Fernando Cabos participates as a lecturer in the Automotive Intrapreneurship Symposium

Last December 1st, Fernando Cabos, partner at Albia Capital Partners, participated in the Automotive Intrapreneurship Symposium, which was organized by the AIC – Automotive Intelligence Center.

Exhibici—nAlbia Capital’s lecture, which covered the  topic of funding intrapreneurship and investment projects, set forth that not many decisions within the life-cycle of a company are as important as the funding of a relevant project, since this funding unquestionably shapes its future development.

Furthermore, the lecture emphasized that company size affects its access to financing, as well as how much it costs. In particular, the following conclusions are obtained from specialized papers by renowned firms:

  • In 2014, 75% of companies with an EBITDA above $1.000.000 struggled to fund their investment projects. Meanwhile, only 28% of companies with an EBITDA of over $10.000.000 encountered obstacles in obtaining funding for their projects.
  • Also in 2014, cost of funding non-equity capital for small companies was 2%-3% higher for large companies, cost of funding mezzanine capital was above 12%, and return required from equity investment was between 5% and 10% higher.
  • Likewise, with regard to M&A activity, valuation multiples for small companies was 40% lower in comparison to its larger sized peers.

Exhibici—nThese issues withdraw competitive edge from smaller companies, not only due to bearing perpetually higher funding costs, but also because of adversities in accessing funding to drive their growth.

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