- 40 years of experience founding, running, investing in, lending to, and advising small and middle-market companies
- In-depth marketing and management experience, having founded, run, and served in senior executive positions for two companies
- 10 years in senior positions in private funds, providing equity and subordinated debt to privately held, middle-market companies
- 9 years as an investment banker, providing advisory services to privately held-middle market companies
- All 8 Best Practices
- Pre-Call Discovery Process
- One-on-One Call with Expert
- Session Summary Report
- Post-Session Engagement
Financing and Liquidity - Options for Middle Market Companies
Add-backs result from running a private company. Many if not most privately-held, small- and middle-market companies are run for the benefit of the inside shareholders/operators. Some of their expenses might not be legitimate if the company were run for the benefit of outside shareholders.
Principal of a loan is repaid over a specified period of time.
Earnings before interest, taxes, depreciation and amortization. Free cash flow.
Foreign Corrupt Practices Act which prohibits bribing of foreign officials and requires companies listed in the US to both maintain accurate books and records and implement a system of internal controls to prevent corruption.
Financial Institutions Regulatory Authority. FINRA is the largest independent regulator for all securities firms doing business in the United States. Its chief role is to protect investors by maintaining the fairness of the U.S. capital markets.
- Investment banker
As it pertains to middle-market companies, a firm registered with FINRA/SEC as a broker-dealer, providing capital raising, merger and acquisition, and sale advisory services
Immigration Reform and Control Act stipulates that employers may hire only persons who may legally work in the U.S., that is, citizens and nationals of the U.S. and aliens authorized to work in the U.S. The employer must verify the identity and employment eligibility of anyone to be hired, which includes completing the Employment Eligibility Verification Form (I-9). (See Best Practice #6).
- Middle-market company
A company with annual revenue between $20 million and $250 million
- Private Equity
Limited partnerships formed to invest in operating companies. The general partners of such funds are professional investors; the limited partners are pension funds, endowment funds, insurance companies, family offices and other investors.
Limited partners receive their original investment back plus a specified return percentage.
The general partners generally charge a management fee of 1.5-2 percent of funds invested and they earn a carried interest that is usually 10-20 percent of the ultimate proceeds from the sale of assets or other realization of the investments after the limited partners receive their share.
- Senior debt
Loans generally made by commercial banks, asset-based lenders and commercial finance companies. These loans are short-term and are collateralized by business assets (inventory, accounts receivable, equipment, etc.) and personal guarantees of owners of the company.
- Strategic Investor
An operating company that is seeking to grow by acquiring companies that have similar products or services. The combined firm can experience greater operating efficiencies, leading to increased net income.
- Subordinated debt
Loan of 5 to 7 years, interest only, with principal due at end of the term of the loan, subordinate to senior bank short-term loans or lines of credit. Lenders of subordinated debt rely on historic and sustainable cash flow of the company for repayment.