It's Just Not the Family Way

A nationwide survey asked family-owned companies to rate the importance of various sources of financing.

By Bruce G. Posner | 
 

How do family businesses think about financing their growth? How jealously do they guard their equity? A nationwide survey of family companies by Massachusetts Mutual Life Insurance shows that nearly 90% would consider almost anything, including depleting personal savings and selling assets, before selling stock publicly or privately. Some 90% of the 644 respondents had revenues of $25 million or less.

How would you rate the following sources of financing for your family business?

Percentage of respondents

Critical Very important
Cash flow 21% 63%
Bank funds 15 47
Family funds 10 27
Project financing 7 19
Sale of assets 3 17
Private placements 3 11
Public securities 1 7
Joint-venture sources 1 7

Source: MassMutual, Springfield, Mass., September 1993.

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