Print PageCapital Raising – Debt & Equity
Business owners and managers often face frustrating and challenging issues related to meeting the capital requirements of a company. Typically, ownership and management understand the operating initiatives that need to be accomplished to move forward, but are impeded by financial constraints or other non-operating difficulties. Matrix has the relationships with middle-market lenders and investors to solve capital issues of private business, clearing the path for management to focus on the daily operation of the company.
The most basic questions surrounding this dilemma include: Why the need for capital? How do we acquire it? Who has the capital? What is the right structure for our needs? When does the process begin and end?
Why the need for capital? Many businesses are struggling to accommodate both the financial requirements of their bank and the capital requirements of the company. Often there are shareholder issues or conflicts impeding growth that could be solved by the repurchase of shares by the company in a redemption. There may be an acquisition on the horizon that will require outside capital or in some cases, shareholders may want to diversify their wealth by taking a multi-million dollar dividend out of the business. All of these scenarios listed require capital.
How do we acquire it? Our teams consists of experienced personnel who closely analyze historical numbers and the performance of a company’s current position (income statement, balance sheet and cash flow), as well as a projected three to five year outlook based on management’s insights. We dig in deeply with company personnel to evaluate the entire financial picture. Once an agreement is reached on the presentation, Matrix runs a confidential, formalized process to identify, contact, and discuss the company’s strategy and needs with all potential capital sources.
Who has the capital? There are more than 2,000 capital providers in today’s middle-market. Matrix has a twenty year history and culture that dictates how we stay in communication with those capital providers. We are in contact with hundreds of banks, non-bank lenders, second lien and tranche B lenders, subordinated debt/mezzanine lenders, private equity and the hedge fund communities on a daily and weekly basis. We have solid relationships with these groups and know them both professionally, as well as personally. Through a competitive process, we are able to filter this vast universe of money supply and find the right fit for our clients.
What is the right structure for our needs? Two important factors go into fulfilling the need for capital - what is required by the company and what the market will provide. Matrix has an extensive track record of providing clients with the capital they need by leveraging years of personal relationships with lenders and investors. Our knowledge of corporate finance allows us to tailor a capital structure that is effective and achievable given market conditions.
When does the process begin and end? Generally speaking, an average transaction requires thirty days of due diligence to produce a comprehensive offering memorandum, thirty days to converse with the market, thirty days to allow lenders and investors to finalize commitments and due diligence, and sixty days for attorneys to complete their documentation. We are with our clients every step of the way, providing expert advice and guidance to ensure the process runs smoothly and on schedule. Experience has taught us that no two transactions are alike. We understand that in certain situations an accelerated timeframe may be required and can design a transaction process based specifically on your needs.
At Matrix, we pride ourselves on providing an intensive, detailed approach to each and every transaction we handle. The results are proven - minimal company involvement and maximized value.
