Critical Mission Consulting Expands Performance Guarantee Insurance Program To Private Equity Investments
Coverage provides investors downside risk on their investments
By: Critical Mission Consulting, Inc.
According to CMC Founder, T.J. Agresti, "Private equity investment activity is down 25% over the comparable period last year. The Covid-19 pandemic is making entrepreneurs reluctant to seek private capital and investors are seeing more revenue risk factors in the performance of their investments. The perceived risks are creating a slowdown in deal flow." But private equity has been accumulating capital for years waiting for this type of market dislocation. Mr. Agresti continued, "Investors are waiting in the wings to scoop up struggling businesses on the cheap or suppress valuations of start-ups to improve their percentage of ownership. The cash is there, businesses needed a tool that eliminated the investment risk and put them in a better bargaining position."
Mr. Agresti and his group have a history of creating innovative capital advisory solutions and risk mitigation structures including the arrangement of multiple previous venture fundings and private equity fundings. CMC's PGI coverage is backed by investment grade, S & P Ratings AA, or better, insurance companies. The coverage is available on investments starting at $5 million and up. The policy typically takes 30 - 90 days to issue.
PGI is a well timed and innovative solution for businesses and lenders facing barriers to raising capital from private investors. Mr. Agresti stressed, in a recent blog about the use of PGI by borrowers, that these are particularly difficult times for business on both the financial and communications fronts. He said, "There's great uncertainty about jobs and the economy, about the federal SBA and PPP loans, and about reopening businesses and the potential for closing them again later in the year." Performance Guarantee Insurance enables both small and large businesses to engage investors and acquire much needed capital to support their business plans. The insurance increases the likelihood of closing a funding deal by creating a synthetic protective put that provides investors downside protection on their investments. Investment funds should be empowered to attract more potential deals and deploy more capital as a result of the lower risk levels. Mr. Agresti added, "This is a great message to send to internal and external stakeholders, as well as investors who want to deploy their capital but are nervous about additional risks in these unprecedented times. It says the business has done its homework, quantified the risks and accessed a tool to make them a financially sound investment."
About Critical Mission Consulting, LLC
Critical Mission Consulting, LLC was founded in 2013 to offer business leaders a multidisciplinary suite of professional services in business management, corporate communications, crisis preparedness and management, multimedia production and marketing, capital advisory, business exit planning and business legal services. The composition of the group is designed to solve almost every problem facing a business with a group of attorneys, former executives, multimedia creators, insurance and risk professionals.
Critical Mission Consulting, LLC