Strategy Defines the Capital

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More companies need to fight to ensure that business strategy drives their capital structure, and not the other way around with the capital structure defining business strategy.

Businesses and leaders get bogged down, or fail altogether, when prior decisions on debt, equity, and cash end up misaligned with the business’ goals.

The only cure is to understand the short- and long-term impacts of these types of financing/capitalization decisions, from your perspective and those of the capital providers, and to invest in forward looking capabilities that help you proactively get out in front of risks before they become too big to handle. Ask your banker the difference of amending the terms of a loan before a covenant breaks versus after!

Finance to the goal.

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