We receive a lot of inquiries, but today one came through that I immediately replied to. First of all, I love it when women reach out to Lantern, and it warms my heart that it came from a high school student.Here is her note:
Hi my name is Vanessa XXX from XXX in XXX, and I'm in my senior year. One of the courses I chose to take was corporate financial advising, and I wanted to ask questions such as why was the career of advising chosen, how did it become a choice because it is not as known as business management or anything similar to that. Another thing to ask is if its worth hiring an advisor? If I could please get a response I would greatly be appreciate it giving me more information towards my research paper.
Thesis: The financial advising field has been growing from 20 years ago and forward, having advantages and a great demand whether it’s for individuals or big/small businesses. Hiring a corporate financial advisor can result in long term benefits when it comes to saving and increasing increments of money with investments and thought out plans, including merging or taking them out of debt.
Dear Vanessa,Thank you for reaching out to us, I hope my reply will help you.
Why was the career of advising chosen?
Lantern’s management team started is accountants working for Arthur Andersen in the audit and advisory services business division. Through career growth objectives, the founder took a job with a firm that helped growing companies raise capital as a consultant. After ten years with that firm, he decided to start his own consulting business and provide the same service, but relocated to Atlanta.
We see our service as a compliment to a corporate finance management team, but raising capital is a specialty that a lot of people don’t have experience doing. They hire us for specific projects and we come in, raise capital, and move on. Raising capital can be done to buy companies, allow extra cash to grow or open locations, or purchase equipment needed to provide services to customers. Our corporate finance services include business strategy/planning, acquisition finance, management buyouts and growth capital.
How did it become a choice because it is not as known as business management or anything similar to that.
Exactly! We don’t manage the business of our clients. We work with the management team to develop their corporate business plan, document how/why the money is needed, and then identify investors that will loan them money to achieve their objectives. We have thousands of contacts/funds that have their own investment criteria and so we match our clients needs to funds interested in companies like them. Think of it as Match.com or looking for a mortgage that provides the best rate, but for businesses.
Our practice doesn’t charge a percentage of the capital raised, we simply charge hours and rates for our time, similar to an attorney or accounting firm. CFOs and CEOs of companies are our customer. We serve as their “corporate finance expert” and help them plan for growth and identify when and how much capital is needed at a particular point in time.
One of our specialties as a practice is executing management buyouts, where the management team purchases the company from the owner, typically retiring, but sometimes it is a spin off of a larger company.
Another thing to ask is if its worth hiring an advisor?
I would say yes. Because we are experts at what we do, we can very quickly execute a transaction faster than a company could do it on their own, as well as faster than someone could hire someone to perform the deal internally.
Hope that helps!
Sincerely, Jennifer Mooney
We see our service as a compliment to a corporate finance management team, but raising capital is a specialty that a lot of people don’t have experience doing. They hire us for specific projects and we come in, raise capital, and move on.
Available for growing companies with at least $4 million in revenue, revenue based financing is repaid as a percentage of future revenue, over a much LONGER term, typically 4-5 years, rather than short term merchant cash advance loans.
I was talking with a banker the other day and he used a term that I hadn’t heard before but made a lot of sense. He said, they make ‘dequity’ investments. What he meant was they make loans but the risk they take and the way they look at underwriting loans is similar to an equity investor and the cost of that capital is much higher than a bank (often between 15%-30%) but it allows companies to get additional capital without giving away the most precious thing owners want to preserve: their equity.
Acquisition Strategies – Think Small to Go Big On several occasions, I have met or worked with entrepreneurs that built valuable businesses by effectively executing several small acquisitions. These companies have been in industries such as staffing, insurance and financial services as well as electronic and light manufacturing. Several of these companies reached enterprise values […]
Corporate Financial Planning: The Value of a Business Process Change The Value of a Business Process Change: When thinking about strategies that significantly increase enterprise value, our minds tend to immediately think of strategies that grow revenues like adding a new product, investing more in sales resources or acquiring another business. One strategy that often gets […]
Internal Management Buyout: Another Exit Planning Option: Sell to Management The one exit planning strategy that most often gets overlooked is an internal management buyout but it’s an approach that has several advantages that owners should seriously consider. This post is a very short explanation of 1) how an internal management buyout works, 2) who […]
MBO Management Buyout: PE vs No-PE I have a client pursuing a MBO management buyout of his company from its public parent. As we assessed different management buyout financing options, he had a big decision to make. Did he want to partner with a private equity firm (PE) or do the financing on an all […]
Growing By Acquisiton: A Key Factor That Drives Successful Acquisitions. When targeting an acquisition it’s pretty easy to get lost in the numbers. After all, financial analysis is critical for acquisition financing, valuing the acquisition and seeing how the Company can add financial or enterprise value to the current business. When considering growing by […]
Corporate Financial Planning: What Drives up Multiples? Last newsletter, I provided a short (as I could) explanation of how to calculate enterprise value (EV) and why EV is an important topic for internal planning, valuing private company acquisitions, management buyouts and partner buyouts. A common follow-up question I get related to EV is What factors can drive up the […]