Midcap companies need sufficient resources to tap into and look ahead. But in a world still deeply shaken by the pandemic, reinventing your company’s financing sources might be challenging. Argos Wityu Managing Partner Louis Godron shares his vision of the future of midcap growth financing with us.
For Louis Godron, who has been with Argos Wityu since 1991, the modern economy features two separate worlds. On one hand, the traditional economy, accounting for 99% of companies and most jobs. On the other hand, the startup community, which is smaller in size, yet more dynamic and perfectly financed.
“These two distinct worlds also obey different rules and pursue specific objectives“, Godron says. Startup companies can rely on Venture Capital or Business Angels to finance themselves. But they will have to follow an exponential growth for a couple of years before they become middle-market companies. “If the company’s growth is too linear, there might be a risk of a funding shortfall,” observes Godron. The traditional economy, on the contrary, is faced with another challenge: a lesser taste for taking bold actions.
It is all about seizing opportunities in difficult times
In difficult times, the first thing entrepreneurs have in mind is to control costs. This leads to inhibition which in turn slows down the growth of companies.
Argos Wityu Managing Partner
That common-place response might be triggered by many reasons, such as fear of going the wrong way for family businesses, or a tiny room for maneuver when group subsidiaries are required to secure results… All of these factors might stifle risk-taking and hinder growth. Getting out of this harmful spiral and regaining a taste for ambition then becomes a company’s top priority.
Fortunately, middle-market companies can seek support from shareholders to achieve it. They will “offer CEOs the opportunity to take on the role of conquerors rather than just managers, and stimulate growth,” says Godron. Following the shock of the pandemic, mid-caps must create the conditions for an active recovery more than ever. “Think about rugby. Breakthroughs are possible” says Godron, who positions himself as a daily partner for the companies he supports.
For Argos Wityu, putting people back at the heart of the company’s activities is necessary
While shareholding was once strictly confined to missions of financial engineering and business plans analysis, “it has changed a lot over the last two decades,” says Godron. Our job now requires us to work alongside management to act as a catalyst for transformation. We are more than simple capital providers.». Argos Wityu carries out its mission with a demanding benevolence, as the human factor is the driving force behind any intervention. “The human factor is central to the transformation of any company, and I believe that involving teams in the success of projects is vital.”
To regain a taste for taking bolder actions, we need to develop a culture of innovation in companies. And every employee can contribute. “Growth requires transformation, and that is a collective process. The human factor is decisive“. Godron finally advocates for employee shareholding, which “gives shape to the involvement of all teams in the company’s success.” In a post-covid era, what if moving forward together was the solution to grow midcaps?