Some of the most heated debates I have witnessed between executives within privately held companies have been about whether they need to obtain outside growth financing or should continue to fund growth through reinvestment. The arguments sound pretty much the same whether the outside money would come from private investors or an initial public offering (IPO).
Arguments about if a company needs to attract outside money… and if so, when and how much…typically flow from fear, assumptions, guesses, and jumping to conclusions based on another company’s situation. Arguments based on an absence of information often occur because the President has asked executives to report about the past more than create the future. Of course, that pattern can indicate that the company is ready for a new President or a CEO. At a minimum, the company needs a CFO instead of just a Controller and a CMO instead of just a Marketing Coordinator.
A CMO would answer the questions about market demand, competition, pacing, optimum size, etc. And the CFO would answer the questions about if outside money is needed, if so when and how much. The CFO also answers the questions about the costs and tradeoffs involved with outside money.
When outside funding sources start their due diligence, they ask about market dynamics, growth potential, anticipated use of proceeds, return on investment, etc. Members of the executive team deserve the same information that outside funders need. In fact, without clear answers from detailed scenarios and projections (provided by the CFO and CMO) the concerns of executives are inadvertently conveyed to prospective investors and funding does not happen.
When I am asked questions about the optimum timing for a company to seek growth financing, I find myself immediately asking questions about how well the company’s CFO and CMO create the future and provide answers that replace worry with excitement.
Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions. Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2013 is Ambler’s 9th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr.) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.
Known as The Growth Strategist®, Aldonna Ambler built and grew a suite of companies to help midsized B2B companies achieve accelerated growth with sustained profitability® A Certified Speaking Professional (CSP), Ambler has addressed over 2000 audiences and hosted a syndicated online talk show about growth strategies for 9 years. As a growth financing intermediary, Ambler raised over $1 Bil dollars for midsized companies. The winner of over 2 dozen prestigious national and statewide "entrepreneur of the year" awards, Ambler is available to speak about “profitable growth during any economy” and/or serve on the board of a growth-oriented privately-held company.