Dare to Venture

Just over a year ago, jewelry design business D'Annunzio Group International was chugging along at a steady and predictable pace. But things took a dramatic turn in 2006 when DGI, in partnership with Warner Bros., launched a jewelry collection inspired by Tweety. Sales went through the roof. As the orders poured in, the company found itself facing a shortage of capital and a backlog of unfilled orders. "We were in jeopardy of losing major business," recalls Arthur D'Annunzio, 41, CEO of the $10 million Totowa, New Jersey, company. His banker suggested venture merchant bank financing.

Venture merchant banks help entrepreneurs bridge the capital gap in several ways, including through trade and accounts receivable financing or factoring. But unlike factors, they may also offer purchase order financing. It isn't the cheapest form of financing, with fees for financing and advisory services running as high as $100,000 annually for some firms. "I'm not going to say we don't feel it," says D'Annunzio, whose $19.2 million financing arrangement with venture merchant bank Capstone Business Credit includes factoring and purchase order financing, "but you're able to make a margin of profit on a much larger scale."

D'Annunzio's company was an ideal candidate for a venture merchant bank. It had a strong management team, an established product and exceptional growth potential. The company was also open to Capstone taking a strong advisory role.

http://www.msnbc.msn.com/id/22329621/

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Dare to Venture