Advice for CEOs

Rely on yourself. Pull yourself up by your bootstraps. This is good, old-fashioned advice. But it doesn’t always apply to the need that all middle market companies share to finance their growth. Very few companies can finance expansion by internally generated profits alone.

When a growing middle market company defaults on a loan, it is common to blame the company’s misrepresentation or its mismanagement of the proceeds from the borrowing. In truth, many loans that go bad are the result of improper structuring by the bank or other lender. Many lenders and borrowers fail to structure financing to fit the company’s operational characteristics. Good banks and good borrowers can assure the quality of the banking relationship as well as the borrower’s ability to repay by having a series of conversations about the company’s credit needs and a loan structure that will serve the requirements of both sides.

The Difference Firms that are trying to get past No Man’s Land must deal with the Capital Gap, the gap between their current capital structure and the funding they need to finance growth. What about Venture Capital as an alternative in the current environment?

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.