David Gilroy, a former venture capitalist with Wakefield Group and a managing director of Hyde Park Capital, has launched a new financial services firm along with partner Paul Schmidt.
Gilroy and Schmidt, who has more than 25 years of experience as a chief financial officer, launched GrowthFinance LLC in March. The firm will be based in Charlotte.
“North Carolina and the region continue to be highly fertile ground for high growth companies,” Gilroy said when asked why launch a new business now.
GrowthFinance offers contractual CFO and financial reporting services as well as contract corporate development support, including raising growth capital and assistance with merger and acquisition opportunities.
The company is targeting start-up firms to those with tens of millions in sales.
“I’m still finishing up a few projects at HPC (including one very large potential transaction), but the main reason was to start my own firm on the basis of a unique idea — meeting the special needs of small, but fast growing firms through the integrated/combined offering of fractional-use CFO and accounting services and strategic advisory around major transactions, especially growth capital raises,” Gilroy told WRAL Local Tech Wire. “Nobody is doing this today.
“Few, if any, firms, either finance/accounting or boutique investment banks, have any significant interest in serving young companies,” he added. “All of the boutique investment banks are aggressively seeking to sell companies worth $50 million and up in this favorable M&A market.”
Gilroy left Wakefield Group in December of 2004 to open a Charlotte office for Florida-based Hyde Park Capital, an investment advisory firm.
“As a secondary issue, I was disappointed that my partners at HPC decided not to go forward in raising a fund to do venture investing,” Gilroy said. “That was the explicit plan when I agreed to come on — and start a Charlotte office. I cannot fault them, however; they are focusing sharply on large middle-market M&A transactions, and there is a lot of money to be made in doing that in this market.”
Gilroy has known Schmidt since 2004 when they began working together on firms in the Wakefield portfolio.
Schmidt is a former managing director of Von Steuben Financial and has served as CFO at four different companies.
“Smart CEOs of growth companies sharply focus their precious resources on developing innovative products, delivering superb services, and signing new customers,” Schmidt said in a statement. “Sales and marketing is Job No. 1 and needs all the time and energy available from senior leadership. On a cost-effective basis, GrowthFinance serves as their contract, part-time CFO — preparing ‘bank ready’ monthly financial reports, completing financial modeling, cleaning up problematic situations, developing detailed budgets and forecasts, implementing controls and new accounting software, preparing/negotiating loan packages, conducting valuations, analyzing performance, and helping with financial due diligence.”
GrowthFinance already has five full- and part-time professional staff as well as 12 clients. The company plans to open an office in Raleigh in the second quarter of this year.