Growthink as Business Planning Partner
Just the Fees Please
By Reva A published Jul 07, 2008
A few months ago a small emerging land development firm, R & A Development Group, LLC, engaged growthink to do business planning and to prepare and fund a private placement memorandum. The firm is new to land development, but has an interest in developing resorts in rural communities, and they are seeking business planning and equity funding for a pilot spa resort called Creekside in Missouri.
Upon approaching growthink, the principals were assured that their inexperience didn't matter and that growthink had a team of experts who would advise them during the business planning process. However, the principals only spoke with one person during the business planning process. As a result, the business plan added no particular advantage to the business development efforts of the principals to launch a pilot spa resort in rural Missouri.
During the initial conversations questions were rasied about the type of project the spa resort represented and its suitability for eventual equity funding through the investment banking division of growthink. Again, the principals were assured that the project fit well within the firm's funding scope.
After some effort, the business plan and the private placement memorandum were developed. Growthink was paid per agreement for the documents. However, following their completion no effort was made to carry on the capital raise portion of the relationship. Emails were sent, phone calls made, and messages left with no response from growthink. Eventually, a letter was written requesting a refund of the document fees since they were insufficient as instruments for growthink to use for capital raise equity or debt funding. The letter received no acknowledgement or response.
Los Angeles, California