JACK MIXNER STRATEGY

By Jack Mixner

Last month, Wallace Walrod of the Orange County Business Council invited me to a presentation by the senior regional managers of the U. S. Army Corp of Engineers. They were talking about their focus on keeping infrastructure working in Orange County. They talked about the very successful work they did on Prado Dam out near Corona. Making it higher clearly saved us from significant flooding during storms last winter.

Before the presentation, we all went around the room introducing ourselves. I said I felt like a fish out of water because, to me, infrastructure means access to capital, not cement. Without capital, companies don't grow.

It turns out that access to capital in the U.S. is easier than other places like Europe.

Today's New York Times tells about a $9 million investment the Scottish national government made in a local biotech company with the intent of keeping it there. Only two months later, the company moved to New Jersey. While they left R&D in Scotland, they needed more money in order to grow. The US was the only place to get it. I have had other clients who moved from New Zealand and Korea for the same reasons.

Infrastructure is crucial for rapid growth in science and technology companies. It includes people, location - and money. While I don't really like the way companies are coming to the financial markets (the New Jersey company reverse merged with an existing, basically defunct company) because of the strength of the capital markets here, more companies will do the same thing.

Let's hope it's a win for everyone.

Strategic Implication

Capital formation is crucial to company growth. Rapid growth is some companies requires debt financing. In others, venture capital is required. Focus your efforts of securing capital when you don't neet it, not when you will fail without it.

Reference

Pollack, Andrew. U.S. Finance Pulls Biotech Across Seas. New York Time. 12 July 2006. http://www.nytimes.com/2006/07/12/business/worldbusiness/12place.html