Despite an improving economy and broad-based growth, opportunities abound to acquire distressed companies in out-of-favor sectors such as automotive components and textiles, as well as industries that have suffered from the high cost of oil. As prices for well-performing companies spiral skyward due to stiff competition for the most attractive deals, hundreds of private equity firms and hedge funds are putting capital into distressed companies and distressed securities in search of better returns.

When potential buyers look at your company, they view the value of your business through the dual lenses of perceived opportunity and perceived risk. As discussed in the March Viewpoint, understanding the value-creation factors that make up the buyer mindset assists you in building value into your company. In essence, knowing what factors drive the decision making of potential buyers gives you a blueprint of how to build the most valuable company possible.

When two companies operate in the same market space, what makes one company more valuable than another? Why does one company sell for a multiple on revenues while another fetches a multiple on earnings? Most importantly, how can you be sure you are focusing your efforts and resources on the factors that will result in your business being courted by multiple buyers and receiving top dollar?

The Sarbanes-Oxley Act of 2002 (SOX) clearly is having a profound impact on the way corporate America is governed and managed. Developed with good intent "“ to elevate governance standards in the wake of flawed practices at public companies such as Enron, WorldCom, and Tyco "“ SOX has been assailed for going too far. That's been especially true for small public companies and those considering IPOs. The Act's section 404 has been particularly notorious, requiring independent audits, written sign-off on the validity of financial results by top officers, and much more.

There's good news on the corporate venture front. Strategic investment has stabilized after plummeting from the lofty peak it reached in 2000. Now, with earnings under control, many corporations are turning outward, eager to drive growth through strategic investments. So with corporate venture money back on the table and likely to increase over the next few years, the question for emerging technology companies naturally becomes this: Is it time to take a fresh look at adding strategic investment to your financing strategy?