Results Capital Advisory Case Study 1

Capital Development Case Study

Raising Capital to Support Company Diversification, Grow Revenues & Build Shareholder Value

By Michael Wilk, Managing Partner

Situation – A $5M Information Technology staffing company with stagnant revenues sought opportunities to grow the business and build shareholder value. They were considering expanding their business model to include solutions-based services, but needed capital to do so. Additional challenges included a lack of managerial infrastructure, the perception as a commodity-oriented business versus a potential strategic partner, and the need for a formal process for hiring and on-boarding new talent.

Solution – Penn Valley Group led this client through a series of clearly defined steps to address and explore the internal and external factors of their situation:

  • Evaluated the solutions-based market opportunity to determine legitimacy and opportunity for success
  • Quantified capital necessary to support and fund the 18-24 month transformation
  • Raised $1.25M in capital and restructured existing banking relationship to support funding
  • Assisted with identifying human resource requirements and defining the skills sets and profiles for both sales team and technical staff new hires
  • Helped to recruit and on-board new employees
  • Actively participated in the creation and development of a senior management team, including weekly team meetings
  • Clarified and improved the financial reporting and analysis process, and strengthened Board governance relations

Results – By establishing a clearly defined process which included interim milestones, PVG helped this client achieve their goals of growing the business and increasing shareholder value in arguably the most challenging of economic conditions. In addition to successfully building out both sales and delivery teams, this client doubled their revenues in a period of 36 months. By diversifying the revenue stream from 95/5 staffing to 65/35 solutions-based, they also dramatically expanded their client base. Perhaps most importantly, the company is well positioned for the next wave of growth and strategic partnering opportunities.

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