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No Sand Between Our Toes (2016)

Why being at the bar won’t get you a drink but will make your dermatologist smile.

I’ve been spending my summer with lawyers.  It’s not a sentence for misbehavior or because I’ve committed some wrong.  It’s not been at BBQ’s or quaffing beers with my friends at the bar (groan) telling enhanced memory college war stories while listening to the surf above the clatter of conversation. We have not even been competing at Rio inspired beach volleyball pretending each slam - if we could actually jump high enough to make one over a regulation net - was for the gold medal winning point.

Nope.  It’s been nose to the grindstone reviews of complaints and counter complaints, pleadings, filings, hearings, motions, and depositions.  And it’s been fun! Now, not the fun of an exhilarating boat ride against a swift current or being elbow deep into a great steamed lobster fest.  Rather it’s been the joy of winning a tactical position, discovering confirmation of an adversary’s transgression,  laboring under the responsibility of being fully prepared to argue your belief against some very smart colleagues, enjoying the emotional fulfillment of knowing that you are right and having someone in a black robe affirm your belief. Yeah…that may seem like a poor substitute for being at the beach but as far as alternatives go it is certainly better than, say,  Disney World in August.

This year I have relished the privilege of a deep dive in litigation esoterica and SEC regulation, welcomed as a real-world contributor to strategy, even appreciated the more than occasional 2 o’clock in the morning email exchanges, and learned that being a “good” client working with open-minded and keenly intelligent lawyers makes for more than good results.  In our troubled fund practice over the last 15 years we often spurn law firm “help” – particularly at the crisis stage of an intervention as few law firms truly understand the practitioner level consequence of the standard legal playbook on a VC or PE practice that is more medieval than modern.  The vexing engagements we have been working this year required intimate assistance and leadership of a group of attorneys who, in concert with our replacement General Partner practice team, helped secure rights lost, arrested loss of value and fixed governance of particularly dynamically challenging circumstances.  The collective efforts of the Team have given our common Limited Partner clients progress and conclusions that any one of us independently would not have been able to gain.  So here’s a toast, to my friends at the bar who, while keeping me off the beach, have kept me engaged, stirred intellectually and appreciating the fire-power a well-crafted legal and operational strategy can have when dealing with wayward General Partners and the mess they leave behind.  

Here’s hoping next year we are all scrunching sand with beer in hand telling war stories about the terribly active summer of 2016.  Meanwhile our summer labor is not over. I think my lawyer friends spent less time than I did on whatever their version of a holiday may be.  Instead we are all seemingly locked in steel and glass towers under the glow of fluorescent lights rather than risk sunburn. Other than our clients, maybe only our dermatologists applaud the consequence of our busy summer this year!

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore,, a leading global professional services provider of troubled Private Equity, Venture Capital and Hedge funds under management. Semaphore currently holds fiduciary obligations as General Partner for eight funds, is a New Markets Tax Credit provider and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York, London and Dallas.

Topics: Venture Capital, troubled funds, equity, private equity funds, Semaphore, general partners, LP, business advisory, VC, venture funds, private equity, ethics, business

Semaphore Forms Joint Venture with Topline Strategy

Semaphore Forms Joint Venture with Topline Strategy

to Provide Technology Due Diligence


As you may have read in our last S4 Reporter, Cris Miller, the founding director of our Technology Due Diligence Practice retired last Friday September 30th. With Cris’ departure, we decided to form a Joint Venture with Topline Strategy, a Boston-based provider of strategy consulting services to technology companies, in which Topline will take over day-to-day management of the practice.  It will operate under the name The Semaphore Technology Diligence Practice.

Over the last 5 years, we have formed a close partnership with Topline Strategy, working on dozens of engagements together. Together we’ve been able to provide our clients more complete answers to questions about their technologies and the markets for those technologies. 

With the retirement of Cris Miller, who was the driving force behind our Technology Due Diligence practice, we thought the best way to continue our commitment to clients as well as grow the practice was through a Joint Venture with Topline Strategy. Through our long partnership, the Topline team has demonstrated a true understanding of Technology Due Diligence as well as built strong relationships with our principal technologists and major clients. Having them take the business forward was a natural.  We have been working together on the creation of, and transition to this, Joint Venture for the last three months.

As part of the agreement Cris Miller will be joining Topline Strategy as an advisor and Topline Strategy will continue to work closely with our Private Equity Advisory group, providing both strategy consulting and technology due diligence services to Semaphore’s clients and portfolio companies.

As Topline Strategy will be the operating partner in our Joint Venture, going forward, please feel free to contact Jon Klein ( with any questions about Technology Diligence or visit its website Of course, you can also reach me ( if you have any questions.  I know you join us in wishing Cris well in his retirement as Topline and Semaphore  continue to fulfill our common promise and commitment to aiding investors and the M&A community with the right knowledge and correct solutions to ensure success.

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore (, a leading global professional services provider of Private Equity funds-under-management. Semaphore currently holds fiduciary obligations as General Partner for seven Private Equity and Venture Capital funds, is a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York and London.

Topics: Technology Assessment, due diligence, private equity funds, Semaphore, technology diligence, business advisory, technology, diligence

Semaphore's Annual PE Industry Confidence Survey results

Posted by Mark DiSalvo on Tuesday, January 25, 2011 @ 12:30PM

Is 2011 a Wasteland or Playground?

By Mark S. DiSalvo

It seems my industry colleagues have continued to be wrongly optimistic about their personal income against a backdrop of continued and decided lack of confidence in the economy and their national governments.  That appears to be the clear read comparing the raw data from the 3rd annual Semaphore Confidence Survey with last year’s results. 

Let’s start with pay.  At the start of last year 78% of the over 500 respondents to the 2010 Confidence Survey believed they would earn more money than the prior year.  The truth was that only 36% of this year’s respondents reported they did in fact earn more than the prior year.  Importantly though is that only 11% of respondents earned more money two years ago against that prior year baseline, clearly signaling at least a change in how some shops are valuing their talent. This must be counterweighted by the realization that 45% earned less than last year – carry not being what it used to be.  Nonetheless, not unlike last year, my colleagues firmly believe that the next year will provide the big score as nearly 75% of this year’s respondents believe they will earn more money than last year.  If they are right, then next year the national deficit will be on the decline despite no increase in upper tier taxes or capital gains and the real estate market will be certain to see significant rebound.

Our peers demonstrated their personal income optimism with their LPs pocketbooks too. In the beginning of 2010, fully 98% thought they would make up to six investments.  The year did not go as strong as hoped with only 11% doing six deals or more, but 76% closed 1-3 deals. Further, those deals were as large as expected with 73% self reporting their deals were in excess of $25 Million in each discrete investment when they anticipated 76% of their deals would be above $25 Million in size at the time of last year’s survey. 

And in what are we investing?  Unlike the year before when our respondents chose three new investment areas in the top three, the industry stayed rather consistent. Enterprise Technology and Health Care were 1 and 3 and Social/Community Technology took the second spot in that list, breaking the top 5 for the first time.  Sustainable Energy/Cleantech and Gaming (not even top ten last year) were 4th and 5th.  Last year the survey indicated investors were apparently smelling money and opportunity in Obama-care. As one person noted, “…when you mess with 16% of the economy something’s got to break our way.” We’ve yet to see if that comment is correct or merely hopeful but investors intend to remain active, according to our survey, in that space.

The just over 500 who did reply this year were similar to last year’s mix of VC and Buy-out pros, with a slightly higher representation of operating executives responding.  One thing for sure is that this year’s mix of survey takers were very high on themselves believing that 78% (63% last year) were confident in their business and  84% (77% last year) confident in the person who sits down in front of their computer each morning. They even had increasing confidence in their bosses with 75% expressing that view - a full 25 points higher than last year and triple the year before.

This personal and professional confidence does not extend itself to America’s political leaders.  While respondents were hard on President Obama and his economic team with only 36% expressing confidence in the President; it was more that triple the 11% expressed last year.  His economic team did not fare as well with 49% (55% a year ago) dissing Larry Summers et al.  

A 7X return is spectacular in a year but when it comes to Congress it is de minimis as its favorability improved over last year’s 0% reply of confidence in Congress to 7% with 77% (65%) stating no confidence in the folks under the Capitol Dome.  Apparently it does not matter which party is in control of the Congress. State governments and state legislatures earned a doubling of confidence to 27% (you should know that the top states replying were MA, CA, NY, NJ, NC and IL).  While confidence has skyrocketed for the President and crept upward, however marginally, for other pols in America, international respondents had crushingly poor opinions of their governments with fully 71% having no or little confidence in their countries leaders, more than double the 31% of a year ago.  The preponderance of our international respondents were from the UK with most  replies coming, in order, from Germany, Switzerland, Japan, France and China. 

To see the highlights of the results of the 2011 Semaphore Confidence Survey please click here.  If you want to do your own comparison, the 2010 Semaphore Confidence Survey results are here.

As usual there was a bit of entertainment offered by our none-too-shy contributors. One offered that “This was a terribly written survey,”…alas.  There was the usual partisanship with strong comments about “not believing the positions the Republicans are taking” counterbalanced by charging that Obama “is a socialist with desire to make US a 3rd world country”.  While there is little danger of we becoming Sweden in a hurry there were many serious comments reflecting state budget shortfalls, pension liabilities, and a belief in significant New Year investment opportunity with many industry recommendations.  One notable recommendation offered was “I have never felt as strongly about the investment opportunity presented by vertical farming,” who knew? 

A cottage industry has grown about the infamous response in our inaugural survey “PE is dead and I wish my boss were too.”   Many wondered where “he” was and hoped he would surface. He didn’t.  One survey taker suggested that “he must be serving time without access to internet.”  Many have tried their hand at PE Killer’s NY Post style headline writing skills (maybe he got laid off from Wall Street in ‘08 and is now working for Murdoch?).  One offered that “VC is a wasteland. PE is a playground (unless your name is Guy Hands.)”  Ouch! We’ll check back next year to see what side of the seesaw we will actually experience in 2011.  

Mark S. DiSalvo is the President and CEO of Sema4 Inc., dba Semaphore (, a leading global professional services provider of Private Equity funds-under-management and technology diligence services. Semaphore currently holds fiduciary obligations as General Partner for seven Private Equity and Venture Capital funds, is a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world. Semaphore’s corporate offices are in Boston with principal offices in New York and London.

Topics: Venture Capital, troubled funds, equity, Semaphore, general partners, business advisory, technology, diligence, VC, investment, venture funds

A New BOSS Comes to Town


We have all had a new boss in our life.  This is an announcement concerning a different sort of BOSS.  We here at Semaphore are excited to let you know more about our Business Operations/Strategy Service and the addition of David Friend, M.D., MBA as part of our advisory team.  Let us know how we can help – and say “hello Friend”.

Every now and then it’s healthy to get a new boss - someone who can lead a previously moribund operation. A person not weighted down with institutional memory and tired culture.  A person who can not only articulate a vision but is not freighted with excuses as to why a goal has not and cannot be reached.  Rather a person who understands and has the skills to get you across the success line.  Such success can only be achieved with the insights of senior, knowledgeable and committed leadership.  Success is determined by process and the unique skills of the person leading the effort.

 That is why Semaphore’s Business Operation/Strategy Service (BOSS) is expanding.  “We are thrilled to announce that David Friend, MD, MBA is joining our advisory team,” announced Semaphore CEO Mark S. DiSalvo. “David brings years of sterling hands-on and real-world practitioner skills to our already robust practice assisting companies and funds in our strategic/operational business advisory practice,” he noted.

 “Joining Semaphore’s Team allows me to bring diagnostic, operational and mentoring skills earned by decades of turning around troubled entities and accelerating success in working but stagnant companies,” noted Dr. Friend.  “As a trained physician and experienced turn-around CEO I can assure, along with my Semaphore colleagues, true and real change management in tying strategic clarity to sustained operational success, “ promised the long time work-out executive.

The Semaphore BOSS practice provides senior resources to assess recommend and mentor technology companies in the “Zone of Irrelevance “(ZOI). 

Dr. Friend has most recently served as CEO of The Palladium Group providing global strategy education and consultancy to world-class entities from the Middle East, Asia, Europe and North America.  He previously worked as a turnaround executive with Alverez and Marsal as Managing Director of Healthcare Restructuring and Watson Wyatt Worldwide as Division Chief Executive where he helped guide the business through its successful IPO. He was also COO at High Voltage Engineering and serves on a variety of boards and advisory committees as a qualified Audit Committee Chair.

The BOSS program augments the well known Semaphore Technology Diligence and Market Diligence Practices that offer investors and companies independent verification and validation of products, systems and markets.  Crispin Miller, Technology and Market Practice Leader said “we are excited to have David join our advisory practice team offering vital resources to PE portfolios, owner-run companies and other private, public or non-profit institutions.”

The BOSS practice will focus on companies that have entered the “Zone of Irrelevance” (ZOI).  These are typically companies who have launched, have customers and revenue but have plateaued.  

For many companies hitting this plateau after initial revenue means death.  The ZOI is an all too frequent malady and a difficult thing to avoid.  Very few venture backed companies reach their potential when they fall into the ZOI.   These are the companies who generally have revenue of under $5 million and have not figured out how to get to $20m+ (or companies in the $10m range trying to get to $50m).  Companies challenged by ZOI may have a variety of problems that are directly addressed by a combination of strategic thinking and tactical action.  “At this point employing BOSS affords the prospect of fulfilling the founder’s dreams and an investor’s expectation,” said Dr. Friend.

The BOSS practice provides senior resources to assess, recommend, mentor and/or pitch in with hands-on expertise with companies in the ZOI.  The key points addressed are the ability to link strategy, operations, finance, people and revenue attainment.

David B. Friend, MD, MBA, Business Operations/Strategy Service Practice, can be reached at 781- 296 -6300,

Crispin Miller is the head of the Diligence Practice ( at Sema4 Inc., dba Semaphore (, a leading global professional services provider of Technology and Marketing diligence, and Private Equity funds-under-management services.  The Semaphore Business Operations/Strategy Service (BOSS) complements both of its other advisory practices.  Semaphore currently holds fiduciary obligations as General Partner for seven Private Equity and Venture Capital funds, a New Markets Tax Credit lender and advises General and Limited Partners as well as corporations around the world.  Semaphore’s corporate offices are in Boston with principal offices in New York and London.

Topics: private equity funds, technology diligence, business advisory, market diligence, Business Operations, operations, Strategy Services, BOSS

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