By Michael Carmichael
November 6, 2008
Michael Semanco, president and COO of Hennessey Capital, is a native Detroiter with a master’s in finance from Walsh College and was named its Distinguished Alumnus of the year in 2006. He serves on the finance committee for Automation Alley and on several nonprofit boards.
Corp!: What is Hennessey Capital and how does it fit in the overall credit market?
Semanco: We’re a commercial finance company that offers asset-based financing solutions to post-revenue, pre-bankable companies. What that means is that we provide financing opportunities to companies that have sales, but don’t meet the criteria for traditional bank financing. We’re doing this much more than we did as little as six to twelve months ago because the criteria for traditional lending have changed.
Corp!: Do you focus on Michigan businesses?
Semanco: We’re Michigan-based, but we finance businesses all across the United States. The majority of our business, though, is Michigan and the Midwest. We’re probably seeing more requests from our Michigan constituents - bankers, CPAs, attorneys - in the past 60-90 days than we have in the first part of the year. These trusted financial advisors, along with their clients, come to us if there is a financial issue - or opportunity - for which we can help fill the void when banks aren’t lending money. Often the issue is less about the underlying cost of pursuing an opportunity than it is of just plain availability of funds.
Another thing is that we’re looking at a lot of partnership opportunities that are being created within the current turmoil. For example, two companies that have niche products or services where independently the mass isn’t there, but together they can handle that product delivery or service from start to finish. So I think you’ll see more partnerships just because of economies of scale.
Corp!: Technology plays an important role in Hennessey’s business model - but do you also end up taking on the role of the “small town banker”?
Semanco: We view technology as a way for our clients to do business with us more easily, but it’s more behind the scenes. The real value we offer is being able to sit down with the business owner and be a sounding board to them. We talk about where they are now, where they want to go and then provide the financial advice that will help them get there. I’d say maybe 20 to 30 percent of our meetings are those where we don’t provide anything except direction. The biggest challenge for many of our clients is being prepared - whether it’s looking for money or developing a business plan or looking for a partner - it’s knowing what is expected.
When a very young company comes to us - they have gone beyond the prototype stage but don’t yet have a sales history — we often don’t provide financing, but try to point them to marketing experts, sales reps, a business coach. Our goal in that case is to be a counselor rather than a cash provider. It becomes our job to try to tell them what they don’t know and help them get the answers they need.
Corp!: You support a lot of community and charitable endeavors. How do you find the time? What intrigues you about that side of your life?
Semanco: Because we’re Michigan-based we live here, we plan to stay here, so it’s up to us as professional business advisors - all of our team members - to give back to our communities. And it’s a two-way street because I’ve learned a lot from the nonprofits I work with that I can apply to my own business.
Corp!: What would you say is your worst business decision?
Semanco: It’s not so much a decision as a mindset. I tend not to delegate. I’m getting better at it, but I’m still not there yet.
Corp!: Your best decision?
Semanco: It’s surrounding myself with people who have different skill sets than I have. They tend to offset my eternal optimism with a more realistic view - and that keeps us strong as a business, which is ultimately good for our clients.
Corp!: What advice would you give to the incoming administration in Washington - regardless of who heads it?
Semanco: Put aside all of the things that go with politics and truly realize that we have a global crisis. We’re experiencing something few folks have experienced - including our incoming leadership - so how do we really handle what our people need? No matter how long they’re going to be in office, everybody’s going to remember the next four years. At the end of the day, figure out how to do the right thing for the right reasons.