Obtaining financing for business startup or expansion is far from easy and the recycling industry is no exception.
In fact, recycling companies face several unique barriers in accessing financing. Like any small business, they encounter difficulties in securing capital; recycling companies, however, also must confront inefficient markets for private equity investment and struggle to teach financiers about their industry.
Even so, the recycling industry is growing, currently adding more than $7 billion annually to the Northeastern economy.
One strategy for exposing new and expanding recycling businesses to an investor audience is a "venture" forum. Otherwise known as investment forums, such gatherings have long been used for high-tech and bio-tech industries, and are familiar to financiers as a way to learn about companies within a specific industry and region. Lately, forums have targeted environmental businesses.
To explore this strategy's potential for recycling businesses, the Northeast Recycling Council (NERC), Brattleboro, Vt., the National Recycling Coalition's Recycling Advisory Council (NRC/RAC), Washington, D.C., and the New York State Office of Recycling Market Development released the Recycling Venture Forum Study last year.
The study was conducted by KirkWorks, a recycling economic development firm which interviewed forum organizers, recycling companies and investors from around the country. The study revealed that recyclers' demands and investor preferences overlap enough to make venture forums successful (see chart).
By participating in the forum, recyclers meet investors interested in the size, stage and type of investments the recycling companies offer. Simultaneously, the attending investors can access several high quality businesses at a single event, while learning more about the targeted industry.
The study's results spurred NERC to host the Southeast Recycling Investment Forum, held in Charleston, S.C., in November 1995. Further, this May, NERC will hold the Northeast Recycling Venture Forum at the World Trade Center, Boston.
The Southeast forum attracted more than 100 participants and featured nine Southeastern recycling businesses; the meeting resulted in several fruitful contacts both during and after the event.
NRC/RAC is currently developing the Guide to Different Investment Forums, Meetings and Networks for Recycling Businesses. Intended to narrow the gap between capital-seekers and available resources, this reference lists the various investment strategies currently used across the country.
For more information on the Northeast Recycling Investment Forum, contact: Mary Ann Remolador, NERC, 139 Main St., Ste. 401, Brattleboro, Vt. 05301. (802) 254-3636. Fax: (802) 254-5870.
To order a copy of the Recycling Venture Forum Study (#S039-9500), call the Council of State Governments' publication department at (800) 800-1910.