tried, perhaps out of guilt. We were newlyweds, after all. Before going to sleep, Jim laid Betty on his nightstand, trying to put her out of his mind, but the little vixen would not be ignored. She flirted with my husband with her winking red and green lights and her seductive purr.

Trying to ignore her siren song, I'd roll over and stare at Bruce. He was attractive, a bit older and thicker, but he got the job done. He was mine and I loved him. Bruce was fun and as comfortable as an old shoe, but he and I just didn't connect the way Jim and Betty did. Bruce wasn't... alluring. He tried to make me feel wanted; he'd blink his single red light at me and beep his single note. But it wasn't enough. And Betty wasn't letting Jim go.

I wanted to captivate him the way Betty had. I wanted Jim to leave her in his office when he came to bed and to look longingly at me when he discovered one of my new skills or talents. I knew I could fill her shoes. I could be Jim's personal assistant, update him on the latest sports and weather, post to his Facebook profile. He didn't need Betty.

But first I had to put Betty in her place. I considered the obvious-hiding her in our compost pile, accidentally flushing her down the toilet, tossing her from the 520 floating bridge-but I knew those methods wouldn't work. Jim would just replace Betty with a newer, sleeker model, a Marilyn, a Roxanne, or a Vanessa.

Instead, I needed a more subtle approach. I had to wean Jim from Betty. I started texting him to say, "i love u," e-mailing useful web links to him and flirting with him on Facebook. I silenced Bruce during dinner and turned him off at night. I even laid Bruce next to Betty one evening, hoping they'd hit it off. (They didn't. Bruce thought she was too superficial, and Betty thought he was just too old.) I even left Jim's browser open to a page on virulent BlackBerry viruses.

Gradually, as often happens, the shine began to come off Betty and Jim started spending less time with her. He'd leave her on the counter when he left the room, and he silenced her when we spent time together. I knew I'd made progress when Jim turned Betty off during date night. He thought I was crying at the end of Gran Torino, but I was secretly rejoicing.

Some things haven't changed. Betty still comes to bed with us, but I'm the one Jim holds. I just hope Bruce doesn't get jealous, either of Jim or this hot little iPhone 3GS I have my eye on....

 

Looking for high investment returns? Consider investing in a family business.

Looking for high investment returns? Consider investing in a family business.

 
 

Investors do not lack opportunities to deploy their capital, but being able to generate respectable returns is much more difficult. Part of the problem is finding unique investment opportunities with significant upside in a crowded market. The best option may be to put money to work in a privately-held company.

But private companies pose challenges when it comes to understanding their business, and analysis of the company may be fraught with pitfalls. Or it may be that investors are simply not aware of the opportunity in the first place.

There is, however, an important trend that is clearly discernable in relation to family-held businesses. Wealthy families and individuals are increasingly attracted to the idea of providing capital directly to family businesses as part of their overall investing strategy. And the attraction is reciprocated – family-owned businesses are increasingly open to the idea of wealthy families and individuals providing capital.

At Cascadia Capital, we are seeing a rapid increase in the practice of families investing in families, which can be a highly effective solution for both businesses and investors. Family businesses can be attractive investments, particularly for other family businesses, private companies, individuals, or family offices, which are wealth management companies investing on behalf of a single family or individual. Family run businesses often employ management styles that these investors understand well and can offer portfolio diversification without the hefty fees charged by private equity funds and investment firms; fees that, over time, can add up to millions of dollars.

According to a recent survey by the Family Office Exchange, about 70 percent of family offices now pursue this strategy of direct investing. This may be, in part, due to a shift by family offices seeking to bypass layers of fees and a lack of transparency and control that are inherent to the private equity fund model. Instead, many family offices now prefer to invest directly on a deal-by-deal basis offering more direct control, additional flexibility for longer-term holds, and lower fees. 

From the perspective of family businesses, a significant number are considering alternative solutions to meet their strategic objectives. In the event of a sale, an acquisition by another family can be a compelling solution compared to a private equity or strategic buyer transaction. And when seeking financing for business activities, direct investments from family offices can offer significantly more flexibility than funding from private equity firms that are beholden to rigid criteria and fixed investment periods.

 

The benefits for family businesses of having a direct relationship with their investors or buyers can be numerous. For example, if a family is looking to sell its business, family office buyers can provide liquidity and the opportunity for owners to exit without having to sell to a competitor. If a family is looking for additional financing to fund growth, direct family office investments can offer more favorable terms than other traditional sources of financing.

 Importantly, wealthy families and individuals are more likely to take a long-term view of their investment and are not constrained by exit strategies devised to maximize value within a given time period. Further, these investors often made their money owning and operating successful companies and, as a result, are more likely to understand the nuances and unique challenges of family run businesses. 

This investment trend, while also being experienced in other parts of the country, is gaining momentum in the Pacific Northwest. We are increasingly finding private direct investments to be an effective solution for our family-owned business clients and our family office clients.

Choosing the right investment partner is one of the most challenging decisions a family business can make. We have worked with many private, family run businesses to design long-term, flexible capital solutions and introduce our clients to suitable family office and private investors with common objectives.

 For family offices, like any investment opportunity, buying into family businesses can be very attractive, but it is not without risk. Prior to investing, proper analysis calls for extensive financial due diligence to ensure interests and incentives are well aligned in the transaction. Success depends on ensuring both a structural and cultural fit. We actively encourage family business owners and family investors to work with experienced advisors to carefully explore every available option before determining the best course of action.

Christian Schiller is a managing director at Cascadia Capital, specializing in advising family businesses. Cascadia Capital is a Seattle-based investment bank serving middle market clients, globally.