I just got back from a trip to AZ to visit a health and fitness related company that is seeking growth financing. These guys have developed a marketing machine that employs web marketing techniques to sell product. And they sell a lot of it. They have some interesting plans to open up other channels and change their product mix, and they are seeking capital to fund those efforts.
Despite what you may have heard about banks and the capital markets, we will get this company financing offers. There are investors and lenders that are looking for ways to put their money to work, and there is nothing like a strong management team with a track record to get their attention. Although it will be up to the owners of the company to decide how much to give up, either in debt or equity, to obtain the cash. This economy makes cash more expensive than before, but cash has always been king so it isn’t that much different.
As I pointed out in my last blog post, one of our clients recently received a financing offer and the terms seemed the same than they always are. I personally raised money for a startup in the early 90’s (Ibex) and another in the early 2000’s (Wirestone). The terms (e.g. liquidation preferences, required dividends on preferred shares, warrants on debt, etc.) have always been there, although new and creative terms appear over time.
We’re looking forward to helping this company raise some growth capital.