Funding Planning & Execution with your Bank, a Consultant, an Interim Manager or DIY?
| 14-10-2016 | Pieter de Kiewit |
In my work as a treasury recruiter I speak with financial managers on a regular basis about their funding. Both in the funding strategy as in the execution hereof, it can be noticed that entrepreneurs and their CFO’s intensify their search for the proper partner. This is what I hear so far:
Funding has been the primary trade of the bank, they do have wide and broad knowledge. Over the last years they have lost their credibility due to scandals, but also because they did not supply when the need was high. The banks themselves also struggle with increased regulation and are trying to adjust their business model to changing market circumstances. Can the advice of a supplier be fully objective?
The objectivity of consultants depends upon their business model. There is a portion that is on the broker side that is paid upon success, either by the supplier or their client. They will be deal driven and will not only have the interest of the client in focus. At the same time, without them quite often, there will be no deal, no funding. The consultants that are paid a fixed fee or hourly rate can be expected to be more impartial. They often have the knowledge base, but will not take responsibility. Also their rate can be steep.
The third solution is an interim manager who has been responsible for funding in the past. Often his rate is more acceptable and he will better speak the language of the entrepreneur. Also he is an obvious candidate to do much of the operational work. Of course he will not have an organisation to fall back upon and will not accept any liability. I notice interim managers are getting a bigger market share.
Finally a CFO and entrepreneur can do the funding planning and execution themselves. At first glance this may be the cheapest option.
What questions did you ask before funding your company? Who did you chose to accompany you?
Cost, expertise, success, liability, gut feeling….. So many variables, no easy answer. I look forward to your input.
Pieter de Kiewit
Owner Treasurer Search
In 2015 the Dutch writer Joris Luyendijk published his book “Dit kan niet waar zijn” about the workings of financial markets. An interesting read for all treasuryXL followers and by now, quite well-known. In my perception one of his earlier works is even better. “Het zijn net mensen” describes the public opinion about the situation in the Middle East and how we are all influenced by governments, media and our cultural backgrounds. For me this was a true eye-opener.
