Alternative Capital Market Insights | WealthForge

5 Takeaways on Middle Market Liquidity Events and Capital Formation

Written by Todd Schweber | October 20, 2014

 

As a top 10 accounting, tax and advisory firm, the CohnReznick team aligns well with the WealthForge mission to support partners from various sectors through private capital formation transactions.

Understanding the important role that the roughly 200,000 middle market companies (companies with annual revenue from 10M - 1B) play in the US economy’s growth, CohnReznick’s National Liquidity and Capital Formation Group released their ‘liquidity and capital formation survey,’ Middle Market Pulse.

The following 5 are takeaways from the survey:

1. 20% of middle market companies will engage in a liquidity event or capital raise over the upcoming months

2. Middle market executives are almost 3 times as likely to raise capital through private equity investment than they were to consider an IPO

3. 61% of middle market companies report that they would need assistance managing a liquidity event or capital raise

4. 35% of middle market executives report being familiar with the JOBS Act

5. 42% are concerned with the ability to manage the overall cap formation process

There is a ton of optimistic data sprinkled throughout this survey and I commend the CohnReznick National Liquidity and Capital Formation Group for shedding light on some important gaps within the middle market.

Adam Kleeman of CohnReznick advises, “Smart business leaders will operate their businesses as if a liquidity event or capital raise is imminent.”

Standardizing processes to help add transparency, reduce risk and automate private capital formation in a compliant manner while amplifying businesses’ exposure, within the provisions of the JOBS, is more important now than ever before.

Feel free to leave a comment on what your thoughts are on this survey and the state of middle market companies and private capital formation and check out some upcoming web events hosted by the CohnReznick team here.

Disclaimer: WealthForge provides this information to our clients and other friends for educational purposes only. It should not be construed or relied upon as legal advice.