Exit and Growth Strategies for Middle Market Businesses

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Accessing Growth Capital – An Alternative Source

By Peter Moore | Sep 19, 2011

In the best of times it’s still challenging to access growth capital for small and lower middle market sized companies.  Other than bank loans and economic development agencies there are few substantial sources of organized capital available for early and growth stage companies. However, some often overlooked sources of funding are the investment accounts of Self-Directed IRA and 401(K) retirement accounts.

Nest EggMillions of Americans hold hundreds of billions of dollars in their IRA and 401(K) plan accounts. Many are disappointed in the performance and seek alternatives to try and improve on their results as they continue to fund these accounts with regular periodic contributions.

Under the IRS tax code certain private investment transactions are permitted within the investment guidelines for IRA and 401(K) retirement plan accounts. (See you tax and retirement specialist for details) They include private equity investments, commercial real estate, loans to businesses and much more. Read more »

Capital For Business

By Peter Moore | Sep 06, 2011

It’s Always About Access to Capital

Whether you are a start-up entrepreneur, a growth oriented middle market company CEO, or a seasoned company owner seeking an exit sale to ride off into your retirement sunset – access to capital for business is and should be a topic about which business owners will be rewarded for maintaining a regular and up to date awareness.

Money LendingThe struggling start-up entrepreneur is generally forced to cobble together his own personal resources, those from willing friends and family, a helpful angel investor or two,  a few economic development agency grants and Venture Capital funding for those “lucky”  1% or 2% who are deemed worthy. It’s a tough environment, even in the best of situations, and most hope that their success allows them to never look back at raising capital. Read more »

Mergers & Acquisitions in an Uncertain Market

By Peter Moore | Aug 09, 2011

The stock market plunge yesterday is another clear indication that financial markets abhor uncertainty. Whether unchecked growth of government debt or unresolved corporate and personal federal tax policy, each of these, together with their European counterparts, have contributed greatly to yesterday’s  market Money Graphreaction. Unfortunately, the Federal Government’s tortured decision making of the last few months is expected to persist..

However, the Middle Market and Lower Middle Market for M&A remain strong and robust.  There continues to be clear signs that bank credit and private equity availability, as well as corporate acquisition appetites, are strong and supported by substantial available liquidity. These capital providers remain eager to commit to quality deals for well run U.S. companies.

So, in spite of the side show in Washington and on Wall Street, Main Street USA is alive and well and deals are getting done at a robust rate.  And while there might be some hesitation, the dynamics for a strong M&A market remain constant and will most likely improve as investors move away from public markets as they grapple with further adjustments.

Comments or questions are welcome and I’ll be happy to respond accordingly.

Posted by Peter Moore.

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Exit Strategy for Businesses

By Peter Moore | Mar 29, 2011

Successfully Finding Your Path to Life-After-Business

As investment bankers working with clients to develop their business exit strategy we deal with a whole constellation of their specialized advisors.  These include estate planning attorneys, tax accountants, investment advisors, insurance advisors, business attorneys and more. Together this group of trusted individuals will help our client to articulate a plan for achieving their financial goals through an orderly ownership transition. We will help the client minimize the impact of taxes, market the company to internal or third party buyers and ensure the continuity of value during the time it takes to complete. 

We have a process for doing this and it works very well. However, one ingredient that sometimes keeps business owners from moving forward with these best laid plans is a compelling personal vision for life in the second half of adulthood.

Bob Buford, author of Half Time, writes about shifting your game plan “from success to significance”.  By rediscovering a new purpose, joy and balance, entrepreneurs and business executives can use their talents and resources to make a new difference in the world.

Before pulling the trigger to sell their company, business owners need to have their own picture of a compelling future.  They need to articulate a vision for what they are going to do with their life after selling the business they have spent decades nurturing, growing and using to form their identity, reputation and financial success.  The decision to sell is every bit an emotional one as a financial one.

With a carefully thought out plan, Buford asserts, comes new excitement, a new passion forms and a clear purpose and focus draws them to make the change.  In Half Time, Buford helps people define a compelling, joyful and sustainable Plan B for life-after-business.  It’s about finding new purpose for the second half of life.

Whether you want to buy or start another business, pursue philanthropy, run a foundation, teach, coach or commit to something more than a lower golf handicap, check out Bob Buford’s book Half Time.  You’ll enjoy the conversation starters to help you formulate your own compelling and rewarding second half to your life. 

Posted by Peter Moore.

CFA Advises Developer

By Peter Moore | Apr 15, 2008

Case Study

Situation: Portland, Maine is home to several colleges, yet most feature limited housing. Rockport, Maine based developer Joseph M. Cloutier saw a need for a high-end apartment complex aimed specifically at the city’s 15,000 college student population. He asked CFA to arrange financing for the 100 suite complex designed to house 400 students. Bayside Village will meet the needs of students’ busy schedules, with amenities like sheltered parking, wireless internet, a fitness room, and bicycle storage.

Solution: Corporate Finance Associates designed a multi-layered capital structure including development stage funding, construction financing, term debt, and municipal tax increment financing totaling $26mm through a combination of short term investors, private equity, and bank financing timed to meet the projects funding milestones.