Some owners of midsized businesses – those in the $1 million-to-$10-milion range that are a few years beyond the startup phase, but not quite mature – said they have had difficulty securing capital and taking their business to the next level in Rhode Island – although bankers don’t necessarily agree.
Creating more access to capital and to training opportunities for those midsized businesses would help grow the state’s economy, said Martin King, CEO of Gurnet Consulting, a 5-year-old East Providence business that assists companies in developing and executing technology strategies
King knows all too well the struggles of the in-between phase – he’s been there, done that.
“We’re beyond that now, but it was difficult about the third year. It’s that sort of ‘tween’ phase,” he said. “At that point, you’re starting to be successful, but you haven’t quite figured it all out, so there could be more risk,” said King, who launched the company on his own five years ago and now has 47 employees.
“Your company is 3 years old and successful and you’re hiring. Then there’s that convergence,” said King. “You’ve grown the company to be big enough to be hit with taxes, big enough to start worrying about regulations and at the same time, I may need a little help with access to capital. When a company is at that level of risk, you may not be able to get the funding.”
As technical consultants, a substantial part of the company’s money has to be invested in keeping employees ahead of the curve.
“We’re a consulting firm, so the biggest thing for us is that we have to have access to capital to create intellectual capital,” said King. “Knowledge is our currency.”
Efforts to get state workforce development grants for training were unsuccessful in the company’s second or third year, King said.
So, unable to hire employees with potential and train them, he had to buy the talent.
“We hired people who were up to the level we needed them to be and who had the experience we needed,” said King. “Once we had that intellectual capital in-house, we started creating our way of delivering our services.”
Paying those high-level employees was done “the old-school way,” said King.