JEC COMPOSITES MAGAZINE - Issue #135 - July/August 2020 - 16

BUSlNESS finance

Finding funding
With rapid growth and the constant delivery of innovative new technologies remaining key characteristics of the advanced composites
market, it is no surprise that enterprises within the sector often need
to raise additional capital.
Peter George,
Senior Consultant
Future Materials Group

T

urning new ideas into
market-ready products,
and positioning them
successfully in the composites
value chain, can be an expensive
exercise but R&D and product
development are not the only
reasons a composites manufacturer might look to raise funds.
Expansion into new global
markets, unlocking capacity
constraints with production
capital expenditure, building
the business infrastructure for

The process of raising additional capital

16

future growth or simply managing the operating cashflow
through a start-up's initial years
of business all see manufacturing companies searching for the
most efficient forms of funding.
Business relationships
But if growth is fast, and when
you are working at capacity
sooner than planned, corporate
finance is often considered only
when there is a relatively shortterm need. And that can be too
late to get the most fitting funding, the most suitable finance

partners, and the business relationships that pay dividends in
the long term. Be ahead of the
curve. An investor wants to see
evidence of strategic planning,
for capital efficiency and for
future growth, not rushed fund
raising.
When making the strategic decision to seek external funding,
ensure that all shareholders
are completely on board,
preventing any issues later on.
With the decision made, an
organization must identify the
types of lenders that will offer
the best fit with their business.
At this point, it can be extremely useful to engage the services
of an experienced advisory
- specialists that offer a deep
market understanding and the
ability to establish effective
communications between the
financial world and an advanced
composites manufacturer.
Advanced composites
market
In this regard, the advanced
composites market, with its
massive diversity in end-use
applications and fragmented
value chain spread across so
many markets, demands more
investor attention than many
other fields. This is not to say
that composites and their

	 jec composites magazine / N°135 July - August 2020

complexity can turn investors
away, just that what industry
insiders see as everyday technology and terminology needs
to be explained. Offering a clear
and concise summary of the
technology and the accessible
market not only demonstrates
that a potential investor's fund
would be in safe hands but
can also expand the available
investor pool with more fund
holders happy to engage.
Different sources of funds
such as non-repayable grants,
loans with varying repayment
periods and share equity with
profit-related dividends are provided by lenders with differing
approaches and unique needs
to satisfy their risk assessments
and lending requirements.
Correctly describing a manufacturer's technical uniqueness
is key, as is the overall view of
its market position, customer
demand and market share
versus competitors. It is vital to
present a potential lender with a
reassuringly clear picture of this
advanced materials landscape,
supply chain and competing
players to enable finance providers to be decisive about the
risks and benefits involved.
Private equity (PE)
One source of funding that
JEC COMPOSITES MAGAZINE - Issue #135 - July/August 2020

Table of Contents for the Digital Edition of JEC COMPOSITES MAGAZINE - Issue #135 - July/August 2020
