The longest bull market of the ’90s, the internet bubble, low interest rates, low unemployment, and the NASDAQ climbing at an unbelievable rate, all created a pull of capital of unprecedented size. At one time there was more money in mutual funds than there was in the entire banking system, with over 30% of American households having some money in the market, with easily accessible venture capital and with a booming IPO market, companies and entrepreneurs had an easy path to the market, with seemingly infinite growth and almost risk-free investment in raising capital.
In the 90s, Basic corporate fundamentals, properly structured companies, revenues, cash flow, assets and even stock holders’ earnings became a drag or unnecessary delay to a very accommodating market entry, quick and easy profit and overnight liquidity and wealth.
In the past, “The fashion trend”, of just having an idea which could one day generate revenues was sufficient enough to attract money and professional bankers willing to rush you to a public market, desperate for new listings or any kind.
The internet bubble of the ’90s, followed by the “green” technology trend and the housing market of the 2000s, and the most recent trend in social media companies, showed a speculative and temporary boom, while plunging the economies of the world into chaos. The incredible rise and fall of the market was a brutal lesson in elementary finance for laymen and professionals all over the world.
- New and strict investment criteria
- The disappearance of angels and equity investors
- The slowdown in the IPO market
This has become a reality for companies seeking capital;
- This abrasive investment market forced companies and investors to go back to basic corporate fundamentals, proper market valuations, strict rules of management planning, and very closely controlled spending.
- Tangible and intangible assets, market potential, proper management and EBITDA became the new reality for companies seeking capital.
While companies with good technologies, services and fundamentals were ignored by the market trends and the quick exits, the difficulty of raising capital forced many of them out of business, while the few that survived and the new that are rising had to adapt to the new demand in capital standards.
There are literally thousands of companies seeking capital, investors exhausted by market collapses and losses found them flooded with demand for capital and new ideas, while seeking guidance and desperately trying to find the new trend or direction.
In today’s world there are trillions of dollars parked on the side, companies seeking capital need to effectively bring guidance and create an image for the professional investment market, while properly and accurately creating an ease in presentation, a quick and impressive snapshot without cluttering desks.
In today’s world;
- A proper corporate image and business accomplishments into a short one-page introduction or a 10-page executive summary, that which a professional investor would take the time to peruse, became a necessary and difficult task for companies seeking capital.
- Combining the day-to-day business demand while also trying to properly create an image for their company, or find that ‘Buzz” word that will position the company into that less than 1% coveted chance of attracting the attention of a potential investor, should be the task of a specialized firm, and not that of desperate capital seekers.
- The dangers of not properly transferring your message into a short concise message, while flooding or shopping the market with unnecessary documents, will only reduce your chances of survival, while adding the burden of time and effort associated with seeking capital.
Robert J. Ramsey Chief Executive Officer
Eco Convergence Group, Inc.
Direct Line: 850 259-2434
Web Site: www.IveronMaterials.com
Web Site: www.ECGIncubator.com