The latest PricewaterhouseCoopers Trendsetter Barometer survey, released today, indicates that nearly one in five (18%) of the country's fastest growing companies have surplus cash to invest.
For the survey, CEOs from 421 product and service companies were interviewed over the last five years. The surveyed companies range in size from $1 million to $50 million in revenue.
Survey results show that companies with cash to spare are utilizing three different investment strategies.
- Some companies are acquiring securities in certain publicly-traded companies. These investments are held at the corporate level and are not part of 401(k) plans. Interestingly, only 44 percent of companies in this Trendsetter group have 401(k) plans for their employees.
- Some companies are making investments in other companies that complement their own business. Slightly more than half (58%) of these investments are made with a financial return as the objective. The rest of the investments are made for strategic reasons.
- Some companies are funding start-ups. These investments are designed as incubation programs, where the start-up is housed in a designated facility, exposed to a strict regimen of services designed to accelerate growth. This strategy is typically chosen as a means of bringing externally-developed technologies, processes, products, or services to the investing company.