Raising Capital Event

With billions of dollars in uncommitted capital, many private equity experts are saying: “Now is the time to invest…”

Join the CEO Roundtable
Thursday, May 15th, 2008:
10:30 am – 3:00 pm
at The National Club, Toronto.

Private Equity Investors are Ready to Spend
“The question is will market volatility quell the interest of private equity investors?”
says Peter Plows of Cobalt Capital. “Absolutely not! Private equity firms are now looking for quality deals more actively than ever.”

Cobalt Capital is a private equity firm made up of former business owners and operators seeking to help private companies grow and innovate by investing their own capital and contributing operating expertise. Cobalt Capital partners have significant business and entrepreneurial experience in a wide range of disciplines, sectors and geographies and work closely with their portfolio companies to help them achieve their growth objectives.

My Journey to Private EquityPatrick Bermingham, Bermingham Construction Ltd.
Patrick Bermingham, owner of a Hamilton based construction enterprise, discusses what his private equity partners have done for his company. As a fourth generation business owner, Patrick had a difficult decision to make; and the journey was not without its challenges. Learn about the key issues that needed to be resolved and the lessons learned. Find out what made the partnership with private equity triumph.

Iain Scott, Executive Coach & Roundtable Facilitator.
“CEO Roundtable events are organized to give business owners the opportunity to exchange ideas and gain insight into key issues that growing firms face.” This highly interactive session is designed to explore topics that are important to company growth strategy.
Please note that space is limited to maximize the value to attending CEOs by ensuring a highly interactive environment.


Map Location & Parking
Cost
CIF Members: $90.00 + GST

Non-members: $148.00 + GST
To Register (Please note, business owners and CEOs only):
Please email:
events@strategyinternational.com or call 416 961 0740 and ask for Anastassia

Private Equity Gets Respect

"Private equity is trying to improve its image in the public eye," says John Loewen, but they may not have to worry. According to a recent poll, politicians are the least respected and private equity did not even get a mention.
Why do teachers get paid less than lawyers for example, or politicians, or even TTC ticket collectors? If people were paid according to how much they were respected, then politicians may have a problem. Here's the quote:

"In the online survey of a representative national sample, a large majority of Canadians say they have a great deal or a fair amount of respect for doctors (94%), police officers (83%) and teachers (83%). At the bottom end are politicians (25%), lawyers (44%) and journalists (49%).
The results of the current survey are especially noteworthy when compared to those of an identical poll carried out by the Angus Reid Group in 1994. Interestingly, over the past 14 years, respect for every single profession—with the exception of doctors—has diminished across the country.
The professionals who endured the most noticeable slump are journalists. In 2008, less than half of all respondents say they have a great deal or a fair amount of respect for journalists (49%), compared to 73 per cent in 1994."

So you want to stay in your pond?

There’s an old Scottish tale of a frog living in a damp well. One day, another frog from a large pond hopped past the well. Interested in all things, this adventurous frog looked down into the dark depths and leapt inside.

Intimidated by the interloper, the first frog asked, “Who are you and where did you come from?”

The pond frog said, with a nod at the top of the well, “A large pond filled with water many times the size of this well.”

“How big is this water?” The well frog pointed to a boulder at the edge of the well. “Oh, many times the size of that boulder.”

“As big as that?” the well frog gestured at the shadow of a weeping willow tree.

“Much bigger.”

The well frog was momentarily struck, “How much bigger, then?"

“It’s many times the size of your well and it’s quite close. We could travel together to see it.”

“Why would I do that?” He regarded the pond frog suspiciously.

“You would have more water.”

The frog in the well gave a sideways look as if to say, “Oh, a wise guy, eh?” and swelling up with enough irritation to pop, said decisively, “Get out! Get out! I want nothing to do with frogs like you.”

“Why, because I can show you a bigger view, more flies to catch?” The pond frog realized that this frog was afraid to go beyond the bricked walls he had known for so long.

“Nonsense. You are trying to trick me out of my well.”

With that, the pond frog shook his head and hopped back into the sunshine.

In the book, Money Magnet, the author, Jacoline Loewen, explores this theme of not wanting to explore past your every day groove is opened up for discussion. What are you missing by not even learning more about private equity and venture capital?

What is Venture Capital?

Your business is attracting customers but now to fill those orders but your bank is being difficult. It is time to look at the very exciting alternative which will change the way you do business for the better.

Venture Capital (VC), is risk capital invested in privately held companies by VC firms, through the underwriting of newly issued stock and/or convertible bonds.

If you plan to launch a new business venture or expand a young business which has not reached profitability, venture capital is almost always the only source of capital. For banks, it is too high a risk and why should they put their own customers' money at risk on your venture? Banks get given a knock for being cautious but they are being paid to look after their depositors' cash.

Do look for an expert in private equity to match you to the right fund and get your business "investor ready".

Venture capital funding is provided by Venture Capital funds. If you are interested in finding out more, you can read about it in Money Magnet: Attracting Investors to Your Business.

Raising Capital Rule #1: Swim in the right pond

It was a sunny spring day when I had lunch with a Profit Top 100 Fastest Growing business leaders and most of the conversation revolved around his search for capital.

You would think that his many listings as Ernst & Young Entrepreneur of the Year or Profit’s Top 50 Entrepreneurs or Rising Hot Stars to Watch would make it easy. He thought it would be but forgot the first rule of finding capital: Swim in the Right Pond.

What the heck does fishing have to do with raising money? People with cash have what is fondly referred to as their preferred “bite size” which is the amount of money they will invest in a company. This bite size could range from $200,000 right up to $50M and private equity investors cluster according to this investment size. My friend, the cover story of Profit magazine, could not understand why funds were passing on his company but when I asked who he was seeing, it became very clear. He was swimming in the pond for much larger bite size than required for his stage of business. He was wearing out the leather in his shoes walking around Bay Street and visiting what he termed the “best” investors. One of the people he saw was Brent Belzberg of Torquest who is one of Canada’s leading private equity investors. Torquest raised capital for their private equity fund from a range of high calibre sources such as CIBC and these sources will be expecting a high level of return. Torquest is under pressure to achieve their client expectations and have delivered so far due to their focus on size of investment or deal they will do. They are familiar with investing $20M and know how to work with this size. Anything lower would require a different type of involvement with the management team and a different financial structure. Quite rightly, Torquest politely declined and explained the company was not their "bite size".

My CEO friend could not understand how the size of money put into a business could be so different until I asked him if he fished: he glowed as he described catching bass up at Georgian Bay. I asked him if he gone salmon fishing in BC or deep sea fishing for marlin – yes, to the former, no to the latter - but what about catching a whale? It became instantly clear how each of these fish sizes would require different bait, hook, equipment and boat. Above all, the attitude of the investor becomes evident. Is this a weekend jaunt with beer in the cooler or is it for a living where if the fisherman does not bring home the big tuna, it means not being able to make a living? Torquest fishes where there are the big tuna and takes their risks out in the big sea. My Profit Hot Shot CEO needed to fish with the private equity funds who put in their own money, with a far smaller bite size.

But here’s the real hair raiser: the CEO went to a Whale sized private equity shop where one of the financiers advised against private equity but then said, “I’ll invest as I have just made a bonus and have $2M sitting on top of my dresser.” The irony is that $2M investment is private equity! This rich individual was putting in money - which is labeled as Angel investing - but he did not have passion for the business, it was just opportunistic. It is private equity at its worst!
By now though, the CEO was exhausted from swimming in all the wrong places which is the worst time to make a financial decision. He thought the big name of the rich investor would be good for his business and he went ahead and accepted the valuation thumb suck without even checking with a third party agent. This CEO believed the investor knew what he was doing. Absolutely correct – this private equity investor knew he was dealing with a great upcoming company with a vulnerable CEO/owner and jumped to put in his own money. He knew if the company grew, he would get a great payout and if it did not, well, he had the cash to burn. The situation was the equivalent of a Whaler captain deciding to fish with you but with a cooler of beer and no big deal if you don't catch much. Would you want that type of investor in your boat with you?
If this CEO had taken the time to even skim the book Money Magnet: Attract Investors to Your Business he would have known how to swim in the right pond.