Kathryn Mulligan | September 28th, 2015 | http://www.middlemarketgrowth.org
Despite the strong U.S. business climate and availability of capital, accessing growth financing can be challenging for small and midsize companies. To address these issues head on, the Association for Corporate Growth’s Chicago chapter is incorporating growth capital programming for minority-run businesses and middle-market companies into its fall conference.
ACG Chicago’s 16th annual Midwest ACG Capital Connection in October will feature the Minority Finance Forum, now in its second year, and the first-ever Corporate Connection. These programs will complement traditional conference features, including a private equity marketplace and one-on-one meetings between intermediaries and capital providers.
Expanding the Pipeline
Last year, ACG Chicago collaborated with the Minority Business Development Agency, an arm of the Department of Commerce, to host the Minority Finance Forum as part of its annual Midwest ACG Capital Conference. The Forum featured panel sessions addressing financing for minority-owned businesses and enabled participants to network with investors and capital providers.
ACG Chicago CEO Craig Miller notes that a sizeable pipeline—nearly $500 million of financing opportunities—came out of the event, and he hopes to see that figure rise following this year’s Forum.
The chapter has worked directly with the MBDA for five years to promote access to capital for minority business owners, an effort that led to last year’s Forum. Miller cites a lack of “awareness, networking and relationships” as key stumbling blocks for businesses as they begin looking for outside capital to grow.
“It’s the same thing that anyone entering the market for the first time encounters,” Miller says. “A lot of business owners have grown through family and friends and organic growth, and may be reaching out for outside investment for the first time. That’s a new world.”
While many of the challenges facing minority-owned businesses are similar to those of other companies, they may also qualify for particular types of financing with minority certification. ACG Chicago and the MBDA introduced the Forum not only to facilitate networking but also to educate participants on the financing options available to them.
Miller says the success of last year’s Minority Finance Forum revealed that access to capital is not just an issue for minority-owned businesses. Feedback after the event indicated the wider middle-market community, too, is challenged when seeking capital for growth.
That realization led ACG Chicago to develop its Corporate Connection, designed to provide networking opportunities and education for corporate executives looking to grow their companies.
Tim Golomb, executive director of investment bank Dresner Partners and a member of the Corporate Connection planning committee, notes that while deal flow today is strong, it remains at a level below what the abundance of capital would suggest.
“What that says to us is that a lot of deals don’t know where to look for capital and don’t know the different flavors that capital can come in,” Golomb says.
Both equity and debt financing providers have become more flexible and have added more customization to their offerings, he says, adding that while this is great for businesses, corporate executives need to understand their options and establish relationships in advance.
“It’s about forming these connections, earning trust and credibility and developing those, so that when a corporate (executive) does have a need, whatever it may be, they know a trusted adviser on the other side,” Golomb says.
Besides networking, the Corporate Connection also includes two panel sessions. One will focus on various C-level perspectives of corporate development strategies to maximize growth through strategic investment. The second will showcase carve-outs as a growth strategy, whether divesting an underperforming division to focus on core competencies or as a platform acquisition to enhance more targeted strategies.
Golomb’s committee has enlisted Financial Executives International, an association for senior financial leaders, as a collaborator. FEI members will bring a corporate finance perspective to the panel discussions, while ACG members will share other C-level views on governance and due diligence. Both parties will provide first-hand accounts of the strategic initiatives employed to drive growth in their firms.
ACG Chicago expects the program will broaden the audience for its Midwest ACG Capital Connection by incorporating a new perspective and including FEI members. Golomb anticipates this relationship will benefit midsize companies.
“It’s ultimately going to be an integrated force within Chicago, with FEI representing the financial executives, ACG representing the capital providers, and both groups working with executives focused on growth, all dedicated to the middle market,” he says.
ACG Chicago’s 16th annual Midwest ACG Capital Connection will be held Oct. 19-20, 2015. To learn more and to register, visit the event website.