Growth companies seeking investment capital should turn their attention overseas, according to Joe Huard, a founding principal with investment banking and brokerage firm Shamrock Partners Ltd. in Media, Pennsylvania. "Investors in Europe and Asia are anxious to cash in on American companies," says Huard. There are several reasons for this, some financial, some strategic.
First, Huard says, while in the United States everybody and his brother has a business plan and a deal, it's not the same in many foreign countries. "There simply isn't the same volume of investment opportunities in many foreign countries," he explains.
Not that there's a total dearth of opportunities. The many bourses and stock exchanges around the globe traffic in established multibillion-dollar enterprises that most North Americans have never even heard of. But these are established companies. To find exciting young companies, ones with new technologies or products that can open vast markets virtually overnight, foreign investors have to hunt further afield. "And their hunting frequently brings them to U.S. shores," says Huard.
But there's another, strategic factor that can bring foreign investments rushing in, according to Huard: licensing and joint venture opportunities. "Many foreign investors want the opportunity to capitalize on new technology, products and business concepts in their immediate [vicinity]," he says. "One way for them to do this is to make an investment in a U.S. company, with licensing rights in their territory as part of the deal." Promoting this concept gives fledgling companies an edge when seeking foreign investors.