Raising capital can be one of the most difficult tasks high growth entrepreneurs have to face. The multitude of sources of capital, types of funding, and the scrutiny and critical analysis funders perform on your business can be energy draining, time consuming, intimidating and even discouraging. However, like most things in life, once the learning curve is gained, corporate finance can be fascinating and provide critical fuel for your continued value creation.
How to raise capital?
There are many ways to raise capital, however, the key to being successful, whether simple bank financing or venture capital investment, is being prepared and understanding your audience.
When you package the securities of your company, you are essentially creating a product (a corporate securities offering with specific features and benefits) for a specific market (a funding source with an appetite for your particuar risk/return relationship).
Your company and its securities will be valued based on the perceived probability of you being successful in meeting your business goals and providing a return on capital specific to the type of funding source.
Therefore, it is absolutely critical to have a growth plan that highlights 1) how uses of new capital legitimately support increased sales, market share and equity; and 2) how all associated risks will be minimized by a well thought-out business strategy and plan.
Because raising capital, or selling financing, essentially mimics any product sale to a customer, it is critical to understand your customers’ needs and desires. The critical understanding is that the investor’s perceived business risk and timing of liquidity (when the investor gets their capital and required return back) often determines the valuation of your company, which determines the structure of the investment and how much of your company you exchange for the financing.
With my significant capital fund raising experience in private and public offerings, I offer sound advice on the most appropriate structure, pricing and legal marketing to get your financing closed, while maximizing shareholder equity. I offer objective advice on a fee-for-service basis – no commissions, no success equity, and no self-interest. This allows me to be completely objective, and focus on the best interests of our clients.
Please contact us for more information.