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Are You Money-Hungry?
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Business New Haven
3/18/2002
By:
Lisa Micali
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Even in an environment of downsizing and closed doors, many entrepreneurs are seeking money (as well as perhaps, a buyer) in a recessionary economy. Cash-strapped for any number of reasons (survival, growth, seeking a bridge to a planned event such as an IPO or sale), companies need to understand the reasons behind their needs, dust off their business plans and get back down to business.
That was the message at the Connecticut Venture Group's Nuts & Bolts of Equity Deals held at the New Haven Lawn Club on February 26.
Top Connecticut venture capitalists, attorneys and accountants gathered with entrepreneurs to discuss follow-on rounds in today's uncertain market. Said host Geoffrey Gregory, a senior vice president with Webster Bank, “This is an exciting time to come into the market to raise funds. Optimism abounds.”
Panelist Donna Brooks, a partner and member of Shipman & Goodwin's business law department, stressed the need for “businesses to focus hard on the reasons behind their need and eliminate all uncertainty and risk for investors.”
“The business plan isn't dead,” she said. “Polish and update it. Look inside the company. Dynamics change. Self-reflect. Explore various constituencies from every side. Position yourself in the best possible light. Fix partner and supplier problems before they come back to haunt you. All this factors into whether or not you'll get the money.”
“Valuations loom large,” she continued. ”Risk and return issues are often acute. Get everything in writing. Avoid back-of-the-envelope deals and create standard deal documents.”
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