1. What is your firm’s unique position in the market?
2. What overall advice would you give CEOs and COOs regarding how to better navigate the current economic environment?
3. Many analysts suggest that this is the time for executives to look within and streamline their current organizations so that they are well positioned when the economy rebounds. What are your thoughts on this?
4. In your opinion, what are some of the best and worst things a CEO could do when under pressure from a weakened economy?
5. What business climate changes and trends are you seeing in your local market?
6. How have the services that you provide changed as a result of the current economic downturn?
7. Any other thoughts you would like to share with us about what you are seeing in your local market?
1. What is your firm's unique position in the market
Richard: Frontier has been focused on investing in technology enabled business services companies for 10 years. We are one of the few private equity firms exclusively focused on this sector. As a result, we have a strong track record of success with high growth companies in areas such as Software as a Service (SaaS), Technology Enabled Outsourcing, Managed IT Services, Information Services, and Healthcare IT. We understand these companies and provide real value helping navigate the opportunities and challenges they face.
Ben: Southern Capitol has captured a unique position in the market as one of the few early stage private equity firms headquartered in the Southeast. Our flexibility and broad understanding as entrepreneurs has enabled us to work with some of the finest startup professionals in the country.
 Return to Top
2. What overall advice would you give CEOs and COOs regarding how to better navigate the current economic environment?
Richard: Of course it is critical you take care of your existing customers. In tough times companies will take a hard look at all of their outside suppliers. You want to make sure your customer service and relationships are strong and your ROI is well communicated. Don’t get surprised by a canceled contract or a non-renewal.
Ben: I would encourage all CEOs and COOs to get your financial house in order to weather the storm short-term while maintaining a long-term vision of what your company should look like when you are able to press the accelerator again.
Return to Top
3. Many analysts suggest that this is the time for executives to look within and streamline their current organizations so that they are well positioned when the economy rebounds. What are your thoughts on this?
Richard: In any downturn it is natural to take a hard look at trimming costs or letting marginal employees go. I do think it is important not to go overboard and harm your ability to benefit from a rebound. My thought is to endure the maximum amount of pain you can stand.
Ben: My last answer reflects this belief. I couldn’t agree more.
Return to Top
4. In your opinion, what are some of the best and worst things a CEO could do when under pressure from a weakened economy?
Richard: If you are in a position, now is a great time to be more aggressive and take advantage of the downturn by acquiring weaker competitors or upgrading the talent on your team. The worst thing you can do is panic and start making snap decisions that could hurt your long-term value.
Ben: I think the worst thing a CEO can do is allow top quality professionals to leave the company due to a lack of confidence in company direction or fear of markets that the company serves. This is a time for leaders to step up, exude confidence and stabilize infrastructure for the future.
Return to Top
5. What business climate changes and trends are you seeing in your local market?
Richard: Our portfolio companies are in what I call the “enterprise space”. They are selling solutions to other corporations. That market has held up fairly well, especially for those who can demonstrate cost savings or strong ROI for their services.
Ben: I see a slow thawing as the business cycle begins to heat up. Until the banks begin to lend again, our local market will likely remain in a slow growth mode. I have seen little change in the number of entrepreneurs seeking funding. Recovery from paralysis is often measured and arbitrary.
Return to Top
6. How have the services that you provide changed as a result of the current economic downturn?
Richard: Frontier’s approach has not changed much. Companies do seem more open to raising minority growth equity because it can help them be opportunistic in the downturn. We are also structuring many of our investments to provide shareholder liquidity which is difficult to obtain in today’s very soft M&A market.
Ben: As a firm, we have to be more discriminate in our due diligence with great focus on the ability of an entrepreneur to operate in flat markets. Otherwise, it is business as usual.
Return to Top
7. Any other thoughts you would like to share with us about what you are seeing in your local market?
Richard: It seems things are getting better each quarter. We see this improvement in the growth of our portfolio companies and in our opportunities to generate returns. Frontier recently announced the sale of two of our investments at very attractive valuations. Good companies and their shareholders will persevere and continue to have a lot of options even during difficult times.
Ben: Many business people are continuing to make decisions out of fear rather than fact. This is not the Great Depression, though it feels like it. We are approaching 10% unemployment, but nowhere near the 24% unemployment rate in 1932. We live in a thriving market that will reap great benefits once the bear is gone.
Return to Top
|
