Jason Galanis
Jason Woodruff Galanis, (b. 1970) at New York Hospital on the Upper East Side of Manhattan, and raised in Greenwich, Connecticut, is an investor in financial technology companies and trademark inventions since 1988 and is currently a principal of Holmby Companies. He coordinated the leveraged buy-out of Internet Billing Company (IBill), a unit of credit-card processor Intercept (NASDAQ: ICPT). iBill had been acquired in 2002 for $104 million in cash and was the largest Internet ecommerce company in the US. Galanis organized the purchase in 2004 for only $37M
History
Galanis is an investor who concentrates on intellectual properties. Many of his investments are primarily focused on start-up companies and high-risk turnaround investments with financing or capital structure challenges. He attended the Brunswick School in Greenwich and majored in history at UC Santa Barbara. He completed the Advanced Management Programme at Templeton College, Oxford University. He is married and lives in London, UK and Bel Air, California.
Financial and Investment Career
Triage Information Systems
Galanis began his career while still in college by acquiring delinquent loans from banks. He developed a distinctive credit-scoring algorithm used to apply a credit ranking and “collectibility” index to non-performing debt. To sell the technology, Galanis co-founded Triage Information Systems, a purchaser of consumer debt. It closed transactions worth over $2 billion in loans. One third of Triage was owned by Electronic Data Systems, and was financed by a $200 million line of credit provided by Cargill Financial Services, a unit of the grain giant of the same name.
Service One International
Galanis led the leveraged buy-out of Service One International, in Sioux Falls, South Dakota established in 1982, to issue VISA credit cards to consumers unable to obtain credit elsewhere. In 1996, he led the refinancing and discounted payoff of the $200 million Cargill loan with Morgans Waterfall Vintiadis, a $2 billion hedge fund that Cargill introduced.
The Credit Store™
Triage and Service One, along with its associated registered trademarks, The Credit Store™, and the patent-pending financial algorithm Galanis invented, were collectively sold in 1996 to a New York based investment group.
Vianden Capital Management, LLC and Thesseus International Asset Fund
In 1997 Galanis was a principal of Vianden Capital Management, L.L.C., the investment advisor to Thesseus International Asset Fund, a closed-end, split income venture capital fund that he founded to invest in early-stage financial services companies in North America and the UK, which he founded in December 1997. He was a managing director of KnightVianden, Oxford, UK - a financial services company - which he co-founded with Dr. Knight and Kevin Washington in October 1998.
Incubator Capital, Emergent Financial, and XTRAN™ In 1999, Washington and Galanis found funding for a public entity, Shanecy, and renamed it Incubator Capital. Incubator entered a transaction to acquire Themeware, an Internet business that used older media technology to sell websites and provide lease lines of credit to small to medium sized businesses (SMBs). ThemeWare was chaired by Gil Amelio. He and the board implemented Galanis’ plan to cross-sell VISA credit cards through ThemeWare’s distribution channels, including direct response television of The Internet Tool Box™ with spokesperson Richard Karn from the ABC sitcom, “Home Improvement”.
After the market fell in 2000, equity and debt financing for dotcom companies was unavailable, Galanis stepped down as president and Incubator investments were terminated with little fanfare.
Galanis restructured Incubator as Emergent Financial and then acquired a start-up financial technology business called XTRAN™, which was a money payment and transmittal company similar to Western Union. XTRAN developed proprietary technology that utilized accessible banking infrastructure to electronically transmit money throughout the world, and with a focus on Mexico. It used credit card point-of-sale (POS) terminals found in retail stores. Instead the standard paperwork of this type of business, XTRAN was a fully automated technology.
After September 11, 2001, the U.S. Congress passed the U.S. Patriot Act, which, among other things, significantly altered the regulatory requirements for all financial transactions. This rendered XTRAN technology inadaptable to new stringent regulations, and the company disbanded.
General Media, Penthouse International, and Vector Partners
In 2002 Galanis acquired select Internet licensing rights and trademarks, including the original rights filed in the U.K. where founder Robert Guccione’s first began the company named General Media, a subsidiary of Penthouse International Inc. (publisher of Penthouse Magazine). Galanis and Guccione reached agreement for the acquisition of the rights to Penthouse’s brand for use on the Internet and Galanis agreed to finance Guccione’s magazine publishing business.
In October 2002, a public company of which Galanis beneficially owned 73% acquired 99.5% of General Media, the parent company of Penthouse. Galanis was the first outside equity shareholder of Penthouse since its founding, and he continued to invest in Penthouse through 2003, when Guccione ordered the company placed into voluntary bankruptcy protection. Galanis then lead the investment group that invested $68 million in capital with the bankruptcy court to restructure General Media through chapter 11. Galanis and his financial partner, Luis Enrique Fernando Molina (of the Molina family that owned PepsiCo on Mexico) from Mexico City, led the refinancing group, which was participated in by Post Advisory Group, a $9 billion division of Principal Financial Group, the life insurance company.
Guccione Mansion
In January 2004, Galanis was the principal equity financier of the acquisition of the Manhattan mansion at 14-16 67th Street, that Bob Guccione bought and restored in 1975. The mansion is built of two smaller buildings, first constructed in 1879 and 1905, and merged into a 48 foot wide mansion in 1920 for Jeremiah Milbank.
For eight years, Guccione had unsuccessfully sought financing for his home. The mortgage holders then foreclosed on it. Galanis, along with his company, Vector Partners, successfully created, negotiated and closed a financing structure, and the property was acquired for $26.5 million from the lenders. Vector invested the equity down-payment on the house purchase. Molina had become the control shareholder of Penthouse International in November 2003, and he granted Guccione a lifetime lease at one dollar per year.
Galanis had been made the co-trustee to the Molina/Vector investment trust, which not only held multiple Molina assets, but was also a major shareholder of Penthouse. Galanis was made responsible for North American investments for part of the Molina/Vector portfolio.
Penthouse Media Group, iBill, and Latin Penthouse In 2004, Galanis organized the leveraged buy-out of Internet Billing Company (iBill), a former division of PHSL Worldwide, Inc. iBill had been acquired in 2002 for $112 million in cash and was the largest Internet ecommerce company in the US. It maintained the most extensive database in the nation, with over 29 million unique records, on consumer transactions for adult content. Advised by Galanis, Molina consented to the acquisition of iBill by Penthouse International in March 2004. The iBill database and the iBill proprietary financial technology were to be combined with the Penthouse intellectual property to create a fully integrated ‘new media’ company on the Internet. The plan was part of the efforts of General Media to emerge from bankruptcy protection.
In late 2004, Galanis elected to exit the US public markets. He arranged a $16.5 million bond and preferred stock placement, and simultaneously arranged the acquisition of 40% of Penthouse Media Group, along with the acquisition of 100% of iBill, by a publicly traded company. The parties consented to a plan of reorganization that ceded 60% control to the bondholders. Financier Marc Bell became the new owner and Galanis sold the U.K. trademarks to Bell as well.
Latin Penthouse
In 2005 after the bankruptcy plan was accepted by the court, Molina acquired the rights to the Penthouse trademarks for Latin America from Penthouse Media Group. Since then, Molina opened the club, Penthouse Tower on Paseo de la Reforma in the business district of Mexico City. Prior to initiation of major construction, Galanis acquired 50% interest in the project in exchange for $7 million of financing. In January 2007, the 100,000 square foot facility opened to 1,800 guests with 70 media outlet in attendance. Molina and Galanis Say that they will commercially develop the registered Penthouse trademark across Latin America in various venues and to cultivate a Latin Penthouse without the $50 million post bankruptcy debt burden of the US parent company.
Geomas
Galanis met Geomas managing director John Veenstra in late 2001. Veenstra was working at his technology company called Zland, which had previously in the prior year filed its IPO with the S.E.C., an IPO sponsored by Credit Suisse First Boston (pulled due to dot com bust). Zland sold software to small businesses (SMBs) and is an inventor of several technologies, While Galanis was winding down his own investment in an SMB technology company (see above - ThemeWare/Internet Tool Box). in 2001, Veenstra had organized a strategic deal with Sprint in 2002, and a public company that Galanis was ceo of entered into a transaction with Zland and Sprint, the telecommunications company. In January 2003, Galanis’ relationship with Veenstra expanded when Galanis invested in technology that Veenstra had developed for geographic local search. Veenstra had developed and commercialized the technology in August 1995. The Zland.com website circa 1997 shows the continuation of the commercialization.
Companies advised by Galanis invested in Geomas, an intellectual property holding company whose principal assets are comprised of a US Patent with applications in the small to mid-size businesses industries as well as in interactive advertising, U.S. Patent Number 5,930,474 . Since 1995 when Galanis’ first patent was filed, all the way through his investments in the Penthouse trademarks, Galanis has made strategic investments in intellectual property. Geomas represents a watershed technology protected by a 20-year monopoly period . Galanis and developer John Veenstra formed Geomas to commercialize the technology. Geomas uses the patented GeoTagTM technology. GeoTagTM geographically tags search and advertising . In 2007, Galanis arranged the Round A financing of $20 million for Geomas supplied by a single institutional investor.