“Investors are loaded with cash. Boomers are looking to buy. Foreign firms are eager to invest. What does that add up to?” asks this month's Inc. magazine, in its annual feature on business valuation: “A seller's market for your business.” The current economic downturn and credit crunch may be dampening billion-dollar private equity deals. But middle market investment capital—consisting of companies with less than $500 million annual revenues—remains plentiful. Venture capital firms raised more than $34.7 billion in 2007, hedge funds more than $31.5 billion. Those investors are asking how they can put their money to work, Inc. says, and “the answer just might be your company.”
For the fifth year in a row, Inc. has partnered with BVResources to map out the marketplace for private companies. Those in the hottest growth sectors—technology and software, energy, and anything aimed at the aging U.S. population—are in the greatest demand. Construction and other housing-related firms are “cooling off,” although the tightening market could prompt midsize companies to consolidate. But the current seller’s market for businesses will end sometime during the next five to ten years, the article predicts, as an estimated 65% to 75% of small companies hang out a “for sale” sign when their baby-boomer owners retire. To see “How Much is Your Business Worth” today, compiled by Inc. from BVR data (3,838 transactions in 141 industries) click here.
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