Bankers are by design a rather conservative lot. So when entrepreneurs get all starry-eyed about growth opportunities bankers are usually not a significant part of the financing mix for these high-growth businesses. This seems to be the scenario going into 2005 according to Inc.com.
“Small American companies are raising their revenue forecasts for the coming year, and may avoid bank loans and look into non-traditional financing, a new PricewaterhouseCoopers survey reported this week.
“The survey, which focused on ‘trendsetter’ firms — 360 fast-growing private companies with revenues between million and 0 million — during the fourth quarter of 2004, paints an optimistic picture of the economy. Margins were up for 31% of companies surveyed, and down for just 15%, while 24% increased their prices (7% decreased them)….
32% of those surveyed expect to look at non-bank financing, including angel investors (an option for 18% of CEOs surveyed), venture capital (18%), private placement (15%), and IPO (3%).”
The picture this paints is of optimism and aggressive growth, which is where the entrepreneurs surveyed intend to direct these newly raised funds. The greater focus on non-bank funding reinforces this robust outlook.
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