Retailers are often the maligned children of the business world.
Profits aren't high enough to entice venture capital; glamour isn't glamorous
enough for angel investors; and even the SBA can shy away from the bad
times.
But there is a bright spot or two.
VENTURE
CAPITAL rises again. The founder of Staples, the mega office
supply store, is leading the pack. Thomas Stemberg is planning to
bankroll a new generation of specialty retail chains with small
footprints and narrower focuses than the old "category
killers", huge stores like Staples and Orchard Supply. He
believes that most categories are already full, so he is looking to the
niches for market dominance. He's working through Highland
Consumer Fund I, a new $300 million venture fund that is affiliated with
the Lexington, Mass., venture capital firm called Highland Capital
Partners.
ANGELS
go where venture fears to tread. If you're getting your feet wet
in the "smaller footprint" retail arena, look to angel
investor groups. When there is a buyout opportunity sitting and
waiting for them, they will invest. Highland Consumer Fund is just
the buyout opportunity they've been waiting for.
VENTURE
LENDING is also liable to take a nice jump in the retailing
direction. This lets venture capital firms get an inkling of a
company's potential without making a long term commitment.
SMALL
IPO. A "small" initial public offering used to be an
oxymoron. Not any more. The London Stock Exchange has opened
its doors wide. If your retail business is ready to expand
regionally or nationally, or even internationally, take a look.
You may be surprised.
GREEN
BUSINESSES. If your retail outlet will feature organically
grown items, look to alternative financing. It's a hot topic now,
and one that is financing well.
Retail is on the verge of a major
overhaul. Stores are closing in record numbers. That simply
means that when the economy picks up, there will be lots of great
locations for small footprint niche stores.
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