Assessing the Market and Eyeing New Opportunities—Day 1 of the ACG Member Summit
Sessions on Day 1 of the Member Summit explored middle-market business sentiment, strategies during the pandemic and emerging opportunities in esports.
For its inaugural ACG Member Summit, the Association for Corporate Growth drew more than 2,000 attendees for a day of live content and networking. Panel discussions addressed the middle-market economic outlook, strategies for business survival and new investment opportunities.
The National Center for the Middle Market Executive Director Tom Stewart spoke during the Summit’s opening session, sponsored by Intralinks. He shared preliminary findings from a recent survey that showed COVID-19 is still a source of major challenges for midsize businesses, but that executives are beginning to find their footing.
The National Center surveyed 1,000 middle-market executives in early June for its “2Q Middle Market Indicator” report, slated for release on July 22.
Respondents reported -3.7% revenue growth over the last 12 months, compared with 7.5% growth reported in the December survey for the year prior. Looking ahead, middle-market leaders expect only modest growth. They forecast 2% revenue growth over the coming 12 months, compared with 4.7% when they were surveyed in December.
Asked about the likely business impact they expect over the next six months, 39% of respondents cited delaying planned investments, while 38% pointed to general disruption of work.
Still, the number of middle-market businesses facing an immediate threat of failure is declining. Of the leaders surveyed, 13% said the pandemic would prove catastrophic for their business over the next three months, compared with 25% of respondents asked the same question in March.
“People are leaving the panic phase and entering into the ‘what are we going to do about it’ phase,” Stewart said.
Businesses React to COVID-19
A panel discussion on Tuesday afternoon, “Industries Remaining Strong During the Pandemic,” looked back at the “panic phase” Stewart referred to, and how businesses were able to weather the crisis.
The panel was sponsored by Global Upside, and included Mike Wirth, director of buyout funds for private equity firm Mason Wells, who credited his firm’s diverse portfolio as a boon during the last few months.
“People are leaving the panic phase and entering into the ‘what are we going to do about it’ phase.”
Tom Stewart
Executive Director
National Center for the Middle Market
Out of the firm’s 13 portfolio companies, about one-third were negatively impacted by COVID-19 containment efforts, while the rest were relatively unscathed. Some, including its health care holdings, saw gains. One of Mason Wells’ companies, a manufacturer of games and puzzles, performed particularly well as families sought diversions while stuck at home.
Mike Ruggieri, president and CEO of medical products manufacturer Comar Inc., said clear priorities and communication helped his company to make decisions quickly, helping to shield it from the pandemic’s negative effects.
“It was a pretty significant strain on the organization,” he says. “But the team came together and we focused on what mattered most—which was our employees, our customers and our business.”
Adam Sheffield, chief revenue officer of Global Upside, said he has seen businesses use the slowdown in M&A as a time to revisit their processes, consolidate the number of vendors they work with, and ensure their recently closed transactions are compliant—particularly those operating in foreign markets.
Tapping into the Growing Field of Esports
The absence of sports has been a surreal aspect of the COVID-19 outbreak, but it’s drawn attention to a related emerging industry: esports.
During another panel session on Tuesday, speakers discussed growth in esports and how investors can get in on the action.
As competitive gaming matures, it has created lucrative revenue streams around esports, including media rights, brand sponsorships, services to athletes and real estate development for venues.
Esports offers a way to reach a young-adult audience, making it an attractive industry for marketers. Most enthusiasts range from 18 to 34 years of age, according to Chris Overholt, CEO of OverActiveMedia, an esports marketing firm—and their fans number in the hundreds of millions globally. This demographic has an aversion to traditional advertising, he said.
“If you’re a chief marketing officer today, you’re certainly looking in on esports and trying to figure out a way to get those cord-cutters and ad-blockers, and how to do that in an authentic way,” he said.
While most investment in esports is still in its early stages and dominated by venture capital firms, that could change in five to 10 years, according to Chris Chaney, managing director of esports investment holdings company EVL Interactive.
Chaney encouraged firms interested in esports to set up dedicated funds that invest in industries related to competitive gaming, like consumer products for merchandising, computer hardware manufacturers and data centers.
Between panel sessions, Summit attendees held one-on-one meetings scheduled through the ACG Access software. Tuesday’s program concluded with open networking and virtual roundtable discussions. The event will continue through Thursday afternoon.
Benjamin Glick is Middle Market Growth’s associate editor.
