NASGW Down SHOT Up
The Impeccably-Tailored Kelly McMillan Boldly Sports Cutting-Edge Mismatched Sneakers in San Antonio.
It’s like they gather the industry and put on a convention just for yours truly. The NASGW Expo is a special favorite industry gathering. I “discovered” it only in more recent years, and have grown quite fond of it. It seems to include just about everyone I hope to see, yet fits in about 1/10th the space as the SHOT Show. You can go from one corner of the hall (room) to the other in a 5-minute walk. You can cover all ten aisles in a half day even if you take your time at each booth.
For a modest annual membership fee an industry newcomer can join up and attend without jumping through all the hoops it takes to get into the SHOT Show. It’s below the radar. I suspect that one could get a booth more easily than at SHOT, where the wait lists are long, and the rules exclude many would-be exhibitors (like me – more on that below).
After 16 years flying to SHOT, NRA and NASGW, I welcomed the chance to avoid airport lines and drive to a show in my home state. As a relative newcomer to Texas, I know Texas is big – but only a week before the show I realized that a solo drive to San Antonio would be 5 hours each way plus Austin rush hour congestion. A last minute non-stop made more sense and gave me time to do some pre-show prep. Uber makes it even simpler.
San Antonio is a friendly place, and the Riverwalk was a great spot for my informal happy hour for friends and clients after the first day of the show. My culinary observation is that in the heart of Tex-Mex there is little to distinguish it from the Tex-Mex (aka “Mexican Food”) around the nation. I love it, but it’s like those identical Chinese restaurant menus with General Tso, Moo Shu, and Kung Pao. Reliably consistent across the nation, unlike a few generations ago. And I’m always happy to be proven wrong with stand-out restaurant recommendations for upcoming shows. I’m still dreaming of the fried chicken from Gus’s in Little Rock. Incidentally, the miracle of San Antonio was that four hungry guys looking for good food after happy hour found an open table on the river at a venerable Tex-Mex restaurant on a warm night, with menu prices that made the total bill less than a round of drinks in Las Vegas.
NASGW Secrets
The Most Photographed Booth of the Show
The hall is quiet, almost serene compared to SHOT where the energy and sound of 40,000 voices in conversation creates a buzz that reverberates even after one returns home. Foot traffic on the floor is light, with no backups. A lost lawyer looking for his next meeting can stop in the middle of an intersection to review the map without creating any congestion.
The quiet makes it easier to talk. And to listen.
The number one topic was the future health of the industry. Will the Trump slump continue? Is there really a slump? Who’s buying and who’s selling?
Here’s what I heard:
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- The overall industry isn’t suffering a down market, it’s merely experiencing a normal market after a big spike. Don’t compare 2017 to 2016, look back to 2015. There’s truth to this but there are exceptions. Some companies are doing great, and some are suffering terribly. During spikes the terrible suffering is almost nonexistent, but there will always be a spread of success levels in the industry in up markets or down. The ability to cut aluminum, mold plastic, or load cartridges is no guarantee of success in either market. (There must be some other factors – I wonder what they might be???)
- Companies are hearing from distributors that they might expect an upturn in six months. But one wise client reminded me that six months away is the usual summer downturn, which means that any real uptick is actually a year away.
- Companies selling legally threatened products (bump stocks and special triggers) might not be in an enviable position, but they appear to be selling in record numbers after the MGM Mandalay Massacre*. Fear is a great motivator. Make hay while the sun’s shining. I’m not sure if it supports this speculation, but the Slidefire folks left their booth empty. I doubt it was due to anything like shame, but probably because they were running round the clock to fill orders. *I use this term as a test to see if MGM’s lawyers are really aggressive about protecting their billion dollar brands and have an army of lawyers urging media not to use their brands in a natural slang way.
When “Big Money” Talks
I won’t name names (he reads the newsletter), and the word is second hand, but most notable word I heard on the near future economic health of our industry is something I’d bet the farm on. Baron Rothschild of the influential banking family is famously credited with the painful investing advice: “Buy when there’s blood in the streets.” Fewer people know that the conclusion of the quote is “…even if it’s your own.”
There were some of what I call “The Money Guys™” walking around the show, and like everyone they always had time to chat. The Money Guys weren’t shy about the fact that they are looking to buy companies. Or invest in companies, or provide a “needed infusion of capital.” They aren’t stupid, and they want a piece of the action. Clearly, they don’t think the industry is headed downward.
The Money Guys told me that they’d love to get insights into my hundreds of industry clients, and go through my books to see who’s slow to pay (very few ever are) or has other signs of financial distress they might exploit. Of course, client confidentiality is sacred and my lips are sealed. I might offer to my clients that if they are looking to exit the industry or to grow with an infusion of cash there are ample options out there right now, but my clients need to contact me – I can’t even hint to these guys who they might approach.
But the slap on the side of the head was the second-hand quote one of these Money Guys revealed to me. He was quoting “Mr. X” (a major industry name known to every reader of this newsletter – except perhaps Leo’s nanny, who tells me she enjoys reading the copy that sits on my coffee table).
“It’s a land rush out there!”
This is what the guy whose company presumably has a 9-figure value (probably not low 9-figures) shared with The Money Guys. This is Smart Money. Old Money. Big Money. And without hesitation they are scooping up all the Fire-Sale bargains they can find. It’s always darkest before the dawn, and some troubled businesses are selling now without knowing the sun’s about to rise.
I admire Mr. X, and find no fault in anyone buying from willing sellers. I also don’t fault the sellers who may be selling out of necessity or otherwise making the right choice for themselves. I convey this story in order only to spread what should be optimism. Those on the mountain top see the dawn begin to break before those in the valley, but daylight eventually reaches us all.
Some of you are probably wondering by now if my optimistic story is simply a tale to generate irrational exuberance that leads to more clients investing in certain legal services. That might be a fair suspicion, but those who have worked with me know that I strive to help my clients avoid wasting money on needless legal fees, and employ the best strategies to defer legal costs during the hard times, reserving and preserving opportunities without losing legal rights until a later time when finances are healthier. Besides, it turns out that for the types innovative companies who need my services there was and is no downturn; my firm’s own barometer makes it clear that 2017 is already ahead of a prior peak year of 2016.
So You want (Or Need) to Sell Your Company? Beware.
One thing I’ve learned from The Money Guys (at least the ones I trust the most) is that anyone dealing with The Money Guys without their own Money Guy is going to lose Their Shirt. The typical sale of a mildly distressed smallish company goes something like this: “Your company sucks, your assets are worthless, and you’re lucky we’re even talking to you. We’d be doing you a big favor to take your company off your hands.” It’s like when you get a lawyer letter that makes you think the world is going to end, until you get your own lawyer to calm things down and point out the strength of your position.
A professional money guy on your side might end up with a cut of the transaction, but you might get twice as much. Or 10x. I don’t know all the things they do, but there are ways to make a company look more valuable by implementing advanced business practices that the smart buyers will be implanting after the buy anyway. In my small segment we do our part by ensuring that your patent and trademark portfolio look (and are) as fat as possible. But there are numerous other business practices that only an expert can share. Anyone thinking of selling soon or in the next few years would be very wise to build a relationship with their own Money Guy – let me know if I can connect you to someone I trust.
Here’s food for thought. Smith & Wesson has acquired three of my past clients over the years. Thompson Center Arms (2007), Crimson Trace (2016), and Gemtech (2017 – for whom I did only a few projects some years before). Now with your assumptions about the relative values of those companies, consider that the first two sales were in the $100 million price range, and the third is reported at $10 million. I know that Gemtech had smart Money Guys, but this certainly illustrates what a difference a year makes.
SHOT Show Success Checklist
Looking ahead, time is very short before SHOT. With the coming holidays, the two months until SHOT may as well be a week. To a gun patent law firm, the SHOT Show is like April 15 is to an accountant. If you need something before SHOT, contact us now to ensure we can take care of it in time.
Here are the critical things you need to do to protect yourself before it’s too late.
- Search all new brand names before printing catalogs, packaging, and signage. Avoids expensive and embarrassing reprints.
- Apply to register all new brand names before revealing them publicly. Prevents competitors from filing before you do.
- Grab all relevant domain names on new brands. Keeps pirates from stealing your traffic.
- File provisional patent applications on all innovative new products before your competitors see them in your booth and beat you in the First-to-File system.
- File patent applications on any new products released at last year’s SHOT. It’s your last chance. If you wait more than a year you lose all rights.
Have a Happy Thanksgiving, and give us a call to get you ready for SHOT.
