Before that next big business can take the world by storm, it faces a huge hurdle — the capital raise.
Three Eccles School alumni — along with moderator Jeffrey Gelder Lewis — discussed the current climate and challenges facing companies that are trying to expand and grow. Panelists included Matt Marsh of Sorensen Capital, Sam Orme of Bank of America Merrill Lynch, and John S. Pennington Jr. of Bridge Investment Group. These panelists know their stuff, with vast experience in growth equity and mergers and acquisitions. Here are a few of their takeaways:
The best term to describe the current market is “frothy”
With $12 trillion pumped into the economy over the last few years, that capital is still being processed, leading to choppy waters with lots of foam — in the form of venture capital and other financing — rising to the top.
Growth is the greatest commodity in the world right now
Investors are constantly chasing growth, so much so that it has become its own commodity. Panelists cited companies like WeWork, who have seen huge infusions of capital and grown very quickly, as examples. Things aren’t working out so well for the office co-sharing startup, but panelists believe growth will continue to be a risk investors are willing to bet on.
We may already be in a recession, we just don’t know it
Panelists shared their counter thesis on the recession that is supposedly looming, pointing out that we may already be in an economic window that will look like a recession in the future. “There is just so much capital out there that we don’t feel it,” said Orme. “We are papering over it.”
Find more takeaways and hear directly from the panelists by watching the recorded panel.