Farmers like to think that their business is fairly recession-proof, that people will eat even while cutting back on other spending.
A banker speaking this week in Modesto had a chart to support this. It showed how the overall stock market, as measured by the S&P 500, stumbled badly in 2008 and stayed down for most of the next half-decade. Meanwhile, a composite of 109 food companies recovered from an initial loss and nearly doubled investor returns in recent years.
The Central Valley Fund ("CVF") was established to provide private capital for small to mid-sized businesses. With a broad focus across the western United States, and target area in California's Central Valley, CVF's capital is used to finance later stage growth and expansion, strategic acquisitions, ownership transitions, and recapitalizations. CVF provides subordinated debt or preferred equity, the layer of a company’s capital structure between senior debt and common equity, often referred to as mezzanine capital.
For companies with a track record of profitability that cannot obtain desired levels of bank financing, raising mezzanine capital is frequently a superior alternative to raising additional common equity. Mezzanine capital is attractive to business owners because it is typically less dilutive than common equity, frequently enabling existing owners to maintain significant ownership. CVF mezzanine investments are specifically structured to accommodate the specific needs of the business. The Fund provides all portfolio companies with local personal attention—a rarity in the consolidating marketplace. We focus on growing firms across the western U.S. with at least $1 million in cash flow. Our target investment is between $2 million - $10 million. The Central Valley Fund's principals have extensive private equity investing experience and have also built and managed successful businesses.
In addition to our private equity and business knowledge, CVF has extensive experience in the Hispanic markets in both the United States and México. Relationships with Nacional Financiera (México’s economic development bank), ProMéxico (a part of México’s Secretary of the Economy), Fondo de Fondos, and numerous Hispanic-managed businesses provide CVF the needed expertise to navigate the growing Hispanic marketplace. Hispanics are currently the fastest growing demographic in California and the western United States, and comprise more than 40 percent of the population of the Central Valley. As such, CVF is committed to expanding outreach to the Hispanic community and other underserved markets across the western U.S. We understand small business and can assist you in achieving your financing objectives.