Michael A Scharf

Choosing the right business structure in Texas is one of the first and most important decisions for any entrepreneur. It affects how your company operates, how you pay taxes, and even how much personal risk you take. If you are starting a new business or planning to restructure an existing one, understanding your legal options is essential. In Texas, you can choose from several legal business structures, including an LLC, a corporation, or a partnership. Each has its own benefits, responsibilities, and tax rules. Let’s explore what they mean and how you can decide which one is right for your business. Read more: https://lnkd.in/gRfHTH-y

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In 300+ QoE engagements, Tonnesen Accounting Services, LLC found that 58% of deals had seller's discretionary earnings come in lower than advertised. One in five had a gap large enough to kill the deal outright. Numbers like that make the case for getting a QoE report. But once you decide to get one, the harder question is which provider to hire. There's no standard scope, no required deliverables. Two firms quoting the same deal may be proposing fundamentally different work - and their proposals won't make that obvious. The single most important filter: does the provider include proof of cash? Bank statements are the one record a seller can't fabricate. Without that reconciliation, every adjustment in the report sits on unverified data. The full comparison framework covers what drives the $5K-$30K pricing spread, how to evaluate the people doing your work (not the firm's brand), and why phased fee structures reduce your risk on deals that die early. Worth reading before you sign an engagement letter. https://lnkd.in/erk-pq2r

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Most contractors spend years building a great business and about 90 days thinking about how to sell it. That's backwards. By the time an LOI shows up, the buyer already knows your EBITDA, your margin trends, your customer concentration, and every place your financials leave room for interpretation. They built a price. You're just finding out what it is. The owners who walk away with the best terms understood a few things before that first conversation: • How buyers normalize earnings and why adjustments cut both ways • What "quality of earnings" actually looks for and where messy books create problems • How working capital pegs get set and how they quietly move money after close Clean financials, consistent reporting, and a story you can tell with numbers. That's what separates a strong deal from a painful one. PE can be a great outcome. Just go in knowing what game you're playing. What's the biggest misconception you see contractors carry into a PE process? #PrivateEquity #ExitStrategy #ConstructionBusiness #FinancialStrategy

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When a PE firm colleague sits in a seat on a portfolio company’s Accountability Chart, awkwardness is sure to arise as there tends to be confusion as to whom the individual reports, the portfolio company Integrator or the PE firm which employs him or her. The solution is to clarify this up front to the satisfaction of the Integrator and the PE firm. Easier said than done. When a PE firm invites me to implement EOS at a portfolio company, I make it clear to both parties that “What happens in Vegas stays in Vegas.” By this I clarify that I do not want to be an informational conduit in either direction. The communications between the two should be open, honest, and direct….and not through me. The same should be done by the PE representative serving an operating role at the portfolio company. That said, up front and to both sides, I make it clear that if I learn something substantive that the PE firm should tell the company, or conversely, the company should tell the PE firm, I will ask them, “When are you telling them? Understand that if you don’t, you are forcing me to do so.” Interestingly, while I have said this on occasion, I have never had to be the “tattletale.” Portfolio companies tend to view someone employed at the PE firm as a spy. But being open and honest on both sides can reduce this issue. Long term, the best solution is to fill the seat at the portfolio company and have the PE employee become an advisor and not sit in the seat permanently. Therefore, the roles are crystal clear.

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80% of business owners plan to cash out in the next 10 years—but most have no real plan. This article shares that reality. But here’s my concern: too many founders read this, panic, and sell too early—often to buyers who understand valuation better than they do. Succession planning isn’t about reacting. It’s about creating clarity. Who will run the business tomorrow? Will they protect or dilute the value? And more importantly—is the business actually marketable, or just operational? Legacy only matters if someone else sees the value, too.

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Operating companies permanently changes how you invest. When you’ve lived through payroll cycles, commodity volatility, grid constraints, and board pressure in down markets, you stop starting with upside. Operators underwrite downside first: what breaks margins, what disrupts cash flow, what fails under stress. Capital doesn’t solve those problems but execution does. Operators: what risks do you underwrite first that others miss?

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An SBA loan isn’t cheap money if you don’t qualify correctly. What people think: “Low rate = easy approval” Reality: • Cash flow matters • Existing debt matters • How you used past capital matters SBA punishes bad financial habits. Plan first. Apply second.

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Your next client already expects you to use AI. Your current client hopes you do. Doesn't matter if you're a fractional CFO, a banker, a CPA, or an M&A advisor. Two years ago I put 30 years of CFO experience into a book. Finding True North. It laid out the COMPASS Framework for diagnosing what's really going on inside a mid-market company. Now that framework is an AI-powered platform. COMPASS Diagnostics gives you a $6M assessment of your client's business at your fingertips. Seven operational dimensions. Benchmarked against NAICS industry data. Risks identified before they hit the P&L. This week's COMPASS in Action explains how it works and why the advisors who adopt AI first will own this market. Subscribe. Link in the comments. cmgfinancialsolutions.net #BusinessAdvisory #AI #COMPASS #FractionalCFO #Banking #CPA

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Healthcare services PE had a decade of favorable conditions. Reimbursement expansion, multiple expansion, and cheap debt did a significant portion of the work. That era is over and the numbers confirm it. Near-term PE IRRs have moderated to approximately 7%, against long-run medians above 13%. PPM deal activity is expected to finish Q1 2026 down 16.5% year over year, following continued weakness throughout 2025. Large-scale dental platforms face a particularly difficult path: limited strategic acquirer options in a category already carrying one of the largest aged inventory backlogs in the sector. What this environment demands is a fundamentally different kind of operator. The healthcare services CEO who thrived in a consolidation-and-scale playbook is not necessarily the same profile who can drive genuine operational improvement under compressed timelines, reimbursement pressure, and tighter capital availability. The data confirms the gap is acute. According to AlixPartners' most recent PE Leadership Survey, 47% of PE leaders say their executive teams lack the agility to combat disruptive forces, nearly double the rate reported by public company peers. I've seen this distinction matter more in healthcare than almost anywhere else. The platforms navigating this environment well are not simply consolidating well. They are operating well. Their leaders are building systems that improve care delivery, reduce cost per episode, and retain clinical talent in markets where workforce pressure remains acute. That is operational alpha in healthcare. It is hard to replicate and increasingly the only thing that produces a defensible exit story. In a market where leverage and multiple expansion are no longer available as primary value creation levers, the operator is the strategy.

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FEI Houston kicked off its 2025–2026 Keynote Dinner Series with an exceptional event. The keynote speaker was Mr. Marc Cunningham, Global Managing Director of the Texas Stock Exchange (TXSE). TXSE is set to become a major force in Texas’s thriving economy and is positioned as a world-class capital markets platform for both the United States and global investors. The new exchange is committed to reinvigorating competition among issuers, providing a premier venue for listings, and building an innovative trading environment for all market participants. TXSE’s mission is to improve alignment between issuers and investors, while driving innovation and healthy competition in the U.S. equity markets. With an initial capital raise of $161 million, TXSE stands as the most well-capitalized exchange ever to submit a Form 1 filing to the U.S. Securities and Exchange Commission. The platform is built by seasoned market professionals and backed by leading institutions, with a clear focus on advancing the industry. Texas serves as a gateway to both national and international markets, with one in ten U.S. public companies headquartered in the state and an increasing number of Fortune 500 firms relocating there. However, Texas isn’t the region’s only economic powerhouse. The Southeast Quadrant (SEQ) of the United States is experiencing rapid economic growth and population increases, making it home to thousands of influential public and private companies. This thriving environment lays a strong foundation for establishing a new national securities exchange. Nearly a quarter of America’s publicly traded companies—close to 1,000 out of 4,600—are based in this region. Pictured L to R Mark Petersen, Past President FEI Houston Marc Cunningham, Global Managing Director - Texas Stock Exchange (TXSE) Mark Kerr, CFO Partner - SeatonHill Paul Marsh, President FEI Houston #FEIHouston #TexasStockExchange #TXSE #CapitalMarkets #SeatonHill #CFOServices 

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Austin-based health insurance company Curative has raised $150 million in a Series B round led by Chris Anderson’s Upside Vision Fund. Founded by CEO Fred Turner, Curative offers an employer-based health plan with $0 out-of-pocket costs for members who complete an annual preventative health visit, aiming to provide an alternative to the traditional insurance system. More at: https://lnkd.in/ec2ZnzyX #HealthInsurance #Insurtech #Funding #SeriesB #Healthcare #Austin

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R&D Tax Breaks Set to Expand - Tuberville’s Bold Proposal On May 9, 2025, Senator Tommy Tuberville introduced the American Innovation and Jobs Act, aiming to revamp the R&D tax landscape for small businesses and startups. This bill proposes: 🟢 Restoring immediate full deductions for R&D expenses, reversing the 2017 Tax Cuts and Jobs Act's requirement to amortize these costs over several years. 🟢 Doubling the refundable R&D tax credit cap from $250,000 to $500,000 immediately, with plans to increase it to $750,000 over the next decade. 🟢 Expanding eligibility by raising the gross receipts threshold from $5 million to $15 million and extending the claim period from 5 to 8 years after generating at least $25,000 in revenue. As someone who has navigated the complexities of R&D tax credits, these changes could significantly ease the financial burden on innovative startups. The ability to fully deduct R&D expenses annually would provide immediate tax relief, encouraging more investment in innovation. This bipartisan effort, co-sponsored by over 30 senators, reflects a growing consensus on the importance of supporting domestic innovation. By enhancing these tax incentives, the U.S. aims to maintain its competitive edge in technology and innovation. What are your thoughts on these proposed changes? How might they impact your business or the broader innovation landscape? #TaxPolicy #Innovation #SmallBusiness #RDtaxcredit #AmericanInnovation #Startups #TaxReform

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"My favorite CEO comes in, and the first ten minutes of the meeting is actually psychotherapy." We are excited to welcome Paul Martino, Managing Partner at Bullpen Capital, for Episode 2 of Charting the Course. A nine-time founder and veteran investor, Paul brings a unique perspective on the "post-seed" gap—backing founders who build in categories and geographies that others often ignore. To Paul, being misunderstood isn't an obstacle; it's often an early signal of opportunity. Full episode drops this Friday - follow to be notified. #ChartingTheCourse #VC #Startups

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The Governing Objective In recent months there has been a proliferation of "prescriptions" for certain aspects of business that are in need of a fix due to a variety of rapidly moving changes. One arena of this call to action for change/improvement is in the world of corporate governance. While there are many different angles taken the overall theme is movement in the direction of boards moving past "compliance only" activity toward other important issues due to rapid technological changes, geopolitical unrest, volatile domestic politics. Buried somewhere in all of this is an attempt to improve boards vis a vis their actual role in the company's performance which is something I have been arguing for over two decades. As noted these improvement prescriptions come in all flavors including improved board evaluations, better dynamics among board members, new governance codes (and calls for still more new codes), new processes, populating boards with AI and Cyber experts and more general improvement in director selection. What all of these prescriptions, regardless of their merit, miss is what should be the starting point of any corporate governance transformation: The Primary Governing Objective. Without a clear and proper identification of and commitment to, a robust business oriented governing objective, context is lacking for any real improvement. As simple as it sounds, it is like trying to plan for a trip with no exact destination in mind. Public company boards, and others, will continue to be undervalued and thus, underperforming, assets until a full potential development (of the company) governing objective is developed. #governnacearbitrage #corporategovernance #boardsofdirectors #valuecreation #performance https://lnkd.in/gmfU3GVt

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First time at EnerCom Denver My big takeaway: • Capital efficiency: operators are squeezing more from existing assets with relentless ops discipline. • ESG isn’t dead. Across public and private companies, every presentation highlighted environmental metrics, with a special focus on reducing or offsetting carbon footprint. • Lower-carbon molecules matter: CCS is scaling, LNG buyers want low-CI gas, and low carbon marine fuels are in the conversation. Where AI is moving the needle: • Reliability & uptime: physics-informed AI stabilizing wells, extending ESP life, cutting chemicals, and lifting production. • Environmental risk: “environmental digital twins” that fuse weather + sensor + infrastructure data. • Compliance without the grind: turning SCADA, invoices, and field logs into audit-ready reports, reducing repetitive work and catching anomalies early. At Rimba we’re building AI to automate compliance reporting and operational analytics so operators can spend less time on paperwork and obtain visibility on the right data to improve uptime, preventive maintenance, and optimize output.

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Innovation at its finest! SurgiBox Inc. created an inexpensive portable operating room. This could be the future of surgery. Ambit Health Ventures Sam Goldberger, MD, MBA Naomi Fried, Ph.D. Mason Reiner Kelly Laurel Mike Teodorescu Sashidhar Jonnalagedda Atif Rakin Karen Bernstein

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