Apex Investment Essay

AccessLine’s initial financing came in the form of strategic alliances. In 1989, McCaw Cellular Communication invested in AccessLine, providing a considerable amount of their intial capital. This funding secured the strategic partnership between AccessLine and McCaw Cellular. This launched further alliances between AccessLine and other phone company carriers, in which AccessLine granted them an exclusive franchise in the market for a set fee. The carriers were permitted to market AccessLine’s service under their own company name.

AccessLine also developed partnerships with equipment manufacturers such as Stratus Computer and Motorola, also providing them with a franchise in exchange for funding.

However AccessLine’s growth prompted the need for larger investments. Thus, in 1994, AccessLine diversified their financing to professional equity investors. Providing funding worth $15. 5 million, AccessLine’s CFO Bill Stuart, and Morgan Stanley’s Bill Brady executed the transaction, involving the private placement from five investors. Such a strategy was chosen due to AccessLine’s lack of capital in the initial stages of AccessLine’s establishment.

AccessLine was not lacking in management or technology and thus was not in need of a venture capitalist in its early stages to control the company or provide the company with expertise or administration. Private investors, such as McCaw Cellular Communications, were more appropriate for AccessLine in that they provided the necessary funding without coercing AccessLine to forsake control of the company. McCaw also provided both clientele and investments. AccessLine’s lack of experience from mergers and acquisitions forced them to eventually turn to venture capitalists in 1994, a time when their strategy had changed.

The venture capitalists could help in evaluating a target company through their experience in purchasing and selling businesses. The funds from Apex Investment Partners would serve beneficially for AccessLine because of their vast knowledge and experience in the industry. George Middlemas and Rick Bolander, both of whom had joined Apex in the early 90’s, had had previous experiences working in the telecommunications industry and racked up an extensive list of contacts in the industry. Thus, Apex would eventually prove to be a profitable investment for AccessLine.

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