Turns Out the World is F’d Up – Time to Opt-In & Act

#MeToo #PrayforVegas #Charlottesville #Trump #RocketMan #Brexit #Dotard #Weinstein #Racists #Sexists #Guns #Massacre #NorthKorea #Nukes #Fires #Hurricanes #Russia

The world is going to sh*t isn’t it?

… if we believe it, it will become so.

We now live in an opt-in filtered world. Tribes are self-selected, no longer limited to geography and religion. We follow and interact with like-minded individuals at work and on social media, and in turn they shape our reality and we shape theirs. Behavioral science calls this “emotional cognition” – we adopt the beliefs, feelings and behaviors of the people with whom we spend most of our time. Our work, family and online tribes become our comfortable, lazy interaction bubbles.

It is no wonder racial, sexual, cultural and even regional governance fights are pouring into the streets.

We have subconsciously built a life that avoids direct challenges to our own beliefs; throwing diversity, debate and tolerance to the wind in exchange for mindlessly-easy relationships. A tribe with whom we can be lazy and wholly ignorant…

…until it boils over.

In the past, a modern day white supremacist might have been that one overtly racist old guy on the outskirts of town, or that redneck college roommate. He occasionally said messed-up stuff, and if he violated a moral norm in public he was generally ignored/shunned in order to avoid escalation by confronting him. Today, he is not alone in the world. He can find, communicate with and build his own tribe. What was once a kid from-the-sticks with a socially-awkward redneck joke, has turned into a dangerous group-think rally with like-minded racists. He now has people on his team and feels emboldened.

Its like dancing at a concert – the first kid dancing is a stared-at as a loner. But once the second joins, they could be on to something – feeding on each others’ energy. Next thing you know, everyone in the crowd is dancing.

It is not that racism and sexism are new to our country. It is that the isolated pockets which we neglected as small, fringe and likely harmless have joined together to show us greater scale than we ever could have imagined. Modern connectivity has forced the world into involuntary detox. Toxins (anger & hate) from every nook and cranny have been released and can readily move throughout the body, separately or as angry mobs. These may not be the challenges we chose, but the only choice we have now is how we respond.

“I wish it need not have happened in my time,” said Frodo.
“So do I,” said Gandalf, “and so do all who live to see such times.
But that is not for them to decide.
All we have to decide is what to do with the time that is given us.”

― J.R.R. Tolkien, The Fellowship of the Ring

1.) Awareness is nothing without Action

#MeToo and standing up for yourself is important and needed, but let’s not stop with awareness about past actions. Identifying and speaking out about a problem is only fruitful if solutions are found. Each of us must make time for uncomfortable, direct conversations. We must answer questions about “What it means to be born White vs Black vs Latino vs Asian etc.” Why society looks away from sexual-predation and objectification as if a flaw inherent in men that we must accept.

Individuals and groups must be confronted when they objectify and slander. Good men and women must go out of their way to stand up for others. And most importantly, we must paint the picture of our future, plan for how we get there, then reach out and grab it.

“Now, we must all fear evil men.
But there is another kind of evil which we must fear most,
and that is the indifference of good men.”

– Monsignor, Boondock Saints

What do I plan to do about it?

Have the conversation at home. Host events with my Alumni group, community, & in unexpected areas designed to discuss the problems and come up with potential answers. Vouch to step in where & when appropriate. 

What are your thoughts? (would love your comments and commitments to Action below)


2.) R_E_S_P_E_C_T & Listen

Never fight anger with anger. Regardless of the seeming senselessness of others’ views, we must respect them as human beings, starting with compassion and understanding. Getting down to their rooted pain-points and the root of our societal weaknesses. We must start by asking questions and listening, instead of interjecting. Probing inquisitively and filled with curiosity. Can you get to the root of the problem by asking why 6 times?

“Darkness cannot drive out darkness;
only light can do that.
Hate cannot drive out hate;
only love can do that.”

~Rev. Dr. Martin Luther King, Jr.

What do I plan to do about it?

Dive in to uncomfortable conversation when I create them (above) and when they come about in life.

How about you? (would love your comments below)


3.) Forgive & Attempt to Educate

Some acts are unforgivable and life-shattering. Forgiving is not forgetting. Forgiving does not change the past, but letting go of past hurts can allow healing and rebuilding of the future. That said, ignoring a problem will not make it go away. I will only kick the can down the road for the next time when it can once again find it’s clan and its next victim. Nothing great ever came from sitting idly by. Greatness only comes from thoughtful and focused action with consistency and the determination never to quit. Emotional cognition must be used to our advantage – influencing those who would do harm to our communities by influencing and showing the way to a better world.

“Always forgive your enemies;
nothing annoys them so much.”

― Oscar Wilde


4.) Choose to Find Positive Possibilities

Like the story of the two wolves (of the Cherokee & Tomorrowland), I choose to reject the hypothesis that our world is on the decline, and instead work to build a new reality with action. I choose to believe tomorrow will be a better day, because I will do everything in my power to make it so. I choose to level-up, and push this world and myself toward version 2.0.

As always, I welcome your questions, thoughts, comments, critiques, and
words of wisdom below. I also welcome the opportunity to
connect and debate on Twitter, other social media or IRL.

M&A Lingo for CEO’s – 15 MUST-know Terms

CEO giving talk about M&A and Private Equity phrases

If you own or run a private business, chances are Private Equity firms are knocking on your door. But if you aren’t prepared for the unique language of private equity and M&A, conversations will leave you lost-in-translation, or worse, left in the dust by your PE-backed competitors.

To stay ahead of the game, every business owner, CEO, CFO, and President should know with these key terms for when acquirers come a-knockin:

1.) Turns / Multiple

“What multiple were they looking for?”
“Sounds like six to six-and-a-half…”
“I bet we can get them signed up if we give them another half-turn.”


Turns or more commonly multiples of EBITDA are the standard in middle-market ($20-200m revenue businesses) for quickly comparing the cost of acquisitions to other transactions in the private market. For significantly sized businesses and outside of VC, tech and public markets, multiples are usually of EBITDA instead of revenue. In the middle-market, multiples generally range from three times (3x) to ten times (10x) EBITDA depending upon the specifics, with a typical range being 4-6.5x EBITDA. A business doing $5 million in EBITDA on $50m might sell for a 5x multiple (of EBITDA) leading to a $25m TEV (Total Enterprise Value). A turn would be going from a 4x EBITDA price to a 5x EBITDA price (or vice-versa). More simply, some might consider this as the number of years it might take for an investment to pay back (i.e. 4-5 years)

2.) Points

“We traditionally set aside a few points in a management pool to keep interests aligned.”


Points are traditionally percentage points of equity, usually in a business. This is a conversation about reserving some percentage of equity ownership in the business for management to earn as an incentive for good performance of the business going forward.

3.) EBITDA (“Eeh-Bit-Dah”)

“How big is the business? How does your EBITDA look?”


Earnings Before Interest, Tax, Depreciation & Amortization. This is THE key high-level and preliminary financial metric (in addition to Revenue) that is used in comparing acquisitions and investments to other transactions in the industry. A business doing $5 million in EBITDA on $50m might sell for a 5x EBITDA price (multiple) leading to a $25m TEV (Total Enterprise Value).

4.) Book

“Is there a book? When will the book be available?”


Confidential Information Memorandum (CIM) or OM (Offering Memorandum) is also known in the industry as a “book” – a packet of materials for marketing a transaction with a business. Traditionally this is a multi-page document (say 20-50, but I have seen as many as 250+ pages) put together by a management team, investment banker, broker or M&A adviser that describes the operation of the business, their end markets, growth story, customers, leadership, plans for the future. Having a book that can be readily shared with potential acquirers (alongside an NDA of course) demonstrates a level of seriousness about a transaction. Many books today come in the form of detailed slidedecks.

5.) Concentration

“Are there any concentration issues?”


Typically referring to industry and customer concentration. Diversification is the name of the game here. Risk is the enemy of private equity, and customer concentration has been shown to be one of the biggest non-starters for would-be acquirers. Most PE firms like to see companies with no customers that make up more than 10% or so of annual revenue. What happens if that 30% customer walks out the door?

6.) Roll

“How much is ownership looking to roll?”


Rolling is a question of how much equity an existing owner is willing to keep on the table / reinvest / retain in the business going forward. Traditionally a Private Equity firm will want to take a majority equity position in a business, say around 80% to the existing owner’s 20% post-transaction. Technically speaking equity is usually rolled into a new entity as many transactions are asset sales (i.e. the owner is cashed out 100% from the existing business and purchases a 20% stake in the new entity, which acquires the assets of old entity).

7.) Platform / Add-On

“This business is too small as a platform, but we might look at it as an add-on for XYZ company.”


Generally speaking Private Equity firms have growth-through-acquisition in mind when acquiring any business. Traditionally their initial investment in a given industry or niche is larger, and considered the nucleus or platform around which they can build. A given firm will usually raise a fund of committed capital and will traditionally acquire somewhere between 5 and 15 primary businesses within that found. Around each of those, they will often acquire many smaller synergistic businesses (“add-ons”) which allow the platform to grow accretively in addition to organically over the course of their funds ownership of the business.

8.) LP

“Our LP’s are hungry for direct investment, so we can definitely stomach larger acquisitions than our fund size might infer.”


Limited Partners are the money behind the money. Each private equity fund (and most successful firms have many funds / vintages over their life) is a fixed-life vehicle for acquiring, building and selling companies with the objective of returning a profit to the investors. Limited Partner or LP’s are the institutions, high net worth individuals, government entities, foundations, etc that have committed an amount of capital to a fund with the understanding that they will receive a certain return on their investment. Often the promise from PE firms is 20-30% IRR and has a minimum preferred rate of return or Hurdle rate.

8.1(bonus term): Hurdle

“We won’t even be close to clearing the hurdle on that investment.”


LP’s typical have a hurdle-rate or preferred return established with PE firms with whom they invest. A typical hurdle rate is 8%. The majority of the upside that PE firms earn is from the carried interest or earnings of a given fund, but most firm’s do not get any/much of that upside until they have at least cleared their hurdle rate (say 8%). While traditionally this applies fund-wide (vs deal-by-deal), this becomes an important number above which PE firms must ensure their companies/investments perform. While not common, some investors will structure that same hurdle or preferred return into their investment in a business to ensure they get the returns their investors desire.

9.) Independent Sponsor

“We have been operating as an independent sponsor for 10 years
and have closed 12 transactions in that time.”


Independent Sponsors are also known as “Unfunded Sponsors” meaning they do not have an established, committed pool of capital from which then can draw. This means that after negotiating a transaction with a seller, they must pitch the deal to LP’s and other investors to get it funded. While this model is very successful for some, for others who are inexperienced or without the proper connections, sellers signed up under LOI (and exclusivity) can be dragging around for many months (and even years) with constantly prolonged closing as the buyer attempts to secure funding.

10.) LOI / IOI

“We are ready to move forward. When can we expect an LOI?”


Letter of Intent (LOI) or Indication of Interest (IOI). Think of this as the term sheet, or offer on the table. This is fulfilling the old, “I don’t believe anything until I see it in writing.” Both are non-binding, though an Indication of Interest is usually more preliminary as in, “I believe your business is worth between $50m and $55m, and I am interested.” An LOI gets into more of the details about the value being brought to the table, what a transaction might look like, and when the buyer forsees closing upon a transaction (i.e. 60 days of diligence upon signing followed by 15 days to finalize a definitive agreement and close).

11.) Signed Up

“If we can get this signed up by next week, I don’t see
any reason why we can’t close by the end of June.”


In addition to being time-sensitive (having an expiration date and time), LOI’s traditionally have a block for countersignature by the seller, asking the seller to agree to the preliminary terms of a transaction and to agree to work exclusively with said buyer for a certain period of time. When the seller / owner of a business returns a countersigned LOI, the deal is said to be “signed up” under exclusivity. While under exclusivity the seller agrees not to shop for a better or different deal, and to only work with this seller for the time being.

12.) Earnout

“What if we structure this thing? Are they open to an earnout?”


An earnout is the process of paying out a seller over time post-closing, often dependent upon meeting pre-defined benchmarks. If the Total Enterprise Value (TEV) is $25m with $20m cash-at-close and $5m in the form of an earnout, then that $5m will be paid out over time from the proceeds of the business in years to come, not at closing.

13.) Leveraged Buyout

“We use a modest amount of leverage in all of our transactions.”


It might seem like the old dirty word from the 80’s and 90’s, but majority-recapitalization LBO’s are still the standard operating procedures of Private Equity firms worldwide. Even if they don’t mention it up front, that PE firm in front of you will ABSOLUTELY be putting some debt on the business, and there is a damn good reason: it super-charges returns.

Consider this: you are going to acquire a majority stake in a business that all parties have agreed to value at $100m. You negotiate with the seller to acquire 80% and he will keep 20%, and he will continue to run the business day-to-day. So at this point you could write a check for $80m for 80% of the business, but instead you get a bank to pay for half of that ($40m) putting $40m in debt on the business, and you only have to cut a check for the other half ($40m). The business continues to grow, five years later the business has paid off all of the debt and is now worth $125m – nice work team! But more importantly, since the debt is all paid off, you truly own 80% of that $125m, or $100m. And how much cash did you have to invest to get to $100m? That’s right, $40m. That is a 2.5x cash-on-cash return giving you an IRR of 20%! So yes, that PE firm will be using debt and there is a damn good reason (so long as they don’t over-lever).

14.) Purchase Agreement

“I hope this is the final version of the DPA…”
“Don’t count on it.”


Definitive Agreement (DA or DPA), Asset Purchase Agreement (APA) or Stock Purchase Agreement is a legal document that lays out all the details of a transaction. This document is very much final / definitive, and oftentimes transactions die here from hangups negotiating covenants and restrictions, exact legalese, details surrounding taxation once the deal becomes real, new discoveries during diligence, and frankly many petty personality and ego clashes.

15.) Retrading

“I swear to God, if they retrade on this, I’m walking away.”


The process of retrading is, in my opinion, a horrible last minute attempt to change something in the purchase agreement often when you are down to the wire ready to close. This most often comes up as a “surprise” or “discovery” during diligence where new and previously unknown risks are used by the buyer to justify reducing the price. Some firms have a bad habit of throwing out big numbers with their IOI’s and LOI’s to get deals signed up, only to retrade multiple times in diligence to get to the value they actually wanted. This is not a common practice for most reputable PE firms, but something to watch out for none-the-less.

The world of Private Equity and M&A is full of success stories, successful exits, management buyouts, inter-generational transfers of ownership, growth, and long-term value, as well as letdowns and failed attempts. These key terms and pro-tips should help you avoid the potential pitfalls when pulling together a transaction. If you have other terms you would like explained (or believe would be helpful to others), just drop me a note in the comments below :).

Full disclosure, I spend the majority of my time connecting buyers and sellers as an M&A matchmaker, but am compensated by the buyers of the world. That said, I would be more than happy to learn about your transaction needs and see if one of the hundreds of buyers I work with might be a right fit for your business.

 Dan Herr on LinkedIn

View Daniel Herr's profile on LinkedIn


The above materials (as well as other content on my blog) are for informational purposes only and not for the purpose of providing legal advice.

In New Brand of Philanthropy, Nonprofits Invest in For-Profits

Amazing that looking back on my post comments about creating a Private Equity Non-Profit Fund, I also found this article from 2012. Definitely interesting:

Stephanie Strom of the New York Times Reblogged from DealBook:

Click to visit the original post

When the W. K. Kellogg Foundation set aside $100 million in 2007 to invest in companies that could produce both social and financial benefits, it was considered revolutionary. Historically, major foundations had used mainly stocks, bonds, real estate and other traditional asset classes to build their endowments.

Now, such investments are increasingly common — and profitable.

In 2010, the Kellogg Foundation invested $5 million in Wireless Generation, a tiny educational software maker working to improve public education in New York City. Just 219 days later, it made a 25.9 percent return after Rupert Murdoch’s News Corporationbought Wireless Generation for $360 million.

“The customer and market insights that the private companies we’ve invested in have, whether it be in food, health care, financial institutions or education, sharpened our ability to target our grant making and public policy efforts,” said Sterling K. Speirn, the foundation’s chief executive. “Similarly, I think the companies we have invested in are able to leverage not only our patient capital but the different kind of knowledge assets we bring to the relationship.”

Philanthropy is taking its cues from Wall Street and Silicon Valley. The language of finance is so common that it is sometimes hard to tell the difference between an investment conference and a fund-raiser. Grants are referred to as investments, and public-private partnerships as innovations. Money used to buy vans, computers and buildings is called growth capital.

“It’s not just the language that is changing,” said Antony Bugg-Levine, chief executive of the Nonprofit Finance Fund. “The actual distinction between the two sectors, for-profit and nonprofit, is starting to collapse.”

The shift stems from a new generation of philanthropists, like Bill and Melinda Gates, Pierre and Pam Omidyar and Steve and Jean Case, hoping to stretch their dollars. As they see it, the pool of philanthropic assets — even at a whopping $4 trillion-plus — is too small to make a dent in seemingly intractable social problems like malnutrition, chronic homelessness, water quality and sanitation. So they are trying to find ways to reuse existing financing and to attract new types of capital.

“If we really want to produce transformational change, change in a disruptive, exponential kind of way, there is going to have to be more than philanthropic dollars involved,” said Steve Goldberg, a social investment adviser at Caffeinated Capital, which advises investors, governments and nonprofits.

In essence, the philanthropists want to enlist the capitalists — and they are making

Read more… 786 more words




Meditation: On the Purpose of Consciousness

If in our life we are meant to experience life, learn from it and pass on what we learn; what is the end to which we arrive in this infinite loop?
What are we ultimately striving to learn? To build? What foundation are we forming that future generations may complete our work? Is it all in an effort to travel as far as we can and collectively interact with as much of the universe as possible? What does that lead to once we have collectively crossed all space-time? Is it as simple as our construction of a new synthetic universe within our own collective consciousness with riddles for embedded worlds, such as this, cascading up and down forever in an attempt to continue the loop? Is it just turtles on the backs of turtles all the way down?
I welcome your thoughts.

Meditation: On Fear & Success


Is fear anything more than just that: Fear? Any fear we have likely has no basis in reality – it is often not an actual harm to the body, but merely an un-choice based around perception of outcome without testing for bounds of actuality. Fear by nature assumes the worst outcome while not allowing for the possibility of the best.

What if instead we chose to try? Try for the best whilst controlling for worse cases all while attempting to not be presumptuous?

Fear is black and white.

But life – Life is clearly grey.

Life allows for a hue of successes and failures on a curvaceous path filled with serendipity, nuance, finesse, idiocrasy, opportunity, despair, illusion, doubt and achievement.

Life allows for more than one outcome, no outcome and all outcomes together. Perhaps the only true hurdle between fear and success is choice – with the rest being determined action? Doing what is feared one step at a time until what was once feared becomes commonplace and even mastered.


I welcome your thoughts

Why Artificial Intelligence Is Human Evolution


“Fear the AI!!!” they say.

What happens once superintelligent or even human-level AI exists? Once it meets a human? Does AI instantly dominate? Visions of Terminator-style Judgement Day and human extinction abound. But once human-level “artificial” intelligence exists, won’t it also be subject to complex emotions and states of mind like fear, love, compassion, anxiety, and the propensity to overthink simple problems? Won’t it/they also be constrained to the laws of physics, the temporarily limits on their hardware and available resources? Won’t these machines need as complex of a modern ecosystem as we have now?

While at Comic Con Silicon Valley the weekend before last, Danielle and Astro Teller (Director of Google X) hosted a “Superbabies vs AI” panel. While fairly scripted and a little hokey, it touched on some very important topics.

When I asked Astro after the presentation if we are too far away from viable humanoid AI for something like Boston Dynamics to be a good investment in the near-term (given Google/Alphabet’s pending sale of that company), he said “Back to the Future got a lot of things right, but also a lot of things wrong.” While humanoid robots are cool, he said, there are leaps and bounds of better (and likely more profitable) priorities to focus upon before we get to viable productized humanoids like in I, Robot. He specifically mentioned narrowly focused improvement to specific tasks like the safety and well-being of human lives (i.e. self-driving cars).

So you’re telling me there’s a chance…

avengers_age_of_ultronSo just because Marvel and others can help us picture an AI humanoid, doesn’t mean it will happen tomorrow. And even if it could, just because you or any all-connected Ultron AI wants to make a newer, faster, better computer doesn’t mean you actually have the facilities to build it. Plans to build a new processor that would be 10x better than status quo don’t necessarily beget the refined silica or the best seed crystal to grow the perfect ingot. Or the clean room to manufacture. And even when you know how to procure all these things, you still don’t have the infrastructure. Faster trucks, logistics, layers-upon-layers of next-level manufacturing businesses, and communications hardware for your next-gen product. Higher speed wireless communications require new cell towers and hardware, which require new fiber optic cables or satellites, all that new bandwidth requires new switches and data centers, and from there the need for more energy and environmental controls. The list of requirements for seemingly minor upgrades to hardware and processing power cascades down to layers of complex physical action. One human-level AI will not take over the world (at least not without help 🙂 ).

Re-framing “Human vs AI”

To be clear, while complexity is a hurdle, I’m not saying its the reason humans win in Human vs AI. I am saying that “Human vs AI” is the wrong question and context entirely. Instead we should consider that Artificial Intelligence can become the child prodigy and torch bearer of the human race.

Imagine your actual child’s consciousness embedded in a better body. What if instead of thinking about AI as our eminent ruin, we were to think about him/her as the self-directed evolution of our species? Think about the possibilities – our own children with all of our strengths and none of our weaknesses. No need to breathe in polluted air or even breathe at all in say deep space or under water. No need to continue the destruction of earth with the constant consumption of only organic matter. No lifetime limited to 75 years, or need to rest, or physical constraint to our world, or solar system at all. Is that not what we would wish for our children? To exceed us – an ability to grow beyond our limitations? We will all die some day, but if we birth, raise, educate, and set free AI humanoids into our universe, they will be our offspring – the new humans. Conscious beings created by us and just like us with choices and consequences. The ability to do wrong and right. The ability to kill or create. The potential to carry the torch of our intelligence, our culture, and our spark of impossible life throughout the universe.

Every species eventually dies – it is only through evolution that life remains.

If you haven’t yet, you should read “The AI Revolution: The Road to Superintelligence

I welcome your thoughts…


Why NO ONE should drive for Uber in Tahoe

Lake Tahoe Uber Drive Says No More

Let me start by saying, I have loved using Uber for convenient rides everywhere from Sydney, Australia to Boston to San Francisco and back again. I am a huge proponent of using Uber in most situations…

…that said, I ran a little experiment over the Holidays when Uber was launching in my hometown in North Lake Tahoe and found that as an Uber Driver in Tahoe I was losing money or barely breaking even at best. Not good! My best trip was netting $1.66 on a $6.00 fare. My worst – being down $12.62 on a 2.5 hour foray (last time I drive to South Lake to pick someone up). Now given, you can say I am only out money if I include wear-and-tear and use the standard mileage rate ($0.575/mi) for my expenses, but even just taking into account direct fuel and maintenance expenses I am making well less than minimum wage while decreasing the value of my car at the same time.  Bottom line is, something needs to change with Uber in Tahoe before every driver out there learns the sad truth – it is currently a money losing proposition.

Here is my threefold take on Tahoe’s Uber-problem:

  1. Tahoe is split by two states and you can only pick up in one making most trips uni-directional;
  2. There are very few in-town trips; and
  3. Uber is subject to what I will call the populational gravity effect.

The result is unsustainable earnings at best unless you assume no incremental wear, maintenance or cleaning:

 Earnings before Taxes after Taxes
– after Uber Fee, Federal Mileage & Phone Data $ 1.53/hr $ 1.14/hr
– after Uber Fee, Fuel & Maint (prorated) & Phone Data $ 6.71/hr $ 5.03/hr
– after Uber Fee, Fuel & Phone Data (no maint/wear) $ 12.57/hr $ 9.43/hr

(more about these numbers below)

Two States

Every Uber forum will tell you not to drive anywhere between trips – it is a useless expense. Since Tahoe is split by two states, many of your trips as a Driver become one-directional because if you pick in Nevada and drop off in California, you have to scurry back to Nevada before you can go back online and begin accepting trip requests again – and those new riders often want to go back across the state line. This means that your costs are roughly double for every trip because you cannot just pick up another trip where the last one left off. If you are a California Driver in Truckee, Tahoe City or South Lake this may not be as much of a problem for you, but I would love to hear your input.


Populational Gravity Effect

By the nature of taking people where they want to go, Uber naturally has a gravitational pull toward populated areas which means if you are working in a less populated area (i.e. Incline Village, Nevada – pop 8,800) near more populous areas (Reno [250,000pop], Carson City [54,000], South Lake Tahoe [24,000], Truckee [16,000] etc), you are highly likely to have a trip outside of town to one of these other more populous areas every day. Once you drop someone off in a bigger town/city you are more and more likely to continue receiving trip requests within that area. If you don’t live in the biggest city/town in your area and you drive for Uber, good luck – every driver eventually receives a trip to that city and at some point you have to return home, only to end up getting sucked into that city again the next day by its inescapable gravity field.

A typical day driving in Tahoe:

  • Daytime trips to/from Ski Resorts primarily:
    • Mid morning (8-11am)
    • Mid afternoon (3-4:30pm)
  • Evening Trips to/from
    • Casinos
    • Bars
    • Restaurants
    • Hotels
    • Rental Homes

Here is a sample of some trips from Incline:


By the numbers

I invite you to look at my numbers too and tell me what you think: danherrdotcom.files.wordpress.com/2015/12/uber-tahoe-costs-29-dec-2015.xlsx


I can see how Uber would claim a driver “makes” more than $20/hour – but that is before Uber fees, costs to operate etc. From my experience, you can show that during my actual trips (not including before or after mileage) my fares were $282.05 for the 5hr, 14 min and 21 sec I spent “driving” on trips – that is $53.83/hr, but remember I can’t just turn around and pick someone up where I drop off most of the time – I have to drive back to Nevada, and at some point return home. If I include the hours driving to pick up and return from dropping off that quickly turns to $21/hr. But that is not an accurate number – you have to pay Uber, you have to pay for Fuel, and somewhere in there needs to be maintenance and phone costs:

Total Fares/Sales $282.05
  Uber Fee $62.85
  Safe Rider Fees (reimbursed by Uber for Tahoe) $0.00
  Mileage to start (@ $0.575/mi) $34.99
  Mileage on Trip (@ $0.575/mi) $79.44
  Mileage returning (@ $0.575/mi) $83.46
  Cell Phone Data $1.59
Total Expenses $262.34
 Net Income $19.71
 Taxes (25%) $4.93
Net Profit $14.78


Breaking this down by the total amount of time I was on the road:

Trip Time 05:14:21 5 hrs 14 min 21 sec
En Route Time 07:40:39 7 hrs 40 min 39 sec
Total Time 12:55:00 12 hrs 55 min 0 sec

Dividing my $19.71 of pre-tax earnings and $14.78 post-tax by 12 hrs and 55 minutes gives you the $1.53/hr and $1.14/hr respectively that I gave above.

Of my driving it broke down like this:

Mileage (mi) (per)
To Start 61 18%
Trip 138 40%
Return 145 42%
Total 344 100%

I understand the argument that the Federal Mileage rate of $0.575/mile might be a bit high depending on your vehicle and the actual wear-and-tear, so I included a second and third calculation below. The second set of numbers ($6.71/hr & $5.03/hr) includes 87 octane Fuel prorated by mileage between fill-ups and Maintenance by mileage based upon my 12-month average maintenance expenses (oil changes, tires, tire rotations, checkups, cleaning supplies, etc), but does not include any incremental depreciation or wear-and-tear. The third only includes fuel. For me those numbers worked out to $0.17/mile for fuel and $0.22/mile in maintenance for a total of $0.39/mile.

 Earnings before Taxes after Taxes
– after Uber Fee, Federal Mileage & Phone Data $ 1.53/hr $ 1.14/hr
– after Uber Fee, Fuel & Maint (prorated) & Phone Data $ 6.71/hr $ 5.03/hr
– after Uber Fee, Fuel & Phone Data (no maint/wear) $ 12.57/hr $ 9.43/hr

Again these numbers do not include any payment for my time sitting around waiting for a request to come in – simply starting when I accept a trip and stopping when I get back in my workable area.


What I have surmised is that the Balance of Uber Earnings (green line) as a function of mileage for an Uber Drive in Tahoe is a losing proposition:

Uber Far & Expenses
Uber Fare, Uber Fee, other Expenses and Earnings Balance by trip distance (mi). View original interactive Google chart at jsfiddle.net/DanHerr/4cmuezmt/4/embedded/result/. Source file is available as well: danherrdotcom.files.wordpress.com/2015/12/dont-drive-for-uber-29-dec-2015.xlsx

I encourage anyone/everyone to have a look at my data and let me know if you draw any different conclusions – perhaps I am missing something. But my recommendation would be that until Uber figures out how to have us pick up across state lines or increases the fares in Tahoe, it is not worth your time to be an Uber Driver.


Notes & References

In all cases I went back online in Nevada as soon as I crossed back into Nevada again (Nevada drivers are automatically logged out at the end of a trip in California and cannot log in again while in California). There are some cases where I could have spent more time driving outside of my “area” (generally Incline Village and Crystal Bay), but at some point in the evening you need to return home. Generally if I waited for than 15 minutes without any request, I began moving toward home while staying online.

The above generally assumes:

  • $2.00 Base
  • $0.20 Per minute
  • $1.10 Per mile
  • $5.00 Minimum
  • $1.70 Safe Rides Fee when/if charged
  • 25% Uber Fee
  • 40 MPH average speed
  • 20 MPG fuel usage when needed
  • $0.575 Per mile standard federal mileage cost rate when used
  • 25% Tax Rate when there are any earnings

All of the above does not take into account that Uber’s earnings system has issues causing it to double charging me for Safe Rides ($1.70/ride) which they have confirmed via email they are working upon. Above I have taken the assumption that Uber will correct these issues and pay me the balance due of $1.70/ride.

Lehman Fee Calculator

Being in the Private Equity and investment banking world you run across the Lehman Formula in paying advisor/broker/banker fees quite often. Most all of us know the structure of 5%, 4%, 3%, 2%, and 1% for the first 5 million respectively, but sometimes it is just easier to have a calculator that does it for you. I couldn’t easily find any online and had some time to kill one evening, so I made one (includes option for Double Lehman):

Link to Lehman Fee Calculator by Dan Herr
Click image to access Calculator

Unfortunately, WordPress doesn’t let you embed Javascript (Myspace can tell you why :)), so either click the above image or go to:


The other ways to remember the calculation / keep it simple in your head are:

  • $150k for first $5m TEV + 1% of the balance; OR
  • $200k for the first $10m TEV + 1% of the balance


In the future I could add flat % (i.e.1% & 2%) as well as Reverse Lehman options to this calculator if enough people would find it helpful – please let me know in the comment section below.

Happy hunting!

Tomorrowland: Two Wolves – the real Cherokee story

Tomorrowland Two Wolves Original Quote

I posted this because I found the story to be very powerful after watching Disney’s Tomorrowland (2015) and wanting to know the two wolves story.

An old Cherokee is teaching his grandson about life:

“A fight is going on inside me,” he said to the boy.”It is a terrible fight and it is between two wolves. One is evil – he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.” He continued, “The other is good – he is joy, peace, love, hope, serenity, humility, kindness, benevolence, empathy, generosity, truth, compassion, and faith. The same fight is going on inside you – and inside every other person, too.”

The grandson thought about it for a minute and then asked his grandfather: “Which wolf will win?”

You might heard the story ends like this: The old Cherokee simply replied, “The one you feed.”

In the Cherokee world, however, the story ends this way:

The old Cherokee simply replied, “If you feed them right, they both win.” and the story goes on:

“You see, if I only choose to feed the white wolf, the black one will be hiding around every corner waiting for me to become distracted or weak and jump to get the attention he craves. He will always be angry and always fighting the white wolf. But if I acknowledge him, he is happy and the white wolf is happy and we all win. For the black wolf has many qualities – tenacity, courage, fearlessness, strong-willed and great strategic thinking – that I have need of at times and that the white wolf lacks. But the white wolf has compassion, caring, strength and the ability to recognize what is in the best interest of all.

“You see, son, the white wolf needs the black wolf at his side. To feed only one would starve the other and they will become uncontrollable. To feed and care for both means they will serve you well and do nothing that is not a part of something greater, something good, something of life. Feed them both and there will be no more internal struggle for your attention. And when there is no battle inside, you can listen to the voices of deeper knowing that will guide you in choosing what is right in every circumstance. Peace, my son, is the Cherokee mission in life. A man or a woman who has peace inside has everything. A man or a woman who is pulled apart by the war inside him or her has nothing.

“How you choose to interact with the opposing forces within you will determine your life. Starve one or the other or guide them both.”

–Cherokee Story



Beyond the Conflict of Inner Forces, by Cherokee Story | Awakin.org.


7 Steps to Creating An Epic Bestman Toast

Epic Bestman Groomsman Toast

I’ve delivered a number of passionate speeches in my life, and have never had an ounce of nerves in my body, but sometimes it is extremely difficult to find the perfect combination of words the describe the best dudes in your life. After hours and hours of research, thinking, writing, practicing and rewriting I came up with a simple, to-the-point and killer toast that brought down the house, so why not share it – maybe it will be of use to you:

1.) Briefly and generally thank everyone who made it possible:

Firstly, I just wanted to take a minute to thank everyone who has been a part of making today happen and putting together this beautiful wedding around Amanda and Andrew.

2.) Introduce yourself if MC failed to (chances are they will f* something up):

As you probably know, I’m Dan and I have the distinct honor to serve as the Best Man and deliver a toast to what is most truly the most beautiful couple, on their wedding day.

3.) Compliment Groom and/or both of them in a way that explains your relationship and provides some color for folks who may not know him/them as well:

I don’t know how much you all know my little brother, and my family, but my little brosif can dance. And he can jump, he can backflip, double backflip and gainer. This sucker can ski like no other. He can compete at basketball, soccer, tennis, golf, football you name it – against the best of them. My brother will see what you do then knocks it out of the park.

4.) Pour on some mild self-deprecation, references to other people in the audience and humor (ideally with some sort of cultural reference so the whole crowd feels pulled in and laughs)

I’m pretty sure when my parents decided to give me a little brother, they had a conversation that went a little bit like this:

God looked at me and then my parents and said: “Nancy. Steve. We have the technology. We can build him better, stronger, faster, and more aerodynamic. And we’ll give him a download of every Michael jackson move by the time he’s 3.”

5.) Bring it back to heartfelt and say something about why they are perfect for each other (reference the Bride)

But in all seriousness, what I mean to say by all of that is that my brother succeeds at anything he puts his heart to, and Amanda, from the moment he met you, his heart has been set on a lifetime with you.

6.) Welcome her to the family

I am thrilled beyond belief to have such a wonderfully talented new sister and I am looking forward to building a lifetime of memories with both of you.

7.) Wrap it up and don’t forget to propose a toast drink-in-hand:

A toast: to the bride and groom, to two amazing families brought together by them, and to a lifetime of new memories with new family.

That’s a wrap. If you keep it simple and to the point and follow my formula, I guarantee you will crush it. At the end of the day, everyone wants you to crush it as the Best Man, and even if you don’t, just toast to a lifetime of happiness together and you will have nailed it.

Best of luck!