IVCA Q&A: Virchow Krause & Company Partner William A. Chapman

IVCA Q&A: Virchow Krause & Company Partner William A. Chapman

April 16, 2009

CHICAGO - “ William A. Chapman is a partner and managing director of Virchow Krause Capital LLC and Virchow Krause & Company LLP. He has had a long and diverse career spanning a wide array of capital services. The IVCA recently interviewed Chapman on many issues including the Virchow Krause sponsorship of the upcoming Annual IVCA/NVCA luncheon on May 27, 2009.

Illinois Venture Capital Association: How does the IVCA benefit your organization and the entire membership overall?
William A. Chapman: Our participation in the IVCA is an important way for Virchow Krause to monitor current trends in the private capital markets such as pricing, structure, processes and the needs of the private equity community. This helps us to be a more valuable advisor to our clients.

We also have found the educational programs - “ such as the IVCA Toolkit series - “ to be an excellent source of training for our staff.

IVCA: Why is it important for Virchow Krause to sponsor the IVCA/NVCA luncheon in May 2009?
WC: As a firm, we are committed to the private equity markets as an important segment of our business. We believe that the IVCA offers an invaluable service to the business community by providing a forum for VC and private equity funds to exchange ideas and opinions. It should continue to be encouraged.

We have gained a lot from our participation in the IVCA. We view our sponsorship of the luncheon as a way of giving back.

IVCA: Your organization has a long list of services for your clients. How does this diversity favor Virchow Krause during the current economic climate?
WC: While Virchow Krause is the 17th-largest accounting firm in the country and the largest North American member of Baker Tilly International, which is the 8th-largest international network, we continue to focus on the needs of the middle to lower-middle market.

Having critical mass with a diversified client base has provided us with a stable foundation in this otherwise uncertain market. Our accounting, audit and tax groups are steady. Our consulting practice has proved very nimble by adapting its focus based upon client needs.

IVCA: The U.S. economy just went through a rocky first quarter of 2009. What do you anticipate for the remaining three quarters of 2009 in relationship to your business?
WC: Like most people, we expect the balance of 2009 to be challenging. Virchow Krause Capital provides a variety of services including sell-side and buy-side investment banking, corporate finance and due diligence services. In addition, our valuation business is doing quite well.

Beyond FASB 141 valuations and transactional analysis, we provide valuations for estate planning purposes. With valuations generally down, quite a few of our clients are taking advantage of the situation by shifting assets out of their estates.

Also, because we focus on the middle to lower-middle market, we're presented with opportunities (i.e. in due diligence) that our larger competitors can't always manage efficiently.

IVCA: You are a facilitator for deal structure and negotiations during the acquisition and sales of different types of companies. How has this experience helped you to identify potential properties for private equity clients?
WC: The experience has helped us add value by managing our clients' valuation expectations when raising capital and helping them recognize how life will be different with a new partner.

Our background has provided us insight into how our clients might fare in the new environment as well as the ability to recognize issues quickly, educate our clients and direct them to the source of funding that best meets their immediate and long-term needs.

IVCA: You joined Virchow Krause somewhat recently. What about the organization made it a destination in your career?
WC: My team joined Virchow Krause about 18 months ago. We were attracted to the firm's impressive breadth and depth of skills. We immediately recognized that we were missing opportunities to help our clients take the next step because we didn't have access to the vast resources Virchow Krause had to offer.

It's a very powerful tool when you can tell your client or prospect - œwe have completed several transactions in your industry-  or - œwe do have contacts in Dubai- .

IVCA: What optimism do you see in your markets and industries?
WC: What encourages us is that deals are still getting done. We are beginning to see sellers acclimate to the reality of the current environment. We couldn't say that just a few months ago.

IVCA: One of your organization's philosophies is - œsolutions beyond the basics- . In general terms, can you give an example how that credo is put into practice?
WC: Our due diligence practice, for example, provides traditional accounting, finance and tax due diligence. However, it's our practice to assign at least one industry professional to a deal team to be sure relevant issues are addressed that are not always obvious. Our due diligence is sort of an à la carte service.

In addition to the basics, we include our consulting practice as part of the offering. The practice's services include tax strategy analysis, go-to-market strategy evaluation, quality of customer analysis, human capital utilization, risk management and mitigation strategy evaluation, operational process evaluation, supply chain analysis and IT analysis.

IVCA: Your HERO (Help Enrich Relationships through Outreach) program is the charitable arm of Virchow Krause. How important is it for a business to participate in community outreach? Why?
WC: HERO is an integral part of the culture at Virchow Krause.

Our associates have devoted countless hours of their time and personal resources to support numerous worthy causes throughout Illinois, Wisconsin, Minnesota and Michigan. It's our philosophy that we are not just part of the business community but the entire community.