Novations new business model....Sustainable vs. Unsustainable
The old adage, "Hind Sight is 20/20" is spot on when it comes to what some refer to as legacy Novastar.
Here is what the new Novation has to say on their website about legacy Novastars business model;
"NovaStar’s business model proved unsustainable for the long term"
Just for the record....starting and operating an unsustainable business is NOT fraud, and confirmation of this fact is confirmed by Judge Ortrie Smiths comment, "Companies, the court said, are not expected to be clairvoyant and bad decisions do not constitute fraud.” As a result of this finding, a major shareholder lawsuit against Novastar and its executives was "Dismissed with Prejudice"
This brings us to Novastars/Novations NEW business model, and sufficeth to say, Novastar/Novation has survived, and here is a description of their new business model direct from their new website;
" Through hard work, perseverance, and a firm commitment to do the right thing, NovaStar
survived one of the most significant economic downturns of our time. Not only did it survive, it paid all
of its secured bank lenders. It exited the crisis with a seasoned group of founders and leaders who had
learned important lessons during the last decade. In addition, the company has significant realized
and unrealized federal tax losses, allowing it to mitigate income taxes on profits for many years to
come. This enhances the opportunity for growth and investment efficiency.
Leaders were convinced that if they could navigate NovaStar through the storm, they could use the
experiences gained to help other entrepreneurs grow and scale their businesses. In 2008, they began
reinventing NovaStar based on their core competencies: the ability to scale businesses and improve
execution of an original concept. Since then they have acquired five companies – StreetLinks Lender
Solutions, Advent Financial, Corvisa Services, Mango Moving and CorvisaCloud.
The reinvention prompted the company to change its name to Novation Companies, Inc., in order to
truly reflect the leadership team’s vision for the future. This name represents a core strength: the
ability to execute operationally at the highest level to bring new innovative technology-enabled
services to market. The retention of “Nova” in the name reflects a continued promise to shareholders.
Novation leaders are attracted to technology-enabled service businesses with a differentiated value
proposition for their customers. They look for companies that are founded on great ideas but need to
improve execution in order to grow. Novation assumes operational control of their subsidiary
companies and supports the companies with world-class technology, sales/marketing and training
services that a typical entrepreneur could not access.
Novation leaders use the power of their knowledge and integrated operations to bring the companies
to their maximum potential. They allow previous owners to focus on their passion and what they do
best, and Novation leadership handles the rest."
There you have it.....if anyone has any questions or comments about Novations new business model and whether or not its "sustainable", I would encourage discussion about it. Personally, I happen to believe it is,
but I realize I'm prejudiced due to my personal knowledge of this company and its leadership.
Please share your comments, thoughts or questions for this is what this financial message board is all about.