Dear T&L Executive,
It’s challenging. When a small company needs capital, where does it turn?
Often, such businesses reach a point where they’ve maxed out their bank lines, personal guarantees, and loans from friends and family.
What are the options, then? The only alternative capital source—private equity—turns away even the most promising T&L companies doing $10-50 million in sales or $500,000 to $5 million in EBITDA. Such firms are either too small or don’t require enough funding to compensate for investors’ work and time.
So owners are trapped in a corner—their sources exhausted, with nowhere to go for much-needed funding.
How about you? Are you in a situation where you could use an infusion of cash? Of course, you could seek a buyer. But maybe you’re not ready to exit.
Now, there’s a better way: by selling a minority stake in your company to a larger, resource-rich T&L company.
But another obstacle exists: There has never been a systematic way for these strategic investors to find and screen companies like yours, perform due diligence, obtain financials, and fully assess your business as an investment opportunity. Until now.
Why the major industry players need you—as much as you need them.
First, why would the big T&L companies be interested in you?
Well, many are actively searching for “rising stars” in their own industry: smaller, nimbler, disruptive firms that know how to operate faster, more efficiently, more innovatively, more economically.
Understandably, however, some small-company owners are reluctant to sell out or surrender control. They have good reasons for their decision.
Fortunately, there’s a great alternative: Strategic investors are often receptive to taking a minority stake. You can be their catalyst for growth—by becoming an incubator of innovation and ideas to help their businesses grow.
Ron Lentz, a former T&L insider and now a leading investment banker specializing in the industry, explains it this way:
“Major T&L companies confront a dilemma: Unlike in the ’80s and ’90s, overall industry growth is mostly flat. Yet they’re being pressured to grow by their private equity investors—or if public, by their shareholders. The old cliché is a fact: Grow or die!”
Ron is right. The larger industry players have real incentives to grow. By taking a stake in a smaller company, they achieve this goal. In the process, they learn to operate more swiftly and intelligently.
It’s a fact: Growth eats cash flow.
But growth is a challenge to companies of all sizes. Here’s another important factor to consider….
Many smaller, closely held T&L companies also have a growth problem: too much of it and too fast.
Why is that a problem? Because growth eats cash flow. It puts fast-growing firms like yours at enormous risk because you have limited access to needed capital. Investments in new plant, equipment, technology, people, and acquisitions require large outlays of cash—yet revenues lag behind.
Consider this observation from Doug Tatum, nationally acclaimed advisor to middle-market growth firms and author of No Man’s Land: Where Growing Companies Fail, a best-selling management book.
“Even when a business is profitable, growth requires infusions of capital, consuming cash flow. The faster you grow, the more money you need. You could be making money—yet still have more cash going out than coming in. Most entrepreneurs fail to realize this.”
So a company can be poised for rapid growth, on the verge of reaching that next important level, yet can’t obtain the capital it needs to scale. Sound familiar?
Get the cash you need—and reap many other benefits.
A strategic investment solves your capital shortage problem. And it brings you other valuable benefits. All without the risks of selling out.
Here’s how you can benefit….
- Expand your business. For example, with an infusion of capital, you could purchase new trucks and trailers, build or lease new warehouses or other facilities, open a new territory or distribution channel, hire new staff, or invest in cutting-edge logistics or sales technology.
- Acquire a smaller firm to boost your own growth.
- Gain financial leverage. Renegotiate better loan terms with your current lender as interest rates rise.
- Fund a generational transfer. If and when you retire, you’ll be in a position to pass your business on to a child or other relative, or a partner.
- Meanwhile, you forge trust with your investor and are better able to determine if the company’s business model and company culture is a good fit with yours. Then, later on, you have the option of selling your remaining equity.
But that’s not the whole story.
Best of all is the “added value” strategic investors routinely provide. They advise, mentor, and help the business in numerous ways: Strengthening the business model, valuation, product development, customer base, market opportunities. Often, companies can tap their investors’ networks for sales leads, better suppliers, access to new customer channels. Or use their banking relationships to secure more favorable loan terms and a bigger line of credit.
Instead of dealing with outsiders and strangers making judgments about your business with no real understanding of it, these are people in your own industry who know T&L, who are knowledgeable and sympathetic to your needs and concerns.
This special class of “insider” investor can make an informed decision to invest based on the merits of what you’ve accomplished, how your business is run, and with confidence in your future plans. Moreover, the trust you build in your investor mitigates concerns about potential competitive threats.
Investment banker Ron Lentz, whom I quoted above, says:
“Every month, I get calls from rising-star T&L firms that are “locked out” of financing opportunities.
“Consider this company I worked with: a great 3PL brand in the southeast servicing a major port, with an excellent management team, unique business model, that could expand to another port through acquisition of a $2M EBITDA 3PL, leveraging $5M of new equity to secure an additional $5M in debt for a 5x EBITDA deal of $10M.
“Or this one: a holding company in the dedicated contract-carriage sector with smart leadership and great vision that could acquire a $6M EBITDA player by raising $18M in unitranche financing on top of $6M in new equity to purchase for $24M. It could invest combined profits back in business for additional acquisitions.”
Your company might be a lot like these. Too small for private equity, but a perfect candidate for a strategic T&L corporate investment. But how do you do it?
Your one-stop solution.
We can help make it happen.
Who are we? We’re Main Street Equity, a new online, open-capital marketplace specifically designed to find you financing, even when other routes are blocked.
Main Street Equity was created expressly to vet and bring to market the most promising T&L companies. To match strategic investors and capital-raising firms and facilitate the sale of debt and equity securities.
Register for our FREE Capital Needs Assessment. Sign up now at our Priority Reservation Form on this page.
This is a first. Never before has there been an organized marketplace to efficiently handle minority investments in smaller T&L companies.
For companies in search of financing, Main Street Equity eases the offering process. We assist you and your advisors with the prep work. We help organize and structure the deal.
We attract the best prospective strategic investors for your company, connect you in confidence with decision-makers, and expedite everything to reduce time and expenses. We ensure that the components are complete and present an accurate picture of your company as an investment opportunity, in the best possible light.
We assemble the required components for the offering and curate a comprehensive intelligence package for qualified investors to evaluate in a dedicated deal room on our website. They’ll find all the information they’ll need to speedily assess the opportunity and conduct due diligence: pitch deck, financials, term sheet, cap table, purchase agreement.
Be assured that access to your confidential company information is tightly secured and made available only to qualified investors with your express permission. The deal room is by invitation only. You must approve those who gain access, and you can further limit who sees what.
There’s more. You’ll be able to meet and pitch investors in an online road show. We also host periodic webinars and Q&As. When other parties are serious about a deal, we’ll schedule a one-on-one meeting between you and the prospective investor.
As a result of recent changes in federal law governing online investment marketplaces, Main Street Equity is able to promote your offering directly to the industry via advertising, public relations, editorial placements, online marketing, direct contacts, and a targeted campaign in Transport Topics and other major industry media. Thus, all qualified prospective investors will know about your offering.
Securities are sold through North Capital Private Securities, our FINRA-licensed broker-dealer partner.
Our guiding principle is transparency: to provide prospective investors with accurate information, so they can assess the prospects of your company and make a sound investment decision.
There are no up-front fees or other costs. No retainer. We earn our commission only if we’re successful in making a deal for you. Fair enough?
In sum, Main Street Equity is your one-stop solution, providing everything you need to effect a successful transaction that benefits both parties.
Who’s on the Main Street Equity team?
We’ve assembled a remarkably talented group of people. . . .
A visionary startup entrepreneur. The former publisher of Inc. Magazine. The founder of America’s leading crowdfunding broker-dealer. A nationally recognized securities/M&A attorney. And a top T&L industry investment banker.
Here’s a closer look. . . .
John Zahner is a visionary startup entrepreneur, co-founder of venture-backed Individual (IPO); NewsEdge, acquired by Thomson-Reuters; eLogic, acquired by Reed-Elsevier; venture-backed PermissionTV; and London-based encryption-software pioneer Qredo. Earlier he negotiated the sale of his family’s business Fly Fisherman magazine to Ziff-Davis and his own publishing company to Rodale Press.
Ron Lentz is practice leader for T&L at investment bank G2 Capital Advisors. He is former CEO of WLG Logistics, a $220-million freight forwarder, and former global VP of sales and marketing for Ryder Logistics, which he grew over 12 years from $100 million to $2 billion in sales.
Bob LaPointe is a champion for growth companies as former publisher of Inc. Magazine and creator of the Inc. 500; and a pioneer of the content marketing revolution as founder of OnCore Media.
Jim Dowd is founder and managing director of North Capital Private Securities, America’s leading registered broker-dealer focused on distribution of private funds and the securities of private companies through crowdfunding marketplaces. He is former senior managing director and head of the hedge-fund advisory and fund-of-funds businesses at Bear Stearns Asset Management.
Scott Hambley is a graduate of Dartmouth College (The Tuck School of Business) after which he joined IBM, following in the footsteps of both his father and grandfather, who sold the first computers alongside Thomas J. Watson, Jr. Scott led the first enterprise sales team at Individual – inventor of intelligent, software-customized business news feeds distributed over the Internet to knowledge workers in the Fortune 500 — that grew to 50 sales professionals, paving the way for the company’s successful IPO.
Bill Asher is recognized by Best Lawyers in America as one of America’s top corporate securities attorneys, representing both venture investors and private companies through all stages of financing, including public offerings and M&A exits.
Tony Lewis is managing partner of Matterhorn Legal, a group of attorneys formerly with the M&A group of Wilson, Sonsini, Goodrich & Rosati’s office in San Francisco. He and his team share a lofty goal of bringing technology to the legal profession in new ways that reduce costs and increase efficiency for clients on both sides of a transaction.
Get your FREE Capital Needs Assessment.
Fenton May, co-founder and CEO of T&L telematics firm CarrierWeb, says:
“There’s plenty of private-equity money, but no one is willing to write $5-10 million checks for companies of our size. It would have been great if, three years ago, we could have turned to Main Street Equity to seek capital.”
To recap: We’ve designed Main Street Equity as a marketplace specifically for you—the smaller T&L firm in need of capital but with few or no financing opportunities. For the first time, you can raise money to realize your full growth potential by selling a minority stake to a larger player in your own industry. And Main Street Equity does the bulk of the work and offers a simple, time-efficient, one-stop solution.
In the process, you reap the benefits of working with a strategic investor who has enough confidence in your success to put up real money.
In short, it’s a winning situation for everyone.
Register now for our Free Capital Needs Assessment. Please sign up, without obligation, by completing the Form located on this page.
Questions? Send me a message or call my cell number, below. I’ll give your concerns my personal attention and provide any further information you request.
Founder and CEO
Main Street Equity, Inc.
2120 University Ave.
Berkeley, CA 94704