Lack of Access to Capital Hampers Transformative Business Growth

Third Way Capital Markets Initiative pic

Third Way Capital Markets Initiative
Image: thirdway.org

Bill Reeves is an active member of the Hawaii community who focuses on educational programs in the islands and serves on the Kamehameha School’s Investment Advisory Committee. Bill Reeves also has board responsibilities with the East West Center in Honolulu, Hawaii, and with the Third Way Capital Markets Initiative.

With a focus on sensible policies that span partisan political affiliations, the Third Way Capital Markets Initiative conducts in-depth research on everything from economics to health care. A recent article released by Third Way focused on a study that found that new U.S. businesses need improved access to capital to expand.

There are two primary business types, transformational and traditional, with the latter focused on well-defined strategic models in traditional sectors such as hospitality. While a majority fail, transformational companies are those that seek to innovate and disrupt their given sectors, often in ways that also improve people’s lives. Examples of such companies started during the past decade range from Dropbox to Solar City.

Unfortunately, the ranks of these types of businesses have thinned over the past few years. This has to do with a drying up of traditional consumer lending resources that the youngest startups rely on to gain a track record and attract further investment.

Unable to access the desired private capital markets, they must often rely solely on the equity of partners and family members, as well elusive angel investors. For a majority of the startups surveyed, these funds are not enough, and potentially game-changing products, services, and technologies get left in the pipeline.

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