Business

In these recent weeks following the "economic collapse" the attorneys at Alerding Castor have noticed several trends in our local business market.  These trends can lead to opportunities.

1.  There has been a proliferation of merger and acquisition transactions in private businesses.  That is an interesting thing about challenging economic times - it creates sellers, which in turn gives rise to good deals for buyers. 

2.  U.S. based private equity investors have largely closed their wallets.  The knee jerk reaction for investors during a swift downward shift in the economy is to value liquidity over long term ROI.  This is a nearsighted view.  We have noticed that international investors have not had the same reaction and are actually looking for equity investments in the U.S.  From an investors standpoint, the economic situation gives rise to better deals - i.e., more equity percentage for less investment dollars. 

3.  Equity raises are particularly more difficult for new businesses in pre-revenue stages.  Much of my practice is focused on Indiana technology and software licensing companies.  These businesses need to focus on creating beta products and beta markets.  Develop the early success stories.  Prove that the business can generate revenue.  Also, look for creative equity sources such as supplier or customer chains.

4.  While the purse strings of mid-size and larger banks are tight, local banks are looking for loans.  Within two weeks following the collapse, I had three officers from local private banks call me to reassure that they are "open for business" and looking for loans.

5.  Value-added products and services are in high demand.  Don't sell "price" as your product differentiator (that is boring) - sell "value".  Maintain a remarkability factor in your products and services.