Campaign 2016 and middle-market business: 4 of the hottest issues

February 22, 2016
By James S. Cassel

James Cassel headshotThe presidential candidates are discussing a myriad of key issues that could materially impact middle-market businesses, including everything from increasing operating costs to diminishing the local labor pool. As we make our voting decisions, it is critical for us to consider these and other issues and determine how our businesses may be affected.

Following is an overview of my take on four of the hottest issues likely to impact middle- market businesses: healthcare law, immigration, taxes and expenditures, the minimum wage and benefits.

Healthcare law. Some candidates want to eliminate Obamacare, some want to drastically change it, and some want to tweak it — any of which could change the benefits and/or costs for middle-market business owners and their employees. One thing many people agree on is that totally eliminating Obamacare is not an option. Some fundamental questions to consider: How would these scenarios affect your business and your employees? How will the proposed changes affect the costs for those covered, including higher premiums and/or higher taxes? Moreover, can you really take away what has already been given? Unfortunately, with all the rhetoric and one-liners without substantive, detailed proposals, not enough light has been shed on the actual impacts of the proposed changes.

Immigration. Candidates have varied views concerning the accessibility of much- needed H-1B visas as well the availability of other types of visas presently available permitting potential employees to immigrate legally. Depending on the outcome of the election and the policies adopted as a result, you might lose some of your existing employees or not be able to bring in new employees — all of which could have a negative effect on your business. H1-B visas and other methods of legal immigration are critical to filling the ongoing void in terms of access to qualified candidates with the right skill sets, which is causing many job openings to remain unfilled and is hurting middle-market businesses.

In addition, the United States is noted as a country that provides an education for the rest of the world. Some candidates might require foreigners who have received an education in the U.S. to leave the country immediately upon graduation. What a waste of our resources! It is important to consider how the loss of this potential employee talent could impact your middle-market business.

Our growing population is one of the main reasons the U.S. has enjoyed continued growth. This population growth has been driven to a large extent by immigration, which has supported the success of our middle-market businesses. We need a sensible immigration policy that allows appropriate people to immigrate to the United States so all businesses will have access to the quality talent they need.

Taxes and expenditures. Tax rates are likely to change. Whether we get a major overhaul to the tax system remains to be seen. Some advocate large cuts in government spending while others would expand government spending. Some candidates advocate an increase in taxes while others advocate a reduction. Others argue for a flat tax. Some may support the implementation of programs to encourage companies to bring more money back to the U.S. from out of the country to increase domestic investment or distributions to shareholders. This could help stimulate growth. Depending on what economic school you subscribe to, how you decide to vote and what ultimately happens with our tax rates and government expenditures, our economy could either contract or grow.

Minimum wage and benefits. Some candidates support an increase in the minimum wage and benefits, and an increase in entitlements. Few, however, have provided a realistic estimate of the costs or meaningful proposals on how to realistically pay for any increase. Other candidates advocate a reduction in entitlements, which by some estimates now total approximately 48.7 percent of the federal budget. They believe the growth is unsustainable. The costs on middle-market businesses will continue to increase and could have a negative effect on the economy.

Candidates have different views on wages. Some favor raising the minimum wage, which could lead to increased labor costs and force some business owners to cut jobs. It could end up causing middle-market business owners to deploy more technology to reduce overall costs of labor, and therefore eliminate jobs. This is a very difficult issue to tackle, as it involves a delicate balancing act between a sustainable wage and the labor costs of running a business.

Without a doubt, the outcome of the upcoming presidential election will have a significant impact on South Florida’s economy and middle-market businesses. It is important to invest the time to do your research and closely evaluate, among other things, how each of the candidates, if elected president, would affect your and the country’s bottom line.


James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. He may be reached via email at or via LinkedIn at His website is:

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Cassel Salpeter & Co. Represents Boxycharm in Recapitalization

MIAMI – February 10, 2016 Cassel Salpeter & Co., a middle-market investment banking firm providing capital raising services as well as merger, acquisition, divestiture and corporate finance services, served as exclusive financial advisor and facilitated a capital raise to recapitalize Boxycharm, a monthly beauty box subscription service providing high-end beauty and cosmetic products. The amount of the deal, which closed on February 3, is undisclosed.

The team at Cassel Salpeter, led by Director Joseph “Joey” Smith and Vice President Philip Cassel, identified and approached KarpReilly, the private equity firm that provided the capital. Cassel Salpeter assisted Boxycharm through the closing of the transaction. The capital will help grow the business, expand the management team, and fund innovative marketing initiatives to support its mission to continue to provide high-quality beauty products.

“We recognized that Boxycharm is a high-growth company with a strong management team, and we were eager to get involved with a company of this caliber and support its next phase of growth,” Philip Cassel said. “We enjoyed working with KarpReilly and look forward to working with the team on future deals.”

The deal was completed on a tight timeline, with the Cassel Salpeter team going to market in early November 2015 and closing the deal in early February.

“We greatly appreciate Cassel Salpeter’s ability to understand our needs and move quickly to address them by finding the type of strategic partner we wanted: one that would offer more than just capital,” said Joe Martin, Founder & CEO of Boxycharm. “From our first conversation, KarpReilly understood the passion and vision for the future of the company and we knew that was the start of what will surely be a long and successful relationship.”

Added KarpReilly Co-founder Allan Karp: “KarpReilly is excited to partner with Joe and the Boxycharm team. We are very impressed with what they have been able to accomplish by focusing on delivering a best-in-class experience to their subscribers and look forward to supporting them in their continued growth.”

Berger Singerman attorneys Daniel Lampert, David Black and Mitchell Goldberg represented Boxycharm. Ropes & Gray attorneys Daniel Evans, Darlyn Heckman and Michael Ross represented KarpReilly.

About Cassel Salpeter & Co.

Cassel Salpeter & Co., LLC is an independent investment banking firm that provides advice to middle market and emerging growth companies in the U.S. and worldwide. Together, the firm’s professionals have more than 100 years of experience providing private and public companies with a broad spectrum of investment banking and financial advisory services, including: mergers and acquisitions; equity and debt capital raises; fairness and solvency opinions; valuations; and restructurings, such as 363 sales and plans of reorganization. Co-founded by James Cassel and Scott Salpeter, the firm provides objective, unbiased, results-focused services that clients need to achieve their goals. Personally involved at every stage of all engagements, the firm’s senior partners have forged relationships and completed hundreds of transactions and assignments nationwide. The firm’s headquarters are in Miami. Member FINRA and SIPC. More information is available at

About Boxycharm

Boxy Charm Inc. is the premier monthly beauty box subscription service, delivering 4-5 full-size and luxury travel-size products of well-known, popular, chic, and up-and-coming cosmetic brands for only $21 per month. For more information, please visit

About KarpReilly

KarpReilly, LLC, is a private investment firm, founded by Allan Karp and Chris Reilly, whose primary mission is to partner with premier small- to mid-size growth companies and help them achieve their long-term vision. KarpReilly currently manages funds and affiliates with capital commitments in excess of $500 million. Over the past 15 years, the principals of KarpReilly have invested in, sat on the boards of and nurtured over 25 growth companies. For more information, please visit

Boxy Charms

AmeriJet, Jan 2016

Boxycharm participated in a minority recap and received growth capital from KarpReilly

  • Background: Headquartered in Miami, FL, BOXYCHARM is the premier monthly beauty box subscription service, delivering 4-5 full-size and luxury travel-size products of well-known, popular, chic, and up-and-coming cosmetic brands. BOXYCHARM’s unique value proposition is their ability to provide a combination of the newest and highest quality brands and products in full-size offerings, while most competitors offer sample-size products.
  • Cassel Salpeter:
    • Served as financial advisor to the Company
    • Ran a competitive capital raise process, identifying and contacting over 100 strategic and financial parties
    • Structured a minority recap and growth capital raise with a built-in option for a majority recap
  • Challenges:
    • Earn-out structure to increase valuation of capital infusion contingent on success-based performance benchmarks
    • Minority shareholder buyout
    • No prior relationship with investor
  • Outcome: In February 2016, KarpReilly Investments, LLC invested in BOXYCHARM. KarpReilly is a private investment firm based in Greenwich, CT.