Entrepreneurs and business owners in Central Oregon are beginning to talk about Karnopp Petersen’s new Business 20/20 Executive Breakfast Series. The inaugural event, which will be held September 9 at the Tower Theatre, will explore Access to Capital. The panelists have worked with businesses in every stage of life and bring a vast wealth of financial knowledge to the table. Story by Jenny Furniss for CBN
I connected with panel member Art Hiemstra to discuss a few questions about accessing capital, a short preview of subjects to be discussed at the upcoming event. Hiemstra has been providing debt financing to emerging growth companies in the Pacific Northwest since 1991 and he recently joined the Bank of the Cascades in Portland as a senior vice president. Previously, Hiemstra was president of Vencore Capital, an Oregon-based privately financed lender to emerging growth companies in key technology markets.
Q: At the various life stages in a company, what do companies frequently need to know that impairs getting financing?
A: Probably the most important thing for entrepreneurs to do is examine risk and reward and do a realistic assessment of the risk of the venture—then look for capital that aligns with that. A major error I’ve seen is companies who believe banks are a source of start-up capital when in fact the risk profile is more aligned with founder risk or equity risk. Seeking the correct alignment can save a lot of time and effort.
Secondly, it’s important to explore the world of non-bank lenders. This would typically be asset-based lenders, factoring companies or other non-regulated lenders. These companies are more expensive than banks, but are a terrific way to fund growth and fill a gap between equity investors and banks.
Q: Is there a role for the state and other nonprofits to play in helping create more access to capital?
A: There are several roles for both. The Oregon Entrepreneurs Network (OEN) does a terrific job of bringing together companies, service providers and investors.
Longer term, I’d like to see the state continue to create pools of capital to support investment in promising companies. The Oregon Angel Network receives funds from the Oregon Growth Account and I think this is a good model.
The state of Oregon has several loan guaranty programs that are similar in some way to the U.S. Small Business Administration. These programs are focused on providing credit enhancement to banks to encourage them to provide capital when they otherwise wouldn’t. I suspect the program would be even more effective if the credit enhancement were made available to non-regulated lenders, who by their nature are comfortable in the realm of higher risk.
These issues and topics such as new forms of financing will be explored at the inaugural Business 20/20 Executive Breakfast.