Weekly Insights from Sol Berkoff
Principal at Charleston Capital, Inc.
At Charleston Capital, we are frequently asked why a small businesses would use high APR, short-term financing.
Often, they need capital to grow.
For a small business, raising equity is rarely a viable option. Small business owners usually do not have the time or the resources to find new partners.
And -- as good as the modern world is at distributing goods geographically, it is horrible at distributing capital geographically.
Sources: Bureau of Economics and PricewaterhouseCoopers
Recently, when 18Q3 GDP data by state was released by the Bureau of Economic Analysis, we noted that much of our country’s economic growth is occurring in states west of the Mississippi. That commentary was titled: “How to Get Long Utah”.
Above, we reproduce that graph along with data from PwC’s recent report on venture capital fundraising. As you can see in the graph on the top, economic growth is spread throughout the country with some outperformance in the west.
But, as you can see in the graph on the bottom, most venture capital goes to California. Some goes to New York. A little goes to Texas and Massachusetts.
We at CCI want to use modern technology to efficiently distribute capital. We want to finance the goldrush near you.