American Dreaming
This year marks the 90th anniversary of the symbolic American Dream — or at least that’s when the term was first created. Historian James Truslow Adams originally described it as “that dream of a land in which life should be better and richer and fuller for every man, with opportunity for each according to ability or achievement.” Ninety years later, countless Americans have debated whether they think the American Dream is still alive. The overall consensus of these discussions was about 50-50. Some U.S. residents believe the American Dream is turning into The American Nightmare of inflation, debt, student loan crisis, wage stagnation, rising gas prices, and house prices that are out of reach. Even the stock market is looking like it’s heading for a correction and the economy headed into a recession.
Many still think the American Dream is alive, but some think it’s dying — and some think it’s dead, but could return. The core of the Dream: 26% said financial freedom, 17% said equal opportunity, and 40% said a combo of those plus material ownership and racial equity. Key to achieving the Dream: 40% said hard work, and 43% said a combo of hard work, luck, and privilege. If you look at the statistics, generations of Americans have climbed the economic ladder for decades, but there are signs that economic mobility is waning.
The fraction of Americans who earn more than their parents has shrunk from 90% of those born in the 1940s to 50% of those born in the 1980s. Income inequality in the US has been rising for decades, and is wider between different ethnic groups in America. We asked what the American Dream means to you today, and here were some of the responses:
“The ability to move above the station you were born in life through hard work and perseverance.” “To fail and have continuous opportunity to get back on our feet regardless of discrimination.” “Filling up my gas tank without checking my bank balance first.” “Exists because people are still willing to do anything to get to America.” The dream is what you make of it for most Americans starting out in the workforce or nearing retirement age. For some, it aligns with Adams’ first description: opportunity to succeed, regardless of your background. For others, it’s a lie. And for some, it’s changing: thanks to stimulus spending, US households have saved $2T more than they would have normally. In April, US household income was 11% higher than pre-pandemic levels. Biden’s presidency could further shape this trajectory, with trillions in proposed spending on social initiatives. Additional stimulus support and a recovering economy with many industries in drastic need of catching up on demand should help give the American Dream a shot in the arm for now.
Economy And Investing News Now
American stocks are very volatile right now. GameStop shares have soared 1,400% this year as retail traders rallied around the money-losing video game company. Some are bullish about its new, ecomm-savvy board. But annual sales have fallen each year since 2017. In April, GameStop raised $551M by selling new shares and said its CEO is stepping down. Investors will likely be watching for signs of ecommerce progress.
Campbell Soup serves up earnings that don’t fill shareholders bellies. The canned soup legend thrived early in the pandemic, as people stocked up on Campbell classics like Snyder’s pretzels and Goldfish. After nearly a decade of falling sales, Campbell’s soup sales started growing again. But growth has slowed as we return to a lifestyle that involves less can-hoarding. Campbell is trying to keep momentum going with Millennial-friendly recipes — we’ll see if it’s succeeding in doing more than making us hungry.
Recovery is chugging along as jobless claims fell to a new pandemic low, and wages are growing. On the flip side: prices are rising faster than expected as the US economy revs up and shortages abound. Prime example: Ubers are getting pricier (and they’re always 24 minutes away). Companies are struggling to bring workers back, since 42% of people on enhanced unemployment earn more than they did at their jobs.
Crypto ransoms intensify as cyber attacks are continuing to target critical infrastructure. Last week, Earth’s largest meat producer was forced to shut beef plants after a ransomware attack. Last month, the US’ largest fuel pipeline was also hit — and paid $4.4M in Bitcoin to reclaim its systems. Experts believe Russia is funding “the ransomware plague.” We’ll be looking to see if the US government takes a stronger stance.
The unicorn birth rate has already broken a record this year? The first half isn’t over, but we’ve already witnessed the creation of 138 billion-dollar VC-backed startups in the US. By comparison, investors valued 91 US companies at $1 billion or more in 2020, according to PitchBook data. This year’s crop is dominated by 27 business software startups, including Eightfold AI, a SoftBank-backed talent-recruitment company that just raised a $220 million Series E earlier this week. Also heavily represented in the class of 2021 are fintech and network management software specialists.
Payments provider Mollie has become one of Europe’s most valuable companies with an $800 million investment valuing it at $6.5 billion. Blackstone Growth led the round, with support from investors including EQT Growth, General Atlantic and TCV. The funds will be used for its international expansion, recruitment and product development. The Series C makes Mollie the third-most valuable fintech company in Europe, according to recent data, following Klarna and Checkout.com. Founded in 2004, Mollie was valued at $1 billion in September, according to a PitchBook estimate. It has raised over $940 million in VC funding to date. Based in Amsterdam, Mollie serves more than 120,000 active merchants per month. It processed over €10 billion (around $12 billion) in transactions last year and expects that figure to surpass €20 billion in 2021.
From the listing of Coinbase on public markets to the latest surge in retail investor activity on Robinhood, the fintech sector has seen some of the most notable advances in both expansion-stage investment and alteration of the competitive landscape for financial services. The latest edition of Deloitte’s Road to Next series zeros in on this select arena, reviewing which companies look poised to become category front-runners, and where the forefront of the next wave of innovation in fintech lies. Additional highlights include: Datasets summarizing key deal making trends Insights from Deloitte leaders as to first-mover advantages in regulation with a spotlight on the B2B payments ecosystem.
For private equity, big buyouts rarely make for great PR, especially when the investor is coming from overseas. Nowhere is this more apparent now than in the British brouhaha surrounding New York-based Clayton, Dubilier & Rice’s attempt to buy Morrisons, the UK’s fourth-biggest supermarket chain by market share. Yet is the alarm over CD&R’s Morrison deal a storm in a teacup?
CD&R has offered £5.5 billion (about $7.7 billion) for Morrisons, but the chain spurned the proposal as undervaluing the company. CD&R, which has until July 17 to revise its offer, hasn’t walked away yet. Fearing that more potential bidders are poised to swoop in on Morrisons, Britain’s opposition Labour Party is calling on the government to intervene—even before a deal is on the table. Seema Malhotra, a Labour member of Parliament, says PE ownership poses a threat to supermarkets, citing worries about loading businesses with debt, stripping them of their assets, and leaving employers and taxpayers to pick up the tab.
That’s a crude generalization, but Malhotra isn’t alone. A surge in PE acquisitions of UK companies since the start of the year has invited increasing scrutiny and criticism of the asset class from politicians and the media alike. It also doesn’t help that only last December, the UK also saw the collapse of Debenhams, an iconic department store that was once controlled by CVC Capital Partners, TPG and Merrill Lynch Global Private Equity. Critics say Debenhams never recovered from the debt it incurred under PE ownership. The suspicion of private equity appears bipartisan, too. The Daily Mail, a tabloid widely seen as a cheerleader for center-right politics, has also seized upon the uptick in PE activity and, specifically, the controversy surrounding private ownership of care homes, churning out headlines in recent weeks referring to “pandemic plunderers” and “vulture capitalists.” While the headlines may be formed from a kernel of truth, they lack nuance. They ignore PE firms’ long history of buying and selling big British companies. And while that record isn’t impeccable, not all deals have ended in closures and mass layoffs. Furthermore, deals resembling Morrisons haven’t caused nearly as much controversy.
Take Asda, the formerly Walmart-owned supermarket chain that was snapped up by London-based TDR Capital last year. (That deal was quietly completed in February.) Consolidation of supermarket groups has been happening independently of PE involvement for years—and long before the pandemic. Before selling Asda to TDR, Walmart had tried to offload the chain to rival Sainsbury’s, only to see that plan blocked by antitrust regulators. Morrisons itself even gobbled up rival UK supermarket Safeway (a UK spinoff of its American namesake) for £3.3 billion in 2004. Surely there are legitimate concerns to be raised about PE practices. But fears around CD&R’s attempt to acquire Morrisons seem off the mark, especially when one considers CD&R’s track record. This isn’t CD&R’s first foray into UK retail. It previously acquired British variety store chain B&M in 2013 and took it public in 2014 before exiting the business in 2018. By many metrics, the investment was a success—during CD&R’s ownership, B&M opened 300 stores, increased its headcount to 13,000 and saw sales pass £1 billion. So it’s reasonable to assume that, should CD&R acquire Morrisons, its prognosis wouldn’t be quite as bleak as Malhotra implies. What has received far less attention are reports that another Morrisons’ suitor is tech giant Amazon.com—a company that has already created a near-monopoly in ecommerce and, for my money, would be a far more controversial buyer than any private equity firm could hope to be.
With all these things considered, the Morrisons deal seems to be an odd choice as a poster child for PE’s worst excesses. This isn’t to suggest that PE firms deserve a free pass. But if you’re going to raise a national fuss about the wrongs committed by investors, save your powder for higher-stakes battles that are genuinely in the public interest. Fears of PE encroachment into ESG-sensitive areas such as elder care and fostering services feel justified. And yet those cases haven’t garnered nearly as much attention as retail deals have. The outcry over PE taking over Britain’s high-profile retail brands seems arbitrary at best—and, at worst, disingenuous.
The virtual data room is at the core of countless business transactions: It’s tied to company growth, revenue and capital needed to fund new initiatives. 53% of finance professionals say their current VDR solution doesn’t improve collaboration. Data rooms should be better. DocSend believes that VDRs should combine usability, security and storytelling, so you can collaborate and move deals forward.
Essential Employees
What are the greatest assets in your business? Entrepreneur with a $1 million net worth Mike Schiemer gives you the answer: Its your people! Your employee team is essential. Plus, whoever else is in your outsourced network, including your supply chain these days. From over 30 years of working with hundreds of entrepreneurs and SMEs, I can certainly confirm this. People are the primary under-utilized asset in every business. It’s likely you probably don’t train yourself unless you are highly self-motivated, and guaranteed even more likely you don’t train your people! But bosses and business owners, here is the problem in a nutshell:
– You expect them to be capable!
– You expect great performance!
– You expect better productivity!
Think of it this way:
1. Professional sports people train everyday
2. The military train every day
3. Business people hardly train at all
Many of you will spend 30 to 40 even 50 years engaged in business and work activities. Yet, the truth is you don’t train yourself or your people for this four decades business journey. It’s a harsh but fair truth in the world of business and careers to maintain the American Dream and global economic prosperity.
