Written by Christiana Moffa on Wednesday, November 26, 2008
Recently, we at Growthink have received a flood of inquiries from entrepreneurs and business owners, asking for advice on how to proceed in these turbulent times.
The fact of the matter is that it is hard to reassure anyone, in light of recent economic circumstances, that there is an upside for business owners who are revising short/intermediate goals or looking for capital. Small, medium, and large companies alike are hesitant to put themselves out there in an unstable, cash-constrained environment.
Yet amidst the seeming cynicism, we at Growthink are still seeing extremely positive movement amongst funds – especially around our headquarters here in California – that have not only the moneys to invest, but also the eagerness for new, niche deals.
Historical patterns indicate that downturns, such as the one in which we presently find ourselves, result in some of the highest levels of new company formation.
What this proves is that entrepreneurs – no matter the ebb or flow of Wall Street and Main Street – are consistently creative people, who seize upon circumstances and leverage them to start and/or grow their businesses. They reflect the American Dream so often referred to in the latest Presidential campaign.
Growthink's mission and vision, as founded by such entrepreneurs, is to help aspiring peers build and set forth strategic plans to gain momentum in their marketplace; and to hopefully attract investment dollars from the right people at the right time.
With all of that said, it comes down to a few key characteristics of good deal-making: confidence, relationships, and perseverance. Just because the opportunities are out there, doesn't mean they are easy to find, qualify, negotiate, or transact.
Our expertise, in working with investors on a daily basis, renders us the ability to quickly identify an outreach strategy, to get to a "yes" or a "no"; and to conduct diligence with interested parties, speeding the time to a closed deal. What this enables our clients to do, rather than expending 100% of their efforts on raising capital, is to focus on the day-to-day operations of their businesses. Ultimately, this is where potential investors want to see busy executives utilizing their skills and capabilities.
At Growthink, we welcome the opportunity to speak with you about our investment banking and consulting services. Should you be interested in scheduling a call, please contact us with the best day, time, and way to reach you, and we will happily accommodate.
Written by Growthink on Wednesday, November 19, 2008
As a supplement to our consulting practice, we're pleased to announce the launch of Growthink University, our new membership club dedicated to teaching entrepreneurs and business owners how to raise capital for their businesses.
The club assembles 10 years of capital raising expertise and methodologies developed and refined by Growthink, and gives entrepreneurs an additional "Do-It-Yourself" option to perfect their business plans.
Growthink University covers topics including, but not limited to:
Written by Jay Turo on Wednesday, November 12, 2008
How many times have you heard someone say, "Don't put all your eggs in one basket"?
Written by Jay Turo on Wednesday, November 5, 2008
As the investing month of October mercifully draws to a close, there is now a palpable sense of calm in the financial markets. While the horrific damage – in both value and psychological terms – is very, very real, and may take years from which to recover, there has been a healthy mindset transition to a “what is to be done” thinking, feeling and acting.
Written by Andrew Bordeaux on Wednesday, October 29, 2008
In times of economic crisis, far too many business owners revert to “safe mode” as panic spreads. A "responsible" course of action typically includes one (or more) of the following:
Doing anything different may be seen as “risky”.
But this conventional wisdom couldn't be more wrong.
An old adage states, "Only dead fish swim with the current," and that philosophy applies to your growing business as well.
Here we highlight the three biggest business mistakes made in tough economic times, and the implications of each:
Mistake #1: Shrinking your marketing budget
When there is less money to go around, budgets get cut. But it's a bad idea to take too many of those dollars away from marketing initiatives. Actually, if you have the resources, now is the appropriate time to continue (or expand) your marketing. Why? Most of your competitors will cut their budgets, out of a “knee-jerk” reaction to the economic downturn -- leaving you a greater window of opportunity to get your message across to your market. Business owners who “stick it out” during tough times will likely enjoy increased market share once the economy rebounds.
Mistake #2: Laying off key employees
Another, often more challenging decision, is whether to cut staff. Whatever you do, don’t lay off your top talent. Great people are your most valuable resource -- hold onto them. In fact, if you’re in a position to hire, now is a great time to hire, because so many other businesses will be shedding their top talent.
Mistake #3: Putting growth plans on the backburner
Possibly the most damaging long-term effect of a troubled economic climate is when a business chooses to put its growth strategy on hold to "weather the storm." If you cut back on new product development and innovation today, you will have fewer product offerings when the market bounces back.
Warren Buffet’s recent advice to investors is also great advice for entrepreneurs:
“Be fearful when others are greedy, and be greedy when others are fearful.”
At Growthink, we advise our clients to pursue their growth initiatives despite the downturn. There is no better time to grow than today.
Written by Growthink on Wednesday, October 22, 2008
If you’ve glanced at newspaper headlines, turned on a television, or read any of our blog posts within the last several weeks, you know that this is a turbulent time for the global market. This brave new world has lead to widespread and palpable effects on small and middle market companies everywhere. The credit crunch, the volatility of the stock market, and the uncertainty of the new political landscape have left many entrepreneurs and small business owners experiencing emotions ranging from mild trepidation, to full-fledged panic.
As scary as the landscape can appear right now, we believe firmly that businesses that look for the opportunities provided by the current climate can position themselves to experience success. In order to help companies achieve that success, Growthink has launched a new service: Turnaround Strategy Consulting
Simply put, there are numerous steps businesses can take right now to turn the corner. Our decade of experience working with a broad spectrum of firms, from start-ups to Fortune 500 companies, has allowed us to develop comprehensive, analytical methodologies that indentify the cause of financial failures as well as realistic solutions that can be quickly implemented to turn businesses around.
Since 1999, Growthink has provided strategic guidance to companies through rapidly changing markets and economic climates, including the wake of huge economic crises, such as the end of the dot-com bubble and the post 9/11 financial landscape. Even in light of the 2008 “Credit Crunch,” Growthink is able to find opportunities within the chaos and create solid strategies for our clients.
Even businesses that have not experienced dramatic shifts, but have felt a recent downward trend can benefit from Growthink’s consulting. Improving margins, identifying the right customers, and implementing effective management are all areas that can make a significant difference for any firm in this economic environment.
Additionally, as a full-service firm, our turnaround strategy solutions can examine and assist with all aspects of business growth, from branding, public relations, business planning, web development, internet marketing, and investment banking.
If Turnaround Strategy Consulting can be of use to your business, please visit our service description page here or contact us by phone at 1-800-967-6419.
Written by Growthink on Wednesday, October 15, 2008
Here's a download of a fantastic conversation Growthink co-founder Dave Lavinsky recently had with Ron Feldman, Co-Founder and CEO of Kwiry.com. Funded by Hummer Winblad Venture Partners, kwiry is a service that turns text messages into reminders you retrieve online.
The interview focuses on how Ron raised capital for Kwiry. Dave got him to reveal key points on how he used Advisors to his advantage and how a networking event that his girlfriend convinced him to attend ultimately resulted in his initial round of venture capital.
Written by Jay Turo on Wednesday, October 8, 2008
The extreme malaise in the financial markets is unlike any of us have seen in our lifetime. It is discouraging and disconcerting on many levels.
Written by Jay Turo on Thursday, October 2, 2008
We are living through one of the most tumultuous periods in the history of the financial markets. It is rattling even the most steadfast and optimistic of investors. For better or for worse, we can only look with misty memory to the halcyon, golden, go-go market and investment days of the 1980's and 1990's. We are truly in a brave new world - one where the old assumptions and dogmas are truly on the dustbin of history.
Written by Growthink on Wednesday, October 1, 2008
"Helping Main Street by Helping Wall Street" is a false claim for which there is no need or rationale.
Acting hastily and out of fear on a bailout plan of highly uncertain efficacy, of a size that will constrain options for other remedies, is irresponsible. Congress is engaging in the same reckless lack of analysis that brought us a prolonged Iraq War, and in the same financial industry wishful thinking that brought us the mortgage crisis.
1. The bailout is irrelevant and unnecessary.
a. U.S. consumers, businesses and governments simply have too much debt. The economy is in the process of reducing leverage through write-downs, bankruptcies, constrained spending and contraction of credit availability. The government is not big enough to stop this inevitable and healthy shift.
b. The private markets are fully capable of recapitalizing deserving institutions. Witness the approximately $30BN raised by JP Morgan, Goldman Sachs and Morgan Stanley in a few recent days. Private capital is perfectly capable of purchasing "toxic" assets by using the same reverse auctions that the Treasury wants to use to deploy public funds.
2. The bailout is far too big given the complete lack of evidence for its efficacy.
a. It is highly illogical to commit to a massive plan whose benefit to Main Street is utterly unclear and historically unstudied. The Treasury and the Fed, like everyone else and through no fault of their own, have been thoroughly ineffective at predicting the outcomes of interventions.
b. What assurance do we have that removing toxic assets from bank balance sheets will result in increased lending by our new, highly concentrated, banking sector? The other Federal Reserve action to promote lending, injecting enormous amounts of liquidity into the banking system, hasn't improved Main Street lending conditions. Nebulous claims about "improving confidence" are no justification for risking hundreds of billions of public money.
c. Let's keep the government's financial powder dry for uses where the effect of the spending is more clear and predictable, including directly helping individuals impacted by any economic fallout.
3. The bailout is un-American
a. There are numerous healthy, successful banks, many at the local level and some national (e.g. San Francisco's Wells Fargo). If you insist on spending government money, why not invest in these institutions in return for their commitment to increase lending? At least, let's help by rewarding success and prudence, rather than recklessness.
b. Our financial institutions are a product of recent human endeavor. They are replaceable. American entrepreneurship, with its hundreds of years of successful track record, is fully capable of quickly replacing institutions that have shown once-in-a-century incompetence and avarice. Why reward failure when so much entrepreneurial energy and capital is available to sweep these institutions aside?
4. The bailout is immoral
a. "We made massive amounts of money making what turned out to be terrible, destabilizing decisions, and now Main Street better save us for its own sake." This is industry's argument for holding up the taxpayers. The only moral path is to show these people the door.
b. Without any direct evidence or certainty of benefit to Main Street, it is immoral and mind-bogglingly circular logic to help the institutions and professionals at fault by taking money from generally faultless taxpayers who are likely soon need help as a result of the perpetrators' actions. In other words, Congress is taking a pot-shot at a plan to help Main Street avoid financial pain in the near future by sticking it with a bigger financial bill today, with the only certainty the benefit to the perpetrators.
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