Finding money. Finding banking partners. Those are among the biggest—if not the biggest—issues facing small businesses. We reached out to John J. Borer III, the Senior Managing Director at financial firm Rodman & Renshaw, LLC to figure out what companies can do to get themselves noticed by bankers who can put together deals and financing.
SAI: When you look at smaller companies, what are the two biggest attributes that make them attractive as either an acquisition target or a potentially good corporate finance client for which to raise money?
Borer: We actively seek out companies that encompass two core attributes: a stellar management team that is able to execute a viable plan to grow the business and a quality product or service niche.
SAI: When executives starting business ask for advice, what's their most common question and what's the best answer?
Borer: It does not come as much of a surprise that the most common question executives ask is: “How do I obtain financing?” Aside from exhibiting solid business fundamentals, access to a broad based network of investors is crucial. At Rodman & Renshaw, we utilize dedicated placement teams housed within investment banking, instead of the traditional equity sales force. For many small companies that have a research and development ramp-up period, Private Investment in Public Entity (PIPE) financing is an attractive option due to the degree of flexibility, less expensive transaction costs, and rapid execution.
SAI: Has there been a development in technology in the past five years you think has changed the game for people wanting to start their own companies or grow smaller companies into bigger entities.
Borer: The wider adaptation of the Internet has played a key role in providing new channels for small businesses to communicate and market their products and services. These days, even the smallest companies can have the same technological infrastructure as Fortune 500 companies. Leveraging off these tools allows new companies to outsource to the virtual community while maintaining focus on core strengths and I.P. In addition, the development of social networking sites provides small businesses with a platform to push their brand, build website visibility, and interact with customers. We have developed a proprietary multi-media platform which provides an innovative means of video recording management’s investor presentation, inclusive of a question and answer segment, and then streaming live video to an investor network.
SAI: What qualities do you look for in a chief executive of a young company trying to raise money or grow?
Borer: The ability to withstand turbulent markets, demanding shareholders and discerning customers is a must. To forecast such obstacles and be able to confront them head on is essential to clearing a path for growth. However, strategic thinking and the ability to articulate such a vision to the investor community is vital when it comes to capital-raising.
