Advice for CEOs

As the recovery picks up speed, hundreds of thousands of America’s middle market companies appear poised for a new era of opportunity and growth. Gone are the days when declines in revenues and margins, excess capacity, anxious employees and restless investors were the general rule. Capital for expansion is on the rise. Credit is flowing again to private equity firms, armed with nearly $1 trillion to invest in growth companies, sufficient to fuel three and one half years of deal activity.

Emerging middle market companies typically lack enough capital to fund such priorities as product development, marketing and geographical expansion to the extent they would like. As these companies strive to get across the Capital Gap, they might consider a strategy to access more resources and attack more opportunities than they can on their own. A joint venture with one or more other companies offers a way to launch a variety of initiatives, including new products and distribution channels—even new lines of business.

Emerging growth companies are told to focus, laser-like, on their customers. An entire “M” of Newport’s Four Ms approach to helping companies get out of No Man’s Land describes how they develop their Market. Companies get off the ground making promises to their first customers and then struggling to fulfill those promises. Companies large and small swear by the mantras of customer focus and customer service. Many entrepreneurs take a me-against-the-world attitude and think that means it’s all about squeezing better prices out of your suppliers.

Does this sound like you? You’re an entrepreneur who leads a rapidly growing firm, which might be on the verge of taking off. But you’ve also hit a plateau. The momentum of your business is slowing. A big problem: you need capital to fund growth.