Posted at 6:00 AM
Created on November 5, 2015
Since the first Minority Finance Forum (MFF) a year ago, MBDA Business Centers have been building the only pipeline of its kind, mid-market minority-owned businesses looking for growth financing. After a year of monthly calls where Business Centers discussed challenges and opportunities related to access to capital, the second annual MFF at the Chicago Association for Corporate Growth (ACG) 2015 Midwest Capital Connections was held October 19, 2015. MFF featured panel discussions and extensive networking at the Untitled Supper Club in Chicago, Illinois, with the connection event the next day at Navy Pier presenting over 200 investment bankers, private equity, and other capital sources looking to make deals with businesses and amongst themselves.
This year, the MFF drew over 50 attendees including more than 25 minority-owned middle market companies earning more than $10 million in revenues. Minority Business Enterprises (MBEs) in attendance not only benefited from networking with capital sources, they also had a chance to talk to other MBEs. Bede Ramcharan, president and CEO of Indatatech, stated, “I found Minority Finance Forum to be an amazing event. I created new relationships which I feel over time will yield new business opportunities. I highly recommend this event for the high performing company that is growing or has reached the mid-market level. Well done MBDA!”
The program began with a welcome from George Mui, Market Access Team Lead-U.S. Department of Commerce-MBDA and Senior Advisor to the White House Initiative on Asian Americans & Pacific Islanders. Joshua Gutstein, Senior Financial Consultant at the Chicago MBDA Business Center, also welcomed the attendees on behalf of all MBDA Business Centers. The Chicago Center was joined by representatives from MBDA Centers in St. Louis, Cleveland, Minnesota, and Dallas.
The first panel explored the challenges and rewards of investing in MBEs. Mark Wilson, CEO of eVerifile, spoke first-hand about obtaining Minority Control Certification by the National Minority Supplier Development Council (NMSDC) and was joined by private equity investors who shared investment strategy when taking a non-controlling stake in an MBE. Under the Minority Control Certification by NMSDC, at least 30% of the equity of the business is held by minority owners, but the minority owners maintain operational control. While a challenge to obtain, the special certification allows for growing MBEs to maintain the benefits of certification while attracting needed institutional investors, many of whom are seeking more than 50% ownership in exchange for investment.
The second panel addressed due diligence issues to help attendees better prepare in seeking investment. Issues such as quality of earnings, board makeup, and valuation are investigated by capital sources. The panelists encouraged attendees to take a hard look at their customers, where revenues were coming from, to ensure a diverse and strong base of earnings. When thinking of valuation, MBEs should take the time now to get good accounting help in order to maintain reliable and accessible numbers.
Sagar Patel, Co-Founder & COO of SekureTrak Inc., reflected on the event stating, “The program was excellent and I found it very valuable. There were some great speakers and I had the opportunity to meet a lot of future investors / partners for our solution. Our team has already connected with a handful of them and we’re working to find tangible partnership opportunities.”
Han Bonner, Executive Director of the Chicago MBDA Business Center, will continue to lead the MBDA Business Centers in building on the success of the MFF including the incorporation of quarterly MBE pitch seminars and trainings to expand the growing pipeline of “investment ready” MBEs. To learn more please contact the Chicago MBDA Business Center.
Photos from the event