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From XConomy ... 6 Capital Market Changes to Watch in 2010
Colleagues,
From our friends at XConomy.. the 6 changes in the Capital Markets you need to understand to grow you med tech business in 2010 ...
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Kevin Cable wrote:
... The key take-away is that raising equity dollars is—and will remain—difficult.
... The second hard truth is that the venture capital model is broken ... it’s clear that pension funds will not allocate a greater percentage of their diminished dollars to a non-performing asset class. As a result, the VC population will definitely shrink; expect these lowered numbers to be permanent.
... The third reality is that capital efficiency is critical. The emerging facts are stark here: exit values will be lower; relatively few companies will make it public; and investors and strategic buyers will expect strong growth to earn lofty multiples ...
... The fourth certainty is that those VCs left standing will be disciplined. They’ll stay in markets in which they have demonstrated expertise. And they’ll attach premiums to revenue quality, subscription models, high growth, and consistency ...
... The fifth fact that has resonated is that business is emotional; investors and CEOs won’t forget these brutal years anytime soon. And, as the environment continues to improve, companies that struggled through the past two years will look for ways to diminish their risk going forward. That means recaps, strategic partnerships, equity infusions, (non-dilutive government-MedTech-IQ added) grants, and NRE (non-recurring expenses) ....
... The sixth outcome is that the M&A (Mergers & Acquistions) market will rebound. A number of factors point to a robust year in M&A for 2010: companies have been hoarding cash and will use it for inorganic growth; valuations are still quite reasonable; quality companies now have the threat of an IPO, which drives buyers; and private equity and access to debt capital will eventually come back. We all know that the M&A markets are cyclical, and the down cycles are typically 2-3 years, while the up cycles typically are more like 5-6 years. So the time for a turnaround may be approaching.
In the meantime, at least the worst appears to be over; at least we’ve learned something from the recession; and at least some form and semblance of sobriety has returned to the world of equity formation. We should be thankful for that...
--------------------------------------------------------------------------
ENJOY!
CC
From our friends at XConomy.. the 6 changes in the Capital Markets you need to understand to grow you med tech business in 2010 ...
------------------------------------------------------------------------------------------------
Kevin Cable wrote:
... The key take-away is that raising equity dollars is—and will remain—difficult.
... The second hard truth is that the venture capital model is broken ... it’s clear that pension funds will not allocate a greater percentage of their diminished dollars to a non-performing asset class. As a result, the VC population will definitely shrink; expect these lowered numbers to be permanent.
... The third reality is that capital efficiency is critical. The emerging facts are stark here: exit values will be lower; relatively few companies will make it public; and investors and strategic buyers will expect strong growth to earn lofty multiples ...
... The fourth certainty is that those VCs left standing will be disciplined. They’ll stay in markets in which they have demonstrated expertise. And they’ll attach premiums to revenue quality, subscription models, high growth, and consistency ...
... The fifth fact that has resonated is that business is emotional; investors and CEOs won’t forget these brutal years anytime soon. And, as the environment continues to improve, companies that struggled through the past two years will look for ways to diminish their risk going forward. That means recaps, strategic partnerships, equity infusions, (non-dilutive government-MedTech-IQ added) grants, and NRE (non-recurring expenses) ....
... The sixth outcome is that the M&A (Mergers & Acquistions) market will rebound. A number of factors point to a robust year in M&A for 2010: companies have been hoarding cash and will use it for inorganic growth; valuations are still quite reasonable; quality companies now have the threat of an IPO, which drives buyers; and private equity and access to debt capital will eventually come back. We all know that the M&A markets are cyclical, and the down cycles are typically 2-3 years, while the up cycles typically are more like 5-6 years. So the time for a turnaround may be approaching.
In the meantime, at least the worst appears to be over; at least we’ve learned something from the recession; and at least some form and semblance of sobriety has returned to the world of equity formation. We should be thankful for that...
--------------------------------------------------------------------------
ENJOY!
CC
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