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Business Finance - How to Find Financing for an Overseas Venture

September 15, 2011

Alexander Gordin, Managing Director, published this informational article in Business Finance. The introduction and link to the article are below:

Several years ago, after the fall of the Soviet Union, I was contacted by the CEO of a U.S. telecom company seeking to build an advanced wireless communication network across multiple regions of Russia. He contacted Broad Street Capital, where I am the managing director, to help secure financing.

His company had been able to secure valuable government licenses for radio spectrum, but had little else beyond management's experience, a strong history of sales, good technical and sales personnel, and a distribution contract with a leading U.S. telecom supplier. Given the evergreen nature of the project and its fairly long five-year payback, financing by local banks was insufficient and very expensive, thus making it impracticable.

Although this client saw tremendous opportunities in servicing emerging commercial enterprises and local first responders and other municipal users, he was at a loss as to where to start.

After a close examination of the proposed project, my colleagues and I identified certain qualifying elements that made the project suitable for U.S. government financing. Our firm secured an advisory mandate and assisted in applying for a substantial USTDA grant to create a project feasibility study for a multiregional advance telecom system. With the feasibility study complete, we then worked with the client to obtain financing for the first phase of the project through the Overseas Private Investment Corporation (OPIC) -- a U.S. government agency which finances projects that have substantial U.S. involvement. Once the venture received critical seed and first stage funding, the financing options broadened and it went on to grow successfully.

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