Wednesday, December 7, 2011

Big Business the Angels for the Small Guys

As capital and investments start shrinking for small businesses in these economic hardships, a glimmer of hope has appeared for small businesses looking to grow. Angel investors are not as commonplace as we would like them to be, but if you and your company have what it takes you can be seeing major growth and experience in the future. With uncertain and tentative bank financing, big companies have become an alternative to small and mid-sized companies looking for venture funding. Angel groups usually invest in only 1%-10% of those who applied.

Small companies on the prowl for extra cash may benefit from the deep pockets large companies possess. According to a recent study, more than 800 companies cash balance have quadrupled since 2001. Those deep pockets can help growth companies find weary investors with renewed liquidity.

“If the large corporates make more acquisitions and create more exits, they may get people more excited about investing again” -Jeffry Sohl Center for Venture Research

Large companies looking to speed up their growth are looking to sink their money into companies that can help them do so. With the new partnership established, investors and small and medium CFO’s can become closely involved with the business. The experience gained from these partnerships will not only benefit the CFO in regards to management but would also progress the company in new ventures.

 “In the past, they kind of stood back and did not take board seats or an active role. Now they want to be integral part of helping that company grow to the next level.” – Mark Hessen, President of National Venture Capital Association

So what’s the moral of the story? With some creativity and persistence high growth companies can find ways to acquire much needed capital from investors both large and small. To do this successfully, CFO’s should research what investment groups are looking for and sweep them off their feet once your meeting is penned in. Good Luck!

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