Posted on: July 11th, 2017
It was 50 years ago in early June, when the Beatles released “Sgt. Pepper’s Lonely Hearts Club Band”. This album, regarded as the greatest of all time, is known for its musical innovation, songwriting and cultural impact. It was issued at a time when the Beatles wanted shake up their image and created this fictional world, as a creativity vehicle. Through the guise of the Sergeant Pepper’s characters, they were able to reinvent themselves, and create far reaching, visionary art. The album resounds with brilliant music, expertly crafted across a variety of styles and themes. The songs themselves tell visual, almost cinematic stories. This album launched rock and roll as a transformational medium, and the entire music industry took flight. The Beatles were already incredibly popular and the number #1 act in the world before this album, yet they felt the need to create more space for themselves. As artists they needed to change their persona, to grow in different directions to document the seismic changes they saw in the world around them in the late 60’s. They reinvented themselves to be able to create on a higher level.
This is the dilemma that many businesses find themselves in. They may have grown successfully and they may even be #1 in their field, like the Beatles were. But at some point the world changes around them and they need to transform. They need to create more space for their vision and capital is required to bring the new vision to scale. The new vision may be an acquisition leading to new strawberry fields of product opportunity. It may be a factory expansion or investments in systems that fixes a few holes. Whatever it is, the transformation involves stepping outside of box, perhaps to a land of tangerine trees and marmalade skies. The financing path available may be as different as the new strategic step is creative. Scaling a new vision requires new sources of finance. Many banks are simply not up to the task of funding visionary strategic steps, with reliance on intangible factors like future cash flow and management grit. Intelligent financiers, also known as mezzanine lenders, best support a company’s launch of a new vision. Mezzanine lenders facilitate reinvention through providing alternative lending structures. Their structures, based on projected cash flow, result in larger capital infusions and a more unified approach to scaling. With mezzanine as the funding vehicle, management has them time and space to create on a larger scale. With a little help from their mezzanine friends, companies can indeed reinvent themselves and create a new masterpiece, just like the Beatles did, and influence their market for decades to come.