Most private companies plan to raise capital this year — the great majority of them to fund talent and technology initiatives.
More than 90% of the private companies surveyed by Deloitte expect to raise capital this year to fund growth-driven talent efforts. They’re primarily looking for equity financing and existing investors as their source. And, 81% said they won’t be able to grow without raising new lines of capital.
Earlier this year, HR leaders said technology was their most important investment priority, said Gartner. The reason: That technology can save money in HR administration, which has become more expensive because of pandemic-related issues, remote-work arrangements and contact tracing programs.
About 93% of the executives said their growth initiatives include upgrades to talent-related efforts, while 88% will invest in technology and 87% in productivity. Some 88% are looking to get to equity financing or funds from existing investors (80%). Less than half — 48% each — plan to seek debit financing or bank loans.
Not So Fast…
No matter which tack they’re taking, these businesses face headwinds. Almost 90% say they are having trouble accessing capital. Companies on the low end of the revenue scale are the more-concerned: Those with $100 million to under $200 million in annual revenue are at least twice as likely to expect difficulty for the rest of of this year, compared to those earning $200 million+.
Nearly half, 48%, report their organization’s valuation has declined. At the same time, most of these executives, 91%, said their business is strongly considering being acquired in the next six months.
“The survey results indicate private companies are looking for capital solutions that allow them to manage near-term needs while remaining focused on long-term stability and growth,” said Wolfe Tone, vice chair and U.S. and Global Deloitte Private leader.
Image: iStock
