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Brother, Can You Spare a Dime? Accessing the Private Markets

The Fed in its latest decision did not move rates, but indicated another hike is probable.  Moreover, these elevated rates would likely be in place for longer than people think.  As a result, the markets did their thing and tanked.

As rates have shot up over the last 12-18 months, the intended results of a soft landing have not come to fruition. If anything, the US economy has remained resilient and strong relative to the rest of the world.  However, these cycles only last so long and there will be a need for refinancing of existing debt or going to market for additional capital.

All that being said, with elevated rates and the prospect of a downturn in the economy, commercial lenders are getting more risk averse.  So, what is a business to do?  Of late, I am seeing more articles about businesses accessing the private capital markets for debt and equity as the key funds source moving forward.

For privately held businesses, what does this look like and how do they go about accessing these capital providers?  Below are a few articles that I think may be of some use:

Over the next few weeks, I will be diving deeper into private funding options for businesses from the startup stage to those that need growth capital to those that need money just to survive.  If economic conditions deteriorate, we may be in a situation where the private markets are the only viable option.  Brother, can you spare a dime? (Lets hope that phrase doesn’t come back)

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

Yes, Twinkies Can Survive a Zombie Apocalypse

Last week, it was announced that Smucker’s would acquire Hostess Brands for $5.6 Billion (yes with a B) dollars.  What’s better than peanut butter, jelly and Twinkies?  All kidding aside, this acquisition shows that the value of a company is not so clear on the surface.  Some of the key reasons why Hostess was attractive to Smucker’s were as follows:

  1. It expands their access to convenience and small grocery retailers (improved distribution)
  2. It provides new and innovative way to sell their existing product line (think bite sized packaged Uncrustables)
  3. It enhances Smucker’s packaged snack food offering, which is a growing and in demand marketplace.

I highlight the reasons above because many business owners tend to get complacent with their product or service offering and may miss a shift in their markets (just look at the history of Hostess).  Companies that have leaders who constantly think of ways to expand into new markets, work on developing new products and/or move quickly to take advantage of growth trends typically succeed over time.  The acquisition of Hostess clearly fits this mindset.

Time will tell (or more importantly the stock price will show) if Smucker’s makes the Hostess acquisition a success.  However, given the Twinkies maker has filed for bankruptcy multiple times since the turn of the century and continues to survive, I would think there is value to this purchase.  More importantly, this acquisition confirms that Twinkies can outlast anything you throw at them, including a zombie apocalypse.

a meme about twinkies surviving the apocalypse

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

How About Some Quiet Listening?

Tomorrow marks the 22nd Anniversary of the tragedy of 9/11.  Everyone who was alive at the time probably remembers each and every moment of that awful day.  At the time, my wife and I lived in NYC and I was working at my office downtown that awful day.  As I watched the second plane hit the South tower from my office window, I can remember my feelings of shock, sadness, fear and ultimately anger as if it were yesterday.  One thing that I can tell you is that in the weeks after, everyone, and I mean everyone, in NYC worked together towards a common goal, which was recovery.

Fast forward to today, and I can say with a high degree of confidence that we as a country have forgotten the spirit of coming together or working towards a solution.  What has gone wrong?  I wish I knew.  However, perhaps I can offer a solution.

Over the last few years, the term “Quiet” has been linked to a variety of terms from “Quiet Quitting” to “Quiet Hiring” and most recently “Quiet Cutting”.  Well, I am going to take some liberty here and come up with a new use.  How about some “Quiet Listening?”

In my mind the solution to the divisiveness that has pervaded society has its roots in people not truly listening to one another.  Everybody wants to get their point across and if you don’t agree with the other person, they are typically dismissed.  That type of mentality and behavior lays the groundwork for things that ultimately lead to tragic events like 9/11.

If we truly want to move forward, I do believe that we need to engage in some “Quiet Listening.”  I will leave you with this quote that I have heard from people a lot smarter than me:

“You have two ears and one mouth, use them in proportion”

I do hope you take some time tomorrow and engage in some Quiet Listening.

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  

The Year of the Strike – HAPPY LABOR DAY!

The unofficial end of Summer is upon us.  Labor Day has been a national holiday since 1894 but has roots in a long history of struggles between employers and employees.  Unless you are out of the work force or haven’t been paying attention, it feels like these issues have not gone away.   2023 can be called the Year of the Strike!

For employers/business owners, there is fine line between managing your costs and continuing to grow your business.  However, the bottom line is that employees are still a company’s most valuable asset (Yes, I recognize AI and Automation are increasingly making this statement less relevant).

Culture, pay and benefits are all things that must be carefully weighed and assessed if you want to succeed in business.  By the way, that is on top of keeping your product/service offering in demand.  So, what are you to do?  Below are some articles that may provide some insights as it relates to employee relations:

I also wanted to correct/clarify two items from last week’s post on Chapter 7 filings for businesses (Thanks to Rob Bovarnick, a legal bankruptcy expert and friend, for letting me know). First, a business filing Chapter 7 does not get a debt discharge because the business closed (i.e., there is nothing to collect from).  Second, since there often is no bankruptcy purpose in a business filing Chapter 7, Courts will sometimes dismiss the case as a bad faith filing.

Happy Labor Day everyone!

Here are a few other things that may be of interest:

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.