Corporate Finance Division
Chemical Company Venture Capital
Synergy Capital Markets has developed an expertise in the Specialty Chemicals sector. Over the past 20 years, the chemicals industry has gone through a significant restructuring, which has led to a deep pool of attractive venture capital and private equity candidates for private equity. This restructuring has been driven by the break-up of large integrated chemical and life sciences conglomerates into more focused businesses, as well as the consolidation of fragmented industries to improve costs or better serve a more demanding and globalizing customer base. in our Chemicals sector, we look for Specialty Chemicals companies with strong, defensible technologies, market-leadership (or an ability to achieve market-leadership in a short-time frame), strong customer relationships and the ability to grow through both acquisitions and organic investment. While the chemicals industry has seen moderate growth over the past couple decades, the North American sector is entering a new phase of revenue and profit growth due to the abundance of cheap feedstocks driven by abundant shale gas.
Fostering Growth without Diluting Equity:
For Chemical companies at critical stages of development, debt can serve as a key financing option to foster growth, with minimal dilution of equity ownership. At Synergy Capital Markets, not only do we understand the industries of our portfolio Chemical companies, but we also understand the growth process - and occasionally the growing pains - they undergo.
When venture debt is used appropriately, we believe entrepreneurs gain the following benefits:
Able to raise capital in a way that benefits the team and the business as a result of the greater flexibility offered by venture debt than traditional forms of debt financing
Have more time between equity rounds to build the business and achieve critical milestones, which creates potential for greater valuation
Retain a larger ownership stake in the company prior to an IPO or other liquidity event
Achieving milestones quickly in many cases also means reaching the IPO stage more rapidly