Last week, ACG members were treated to an exciting and highly compelling panel discussion featuring three very distinguished CEO’s who discussed their views of the 2015 global economy from a growth perspective, as well as some of their experiences while securing financing.
Moderated by EverFi Vice Chairman Gene Reichers, the panel featured John Becker, Chairman of Kemp Technologies, Jack Huffard, President and COO of Tenable Network Security, and Nick Lantuh, Board Director at PhishMe and former Founder and President of NetWitness. Goldman Sachs’ Alec Phillips was also a featured guest, giving audience members some insightful forecasts for 2015.
Mr. Phillips began with a basic overview of the US Economic Research Group’s forecast, claiming that there was “slightly above-trend GDP growth for 2015 and possibly 2016 and 2017, which essentially means about three percent growth each year for the next few years.”
These numbers are certainly notable “given some of the jitters in markets over the last few months, and again recently toward the end of the year and the beginning of 2015.” Mr. Phillips believes that concerns over oil prices and global are to blame.
“We still think we are basically on track for above-trend growth – not gangbusters – but solid growth in 2015.”
But it appears that there’s no single consensus yet on short-term rates and inflation, although it does seem positive at the moment. “We see the labor market strengthening and we see slack coming out of the system, so we think at least right now inflation is very much in check.”
Consumption is expected to grow by almost four percent year-over-year, which is certainly better than last year. On the other hand, business investments are predicted to fall, but “that’s in part due to the fact that there’s not as much need for it as there was a year ago.”
Housing is the other big question mark. Mr. Phillips expressed some disappointment that the housing sector didn’t see a large boost last year, but expects some changes as millennials begin to purchase their own homes.
“You’re eventually going to start to see younger cohorts who have bee out of the housing market move out of their parents’ homes and get a place of their own.” Mr. Phillips continued, “It hasn’t really happened to the extent that we would have expected, but we see little reason where there’s enough of a shift where millennials do not want to own homes. When the decision comes around, we’ll see the market pick up.”
When asked about choosing the right financing strategy, here is what our esteemed panelists had to say to ACG audience members:
“Every situation is different, every company is different” said John Becker. “I think in the end you need capital to do a variety of different things. At some point in your life you’re going to come to the decision where you’re going to take capital, and sometimes it’s easier than others.”
But Mr. Becker believes that your company needs to be in a certain position before going for additional funds. “If you have a lot of momentum, it’s easier to raise money than if you’re just a concept.”
But bringing on an investor has a way of completely changing your mindset, which Mr. Becker is sure to point out: “When you bring on an investor, there’s a different mentality. They’re going to expect a return over a period of time and it does alter your thinking.”
Jack Huffard shared “two truths” that he learned after being “bootstrapped until 2012, so we had ten years of basically doing it ourselves.”
“Firstly, cash is king; the earlier you take cash, the more control you give up of your dream or vision. Second is to get as far from zero as you can before taking on financing. Breathe it out, and get some customers first.”