Mike Ballard, a homegrown finance whiz and Ballard Consulting Group’s founder, says many Las Vegas businesspeople have good ideas but lack opportunities to secure financing they need to expand their businesses.
The trick, Ballard said, is for companies to structure themselves to attract investors. But that’s not easy for businesses that are struggling to clean up their balance sheets after the Great Recession or decide whether to expand.
“It’s more difficult for a Las Vegas company to raise the money they need,” Ballard said. “There’s no denying that. But the capital-raising environment is so much better today than it was 10 years go.”
During his 25-year career, Ballard has helped secure more than $50 million in financing for more than 30 companies. He has also personally invested in some 15 early stage companies, primarily in Nevada.
“I’ve been in this market since birth. I’m a native,” said Ballard, 53.
During his career, he was chief financial officer and a managing member of Switch Communications, co-founder of telecommunications company 1Velocity and developer of the business plan, and he raised capital and launched Cobalt Data Centers.
Ballard was also chief operating officer of Systems Research &Development, a pioneer in real-time data warehousing. The company was initially funded by the CIA’s venture capital firm, In-Q-Tel, and was sold to IBM Corp. for $70 million in January 2005.
“I’ve been involved in the telecommunications business,” Ballard said. “I saw an opportunity. I became involved in Switch at a time when we had less than five employees. Las Vegas is a great place for data centers.”
Ballard attributed Switch and Cobalt Data Centers’ success to Nevada’s tax environment and inexpensive power and the state’s short driving distance to major California cities.
He also started Vegas Valley Angels in 2003, a local venture capital firm. Ballard said Vegas Valley Angels invested $16 million in 24 companies in 12 years.
“That was something the community needed back then,” Ballard said. “We helped finance early stage companies. But there were always 50 times more companies than money to fund them.”
But Ballard isn’t interested on dwelling on his past successes. Today, he oversees Ballard Consulting Group, which offers businesses management consulting, communications and marketing, and technology and helps to raise financing.
Ballard said his firm works simply to “help to grow businesses.” He pointed to venture capital and tax credits as two ways to help businesses in Southern Nevada get the financing they need.
Ballard cited the New Market Tax Credit is an example of a program that can help businesses get needed financing. He said in the past eight months, his firm has closed deals totaling more than $30 million, including $10.7 million in new market tax credits. Ballard didn’t identify the companies his firm has helped to finance.
The New Market Tax Credit was designed to increase investment in businesses and low-income communities by providing a modest tax incentive to private investors. The $200 million new market tax credit program was created in Nevada in 2013. The state’s program invests $3 million to $5 million in federally defined low-income areas statewide.
“To set aside $200 million has a great effect on local companies,” Ballard said.
The new market tax credit equals 39 percent of the investment paid out, including 5 percent in each of the first three years, then 6 percent in the final four years.
On its website, Ballard Consulting Group said it has helped finance or is working on using the tax credit to finance a Las Vegas-based telecommunications company to acquire facilities, a competitor, and provide working capital.
Others Southern Nevada deals include a health care practice with offices in Las Vegas, North Las Vegas and Henderson, and a manufacturing company in Clark County, which needed to buy land, a building, refinance existing debt and secure capital.
Ballard said the recession had set the state’s economy back, but he is confident Nevada is recovering.
“It just takes time,” Ballard said. “People have to be patient.”
He said the University of Nevada, Las Vegas gets a bad rap, but its alumni are starting and expanding businesses. Ballard also said Las Vegas had done a “wonderful job” getting its medical schools up and running, especially with UNLV and Roseman.
Ballard noted that Utah took off because of pioneering companies that trained workers who went on to start successful businesses. Switch, Systems Research &Development, and Cobalt Data Centers are pioneering companies that have a ripple effect by spinning off other firms in Southern Nevada, he said.
“Too often we are pulling up the flowers to see how the roots are doing,” Ballard said. “There is a lot of talent that is moving to Las Vegas. And there is a lot of talent here. Each of these companies needs a couple of these pioneer companies. Talent spins off.”