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The Basics of Getting Investors for Your Behavioral Health Organization – Part 1
The Basics of Getting Investors for Your Behavioral Health Organization
Specialty publication geared toward Behavioral Health Treatment Centers specifically – not relevant for most eating disorder sufferers
My name is McNeill Wester, and I’m one of the partners here at Coker Capital Advisors, which is a healthcare and investment bank.
For those who aren’t familiar with investment banks, let me give you a quick explanation: we neither make investments nor are we, actually, even a bank.
What we really do is provide advice, mostly related to mergers and acquisitions. We provide this advice for business owners, a lot of whom own and operate a business in the behavioral health or healthcare space.
We assist a lot of companies in the behavioral health sector. Those we help are a mix of businesses in the substance abuse treatment area, and we also assist several in the eating disorder treatment area.
The behavioral health industry is a large industry that is continuing to grow rapidly. It is currently a $64 billion industry that is projected to grow at about 3% per year for the next several years.
So, it is large and getting larger. Behavioral health conditions are highly prevalent, and there are far too many people out there who need help that aren’t able to get it.
What we refer to as “the addressable market” is the patient population in need of services. This market is growing as well. Substance use has now reached an epidemic proportion, as declared recently by the White House. It is the leading cause of accidental deaths in the US, eclipsing car accidents.
Essentially, we have more people needing substance use help than ever before and not enough people getting it.
The situation is similar for eating disorders. A very significant number of folks need help, and less than 1 in 10 actually receive it.
Behavioral health is a broad industry, from the patient demographics that are served, to the conditions that are treated, to the different settings where treatment is provided, even down to the source of funding and the different types of payers in the marketplace.
Behavioral Health affects all types of people of various ages, from children to adolescents to senior citizens. There are also all sorts of conditions that are treated and need to be treated. These can all be provided in many different ways and in various settings.
Paying Off Student Loan and ED Treatment Debt
A final important introductory piece of information is the “payer dynamic.” These days, we have so many different people paying the bills for behavioral health treatment, and this is a very hot topic.
Our firm works with companies that operate within almost all of these various buckets and the first question that many folks as us when they are thinking about doing something in the capital markets is simply, “Do I want to consider bringing on an investor?”
That is, actually, a very personal question to the individual owner of the business and the operator for the business.
I won’t go too in-depth because it is so individual and unique to each person and case, but many of our clients who are interested in bringing on investors cite the attractiveness of the liquidity. It is a way to bring in considerable personal wealth as well as an opportunity to grow the business.
A lot of providers have essentially maxed out what they can do as independent operators and believe that if they bring on a financial donor, they will then have the necessary funds to grow the business and be able to reach out and help more people.
The second question that people ask is, “what would or would not make my particular business attractive to the market?”
In answering this question, the first thing worth mentioning is size and scale. There are many different types of investors out there, so, most businesses can find someone who would be interested if they are providing quality care.
However, generally speaking, for something to be broadly appealing in the marketplace, it needs to have enough size and scale to be relevant to a broad market.
For providers who are too small, it is hard to get a whole lot of attention for your business.
Simply put, it has to be worth-their-while.
Source:
Virtual Presentation by McNeill Wester in the Dec. 7, 2017 Eating Disorder Hope Inaugural Online Conference & link to the press release at https://www.prnewswire.com/news-releases/eating-disorder-hope-offers-inaugural-online-conference-300550890.html
About the Presenter: McNeill Wester – Coker Capital Advisers
McNeill Wester is a Managing Director with Coker Capital Advisors. He brings nearly two decades of investment banking and legal experience to the firm. Prior to joining Coker Capital Advisors, McNeill worked in investment banking with a focus on executing mergers and acquisitions for middle market companies at McColl Partners and Fennebresque & Co. where he served as a Managing Director, General Counsel, and Founding Partner. He also practiced law at Moore & Van Allen, where he advised clients on corporate securities matters.
About the Transcript Editor: Margot Rittenhouse is a therapist who is passionate about providing mental health support to all in need and has worked with clients with substance abuse issues, eating disorders, domestic violence victims, and offenders, and severely mentally ill youth.
As a freelance writer for Eating Disorder and Addiction Hope and a mentor with MentorConnect, Margot is a passionate eating disorder advocate, committed to de-stigmatizing these illnesses while showing support for those struggling through mentoring, writing, and volunteering. Margot has a Master’s of Science in Clinical Mental Health Counseling from Johns Hopkins University.
The opinions and views of our guest contributors are shared to provide a broad perspective of eating disorders. These are not necessarily the views of Eating Disorder Hope, but an effort to offer a discussion of various issues by different concerned individuals.
We at Eating Disorder Hope understand that eating disorders result from a combination of environmental and genetic factors. If you or a loved one are suffering from an eating disorder, please know that there is hope for you, and seek immediate professional help.
Published on June 26, 2018.
Reviewed on June 26, 2018 by Jacquelyn Ekern, MS, LPC.
Published on EatingDisorderHope.com
