New CohnReznick Survey Indicates Strong
Forecast For Business Growth, Job Creation Among Middle-Market Companies
Heading Into 2015
20% of middle-market companies will likely engage in a liquidity or
capital formation event over the next six months. With nearly 200,000
middle-market businesses in all industry segments and geographies,
according to the National Center for The Middle Market, this could
mean a considerable number of transactions through the end of 2014.
88% of middle-market executives, who would likely invest raised
capital in an increased workforce, would moderately or greatly
increase hiring volume.
Only 35% of middle-market executives reported being somewhat or very
familiar with the various components of the JOBS Act. 50% of larger
companies are somewhat or very familiar with the various components of
the JOBS Act while only 27% of smaller companies reported as being
somewhat or very familiar.
Only 28% of middle-market executives said that they are somewhat or
very comfortable with crowdfunding as a legitimate means of raising
capital. And when it comes to raising capital, only 2% of
middle-market executives will investigate provisions of the JOBS Act,
including crowdfunding, as a potential source of capital.
NEW YORK--(BUSINESS WIRE)--
Executives at middle-market companies across the United States are ready
to pull the trigger on transactions aimed at growing their businesses
and creating jobs, according to new research commissioned by CohnReznick
LLP, a top ten accounting, tax, and advisory firm specializing in
middle-market companies. Moreover, middle-market companies are confident
in their ability to secure the necessary capital to complete a
transaction before the end of 2014.
The survey, conducted in conjunction with the launch of CohnReznick’s
National Liquidity and Capital Formation Advisory Group, reveals an
optimistic outlook on growth, access to capital, and liquidity among
companies across many industries. Indeed, according to the research,
nearly one-fifth of middle-market companies will likely engage in a
liquidity or capital formation event over the next six months,
triggering a significant wave of potential jobs and revenue for banks,
consultants and services providers. Respondents identified likely
sources of capital as traditional banks, investment banks, private
equity firms, venture capital firms, mezzanine lenders, crowdfunding,
“Middle-market businesses are the most important growth engine in the
U.S. economy and a critical component to job creation,” said Dom
Esposito, CohnReznick Partner and leader of CohnReznick’s National
Liquidity and Capital Formation Advisory Group. “When we hear from
executives that they are optimistic about access to capital and
comfortable enough to conduct a significant financial transaction in the
short-term in order to grow their business, I think it bodes well for
middle-market growth and the direction of the U.S. economy.”
However, when pressed about the JOBS Act, which many have credited as a
driving force behind the economic recovery and a robust IPO recovery in
the U.S., only one-third of executives at smaller middle-market
companies claimed to be familiar with the key elements of the
legislation that could benefit their organization.
“The JOBS Act is a remarkable piece of legislation, but unless the
smaller middle-market businesses which it is designed to help are
leveraging the benefits, its effectiveness as an economic stimulus will
remain underutilized,” said Cindy McLoughlin, CohnReznick Partner and
leader of CohnReznick’s National Liquidity and Capital Formation
Advisory Group. “Clearly, the SEC and members of the capital markets
ecosystem must do a better job educating smaller company executives on
the benefits of the JOBS Act, provide definitive guidance on equity
crowdfunding, and formalize the Reg A+ provisions. We believe it is time
for a JOBS Act II – the sooner the better.”
According to the report:
The full study will be distributed later this month and will be
available at www.cohnreznick.com/capitalformation.
CohnReznick will conduct the Middle-Market Pulse: Liquidity and Capital
Formation Survey on a semi-annual basis.
With origins dating back to 1919, CohnReznick LLP is the 10th largest
accounting, tax, and advisory firm in the United States, combining the
resources and technical expertise of a national firm with the hands-on,
entrepreneurial approach that today's dynamic business environment
demands. CohnReznick serves a large number of diverse industries and
offers specialized services for Fortune 1000 companies, owner-managed
firms, international enterprises, government agencies, not-for-profit
organizations, and other key market sectors.
Headquartered in New York, NY, CohnReznick serves its clients with more
than 280 partners, 2,500 employees, and 26 offices. The Firm is a member
of Nexia International, a global network of independent accountancy,
tax, and business advisors. For more information, visit www.cohnreznick.com.
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Bennett Kleinberg or Sabrina Strauss
Source: CohnReznick LLP