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Topic: Family Business Capital
Speaker: Francois de Visscher
Profile of Speaker:

Moderator: Donald Levitt

Participating Locations
  • CAFE (Canadian Association of Family Enterprise) Calgary Chapter
  • Prairie Family Business Association
  • University of Alberta
  • University of Vermont

Pre-read: Financing Transitions: Managing Capital and Liquidity in the Family Business (Family Business Leadership) by Francois M. de Visscher, Craig E. Aronoff and John L. Ward.

Section One: Managing the Patient Capital of the Family Business

Navigating through the liquidity, capital and control transitions in family businesses requires the effective management of the family’s patient capital. This section explores various liquidity and governance tools to manage the patient capital of the family.

  • The "patient capital triangle" of owner control, capital for growth, and shareholder liquidity.
  • Business transitions and family transitions challenge the balance of the triangle.
  • Successful multi-generational families-in-business pursue sustainable growth strategies for the business and have programs to nurture the family's patient capital.

Section One Questions and Answers
  • Innovative approaches to keeping families involved and connected.
  • Developing entrepreneurial skills.
  • Roles in family governance provide opportunities to contribute without working inside the business.

Section Two:Capital and Liquidity Solutions for Family Business

In today’s global capital markets, family businesses have many internal and external capital and liquidity solutions available to them. This section reviews those options and how they relate to the patient capital in the family.

  • Before seeking outside capital: prepare a detailed business plan; have a clear idea regarding short-term and long-term liquidity needs of shareholders; and develop strong family governance structures.
  • A range of specific solutions depending on needs for control, liquidity and valuation: internal solutions, debt solutions, equity solutions, and strategic solutions.
  • Internal solutions: dividends to shareholders; redemption programs; co-sponsored loan program; opportunity fund; internal recapitalization.

Section Two Questions and Answers
  • The use of a sinking fund.
  • The role and risks of business diversification.
  • Terms for buying out shareholders.

Section Three: Families Investing in Families

The post-recession environment has created an opportunity for single family offices to become the patient investor of choice in family companies. Such a unique partnership of capital and values between single family offices and family businesses may very well be the new capital model for business-owning families.
  • "Families investing in Families" goes beyond a capital transaction -- it is a marriage of famlies and values.
  • Single family offices are now more interested in investing in legacy businesses as long-term partners.
  • Single famly offices understand family values, succession, and family liquidity.
  • Single family offices may be more comfortable with providing capital for shareholder liquidity.

Section Three Questions and Answers
  • How to identify single family offices who might be interested in investing in a family business.

Categories: Teleconferences