“Bootstrapped” Entrepreneurs Upbeat About Business Growth, Hiring Despite Economic Uncertainty

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Survey from Mainsail Partners Finds Less Optimism than Last Year, but Plans to Invest and Grow Remain Intact

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A recent survey conducted by Mainsail Partners, a leading growth equity firm, found senior executives of “bootstrapped” companies generally optimistic about their firms’ growth potential in 2013—and fairly upbeat about U.S. economic growth more broadly—despite continuing economic uncertainty in Washington.

Though executives were somewhat less optimistic than last year, 65% of those surveyed said they anticipate higher growth for their companies this year compared with 2012. The figure was 87% when Mainsail conducted the survey a year ago.

Nearly 42% of respondents believe the U.S. economy will perform better overall in 2013, compared with 2012, while 26% said it will perform worse. Thirty-two percent said it will perform about the same. In terms of hiring, nearly 54% of respondents said they expected to hire more people this year than last year. Just under 13% said they expect to add fewer employees.

The survey was conducted in mid-November, right after the recent presidential election but before the recent Congressional action to resolve the fiscal-cliff crisis. Mainsail surveyed nearly 500 executives of small- to medium-sized companies that have not taken previous capital from venture-capital firms, private-equity firms or other institutional investors.

“We think bootstrapped companies are an especially insightful barometer on economic trends, since their sharp focus on profitability makes them more sensitive to economic headwinds and changes in the business environment,” said Gavin Turner, a Mainsail co-founder and managing partner. “So we’re heartened by the optimism expressed by our respondents—although we believe the results also reflect some concern about broader macro-economic volatility."

In other key findings from the survey, the respondents:

  •     View issues such as finding the right people to hire as bigger challenges for their businesses in 2013 than macroeconomic trends or increased regulation. Just over 45% cited hiring qualified employees as a challenge, compared with nearly 41% who said “lack of capital” and about 26% who cited increased expenses related to owning a business;
  •     Generally don't believe the recent presidential election will affect their plans to raise capital for their businesses or invest in their companies--though more of the executives viewed the election results overall as negative for their business outlook (38%) than positive (20%); and
  •     Plan to invest most heavily in product development, sales and marketing/PR in 2013.

For more details on the survey and results, go to http://www.mainsailpartners.com.

Mainsail Partners is a leading private equity firm focused on investments in growing, profitable and “bootstrapped” companies. Mainsail has raised over $350 million in committed capital from leading institutions, endowments, executives and entrepreneurs. The firm’s hands-on approach and extensive company-building experience positions Mainsail as a uniquely valuable partner for founders and management teams of bootstrapped companies. For more information, please visit http://www.mainsailpartners.com.

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Rebecca Buckman
The Buckman Group / For Mainsail Partners
650-703-0364
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