Nothing focuses one’s mind and energy greater than a true sense of purpose. Great companies have one thing in common – they have a “why?”
At Headwaters, we believe that the middle market is not “underserved” as so many in our industry somewhat mindlessly assert, but rather that is poorly served. We are not one to speak ill of others, so this declaration is not meant to be critical, but rather a strategic assessment of business models in our market. We believe that small boutiques are the dinosaur of the industry and the larger firms are both subject to conflicts of interest and are simply not set up to serve the preparatory and execution needs of our client base. They are excellent in their own market space, where larger companies access liquid end markets, but not for what we mostly do.
The small “boutique” model of investment banking is the equivalent having a yard sale in a world where eBay exists. “Senior attention” is not a differentiator, but rather a basic service requirement that must be coupled with an information gathering machine and powerful distribution capabilities. We operate in a fragmented and global market for capital and acquirers. Gathering and leveraging such information for the benefit of our clients is what we do.
Large investment banks with trading complexes are good for certain clients, namely larger companies seeking public capital. These firms have high fixed costs and must drive volume to their trading desks. They are conflicted in the sense that their priority is to curry favor with frequent issuers and please their institutional investor customers attractively priced deals. We have no such agenda.
Back in 2000, Headwaters’ founder had his first experience as a customer of a larger investment bank. He experienced first-hand how non-conforming capital raises are handled and how it felt to be used as a “chip” in their advisor’s relationship with more important customers. That experience left a mark.
Our “why?” To never let a business owner feel this way again. To build a modern enterprise laser-focused on preparing our clients for a successful transaction, then kicking down doors and driving extraordinary results for the business owner trying to access the opaque world of middle market finance.
Partnership is not dead in financial services. It comes to life daily at Headwaters. And it makes coming to work a joy.