In the world of finance, money is more than a mere measurement of wealth – it’s almost as revered as a religion. Based on the attendance at this year’s ACG (Association of Capital Growth) National Conference, this annual gathering of the financial faithful may soon be known as the “mecca of finance.” What began three years ago with fewer than 500 attendees has exploded into an enormous event attracting nearly 2,000 finance professionals, no small feat since each attendee paid a substantial registration fee.
So what do we learn from spending three days in the desert with thousands of people who collectively represent more than $100 trillion dollars of capital?
1) Money has become a commodity: The sheer breadth and depth of the available capital at this conference was staggering. While the dollar volume is enormous in its own right, even more impressive was the fact that every conceivable form of financing was represented. Equity ranged from control to minority to management buyouts; representing debt were senior, junior and asset back lending.
2) Fundamentals still count: Despite a glut of capital, money is neither stupid, nor blind. Companies with strong cash flow ($5 million +), good margins (10% +), solid growth prospects (+10% top line), leading/defensible market position, high barriers to entry, no customer concentration and strong management teams have a multitude of financing alternatives.
3) Something for everyone: In today’s market, and with the right financial advisor, companies that don’t meet the rigorous aforementioned standards can attract institutional capital to provide for growth, liquidity, estate planning, management buyouts, etc. Additionally, regardless of your industry or asset class, there is a group focusing on and willing to invest in that particular space.
4) All money is not created equally: Attracting a company to provide financing, in whatever form, is only part of the battle. Finding the right financial institution to partner with is the key to any successful transaction. Today’s market has become so competitive that many of the financial institutions have begun to provide value-added services, in addition to simply writing a check. Some of these services include increased industry expertise and contacts as well as in-house C – level executives, such as CEO’s, COO’s and CFO’s.
Whether you are looking to sell, buy or recapitalize your business, today’s market offers a wide array of financing alternatives. Having the right financial advisor assist you throughout the process can be the difference between success and failure.
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