If it is time to raise funds to scale your company, you are in an enviable position. And, you are also facing a challenging process that can easily derail your best intentions. As often as you may read or hear of those who’ve moved their companies successfully through seed or startup phases into scaled growth by their own efforts and drive, the truth is that many company owners and key stakeholders turn to capital-raising consultants to make the process a successful one. In the following, we’ll show you why.
There are multiple elements within an organization that make it complete: operations, management, marketing, financial, and human resources, as well as others. In order to fully explore the need for capital-raising consultants, the understanding of each element must be included. New growth, particularly of a large scale, is exhilarating and carries positives when considered; however, as much as the new product, services, or scaling project may be exciting, the elements of the organization already standing in place must be considered, as well. Funding must cover each of these elements plus the innovative product or service. As such, the need to scale capital for an innovative idea or product is in a direct competitive position to scale the company. The first consideration needs to be how to continue funding the established elements of the organization while building the scaling potential of the new effort.
The discussions surrounding capital raising are almost always positive, as suggestions are considered regarding the ways and mean to do so. This kind of vision-casting is one that can engross an entire organization. In this same vein, however, the team must look at the scope and size of raising capital using an in-house team. The explosive enjoyment of initial discussions often deflates as the consideration of time and capabilities of the executive stakeholders do not meet the needs of the process or conclusion. The realist onboard recognizes the act of engaging capital-raising consultants offers the best chance of succeeding and securing the necessary funding to scale the company.
After acknowledging the need for capital raising consultants, the next primary question is in determining which services are needed from the consultants. Are the consultants under consideration experienced in the same industry sectors as yours? Do they have excellent financial backgrounds and multiple potential investors in a niche of personal contacts? Is the firm under consideration able to offer counsel regarding the integrated processes of obtaining capital, funding all processes (both standing and new), and assigning capital with expertise in recognizing how much each functional element of the organization requires during funding? Such structured questions will lead to viable answers in the determination of which services are needed from the capital raising consultants.
After establishing the scope and sequence of the capital raising consultants and the project at hand, the steps will begin to fall into place under their direction:
- An initial proposal for interested investors is created, discussed, and refined. A complete financial picture of the company is prepared, along with projections for scaling the company.
- A completed business plan, including the plans to scale the company, must be prepared. This includes the history of the company, executive summary, mission and goals, current financials, and the total amount forecast.
- Due diligence is conducted via research, document preparation, file searches, and other means of satisfactorily determining whether the proposal, including the business plan, is valid for consideration. All documents, including financial, legal, intellectual property, licensing agreements, customer lists, contracts, and any other documents are included.
- At this point, the capital raising consultants will make final judgements regarding funding requests, potential capital structures, and make a determination of the balance of debt and equity that is correct for the company. The final offer will make an appeal to potential investors based on the actual valuation and the forecast for future earnings. In addition to considering structures, the consultants will help build a set of marketing materials, including a pitch deck, press package, term sheets, and other documentation.
- When the presentation by your company is finally made, the capital raising consultants stand by. The executives of your company will have been prepared for difficult questions and appropriate answers. Every component of the presentation has been prepared by the capital-raising consultants and the results of these efforts will be tangible in the amount of funding that follows.
Raising capital is no easy feat; it requires due diligence, concentration, and an experienced team of consultants. The end results indicate every effort on the part of the team was well worth the decision to use capital-raising consultants.