Valuations in the venture capital (VC) market are either in decline or flattening out, primarily due to inflated expectations, says Michael David, Managing Director for the Equity Fund Resources team at Bridge Bank.
Financial institutions operate at the heart of our economic system and as such, are hyper-aware of market indicators and trends that can affect the credit quality of their customers.
The more opportunities you have to keep your banker up to speed on what’s going on in your business, the better equipped he or she will be to work on your behalf, says Rob Fernandez, senior vice president and business line manager in the Technology Banking Division at Bridge Bank.
Managing the working capital of a business tends to be a balancing act that requires a deft touch in order for the company to operate smoothly, says Michael Hengl, senior vice president and business line manager for Capital Finance at Bridge Bank.
“Working capital tends to be comprised by inventory, cash and receivables,” Hengl says. “Too much or too little of any of those categories can make it difficult to be a profitable company.”
Debt can be a useful tool in building a business, as long as you don’t spread yourself too thin trying to repay the debt, says Rob Lake, senior vice president and head of Life Sciences at Bridge Bank.
“You get to a point where it becomes challenging to raise equity,” Lake says. “Now you have all this debt and you have potential equity providers who are leery of working with you because they don’t want their money to just be used to pay back debt.”
Two hot topics California businesses will be thinking about as 2016 gets going are a minimum wage increase and a split property tax proposal for businesses that own real estate.
Whether you view these changes as opportunities or challenges depends on your point of view, says JC Timmons, senior vice president, Southern California Corporate Banking, at Bridge Bank.
Small Business Administration (SBA) loans can be a great resource for businesses that are struggling to obtain funding from traditional lenders, but they should not be viewed as a loan of last resort, says Ken Mannina, senior vice president and regional sales manager at Bridge Bank.
One of the keys to securing an appropriate line of credit for your business is being clear about the problem you’re trying to solve, says Kelly Cook, senior vice president, Technology Banking Group at Bridge Bank.
“Are you trying to fill a cash flow gap between when you invoice for your product or service and when you actually get paid by the customer?” Cook says.
Companies that lack purpose in how they manage working capital can easily find themselves responding to one funding problem after another, says Justin Vogel, vice president and business line manager for Capital Finance at Bridge Bank.
“When you don’t have a plan, you manage your working capital on a reactive basis and don’t recognize until the last minute that you’re going to run short on cash,” Vogel says. “You have to find a quick solution to get cash rather than relying on a plan that is more cost-effective and ensures that you’re operating with liquidity at all times.”
Success in the world of biotechnology and life sciences requires a level of patience that is foreign to most types of businesses and industries.
On average it takes 10 to 12 years and over $1 billion in capital to get a new drug from the laboratory to the market to be sold to consumers, says Rob Lake, senior vice president and head of Life Sciences at Bridge Bank.
Venture capital (VC) investment is at a 15-year high and offers no hint of slowing down, says Michael David, managing director for Equity Fund Resources at Bridge Bank.
The second quarter of 2015 saw VC investments totaling $17.5 billion, the most since the first quarter of 2000, which was the previous all-time high. Overall, $50 billion in VC funds were invested in 4,400 companies in 2014 and David expects that figure to be surpassed this year.
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